overview for nebraska investment council · may 2010 –series a jun. 2012 –ipo jun. 2015...

CONFIDENTIAL © NEA 2019

March 14, 2019

Suzanne King and Ed Mathers

Overview for Nebraska

Investment Council

CONFIDENTIAL © NEA 2019 │ 2

GENERAL

This presentation (“presentation”) is for information purposes only and does not constitute investment advice or an offer to sell, or a solicitation of an offer to buy,

any securities of any new enterprise associates (“NEA”) affiliated investment partnership (each, an “NEA partnership”). It is the policy of NEA that no oral or implied

contracts or legal obligations exist in the absence of a final written agreement signed by authorized individuals.

PERFORMANCE INFORMATION

Past performance or projected performance is not indicative of future results. There can be no assurance that investments made by any NEA partnership will be

profitable or will equal the performance of prior investments described in this presentation, and investors could lose money. Please see the fund report cards and

the investment performance – end notes in the appendix of this presentation for the investment performance of each NEA partnership and additional detail

regarding the methodologies used to calculate the investment performance results contained in this presentation and certain limitations and disclaimers with respect

thereto.

CONFIDENTIALITY STATEMENT

The pages found within this presentation, whether or not marked “CONFIDENTIAL,” contain highly confidential information, including trade secret, commercial and

financial information regarding the NEA partnerships and the business, operations and financial condition of their respective portfolio companies (the “portfolio

companies”). The information found within this presentation shall be maintained in strict confidence. Any disclosure of this information could cause competitive

harm to NEA, the NEA partnerships, and their portfolio companies. By receiving the information found within this presentation, each recipient agrees that this

information shall not, without the prior express written consent of the managing general partner at NEA, be reproduced in any manner for, or disclosed to, any other

person, and shall be retained for only so long as is necessary.

DESCRIPTION OF GLOBAL OPERATIONS

NEA is a global investment group comprising, among other entities, a management company, its consulting affiliates, and associated investment vehicles.

CONFIDENTIAL © NEA 2019 │

NEA: Diversified Venture Capital at Scale

3

Data updated as of 12/31/18

40YEARS SINCE

INCEPTION

17FUNDSRAISED

$20B+COMMITTED

CAPITAL

23%NET IRR ON $ INVESTED

NEA 6-16

121EMPLOYEES

14YEARS AVGGP TENURE

~230IPOs

$25B+REALIZEDRETURNS

>385M&A EXITS

60FULL-TIME INVESTORS

4OFFICES

1GLOBAL

PLATFORM


NEA: A Winning Platform Built on Core Strengths

4

SCALEGlobal platform optimized for performance; $20B+ in committed capital over 17 funds and 600+ exits

CONSISTENCY Top tier returns sustained over 40 years and multiple market cycles

DIVERSIFICATIONOne-fund model diversified across stage, sector, and geography, leveraging four decades of technolgoy and healthcare expertise

INSTITUTION Strong governance and management, robust infrastructure and a history of smooth leadership transitions over four decades

TEAM60+ investing professionals and 60+ operations and portfolio services team members drive NEA’s ability to deliver best-in-class returns at scale


$0

$40

$80

$120

$160

$200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

NEA: Positioned to Win in a Growing Market

5

Source: Pitchbook-NVCA Venture Monitor Q4 2018TAM reflects total dollars invested into venture capital and venture growth equity

$197B2018 US Venture Capital TAM

In expanding VC market, NEA is optimally structured to capitalize on value creation opportunities across the spectrum

• Technology and Healthcare expertise well-matched to innovation landscape

• Excellence in early-stage and growth-stage investing

• Investing and company building activities amplified by vast global network

• Track record of building companies at scale

VENTURE CAPITAL $ INVESTED

VENTURE GROWTH $ INVESTED

• VC funding topped $254B worldwide in 2018

• Over $24B was invested in Europe

• Over $83B was invested in Asia, with China leading the region

• In 2018, MENA startups raised over $893M in funding across 366 deals

GLOBAL VC MARKET ACCELERATING


Finance, Insurance,Real Estate

Manufacturing Healthcare Retail Publishing, Broadcast Arts, Entertainment,Food

Transportation

Subject to Tech Innovation Total Industry

$6.1T

$1.7T$1.1T

$1.7T

$6.0T

$3.2T

$1.4T

US Industry Sizes and Technology Penetration2018

VC Market: Technology Innovation Permeating Every Industry

6

Note: Bars represent total size of industry in the US; green portions represent amount of industry currently subject to tech innovation. Source: Bureau of Economic Analysis; data as of Apr-2018, except publishing/broadcast and tech/non-tech proportions as of 11-Oct-2017

Finance, Insurance,Real Estate

Manufacturing Healthcare Retail Publishing, Broadcast Arts, Entertainment,Food

Transportation

Subject to Tech Innovation

Total Industry

$6.1T

$1.7T$1.1T

$1.7T

$6.0T

$3.2T

$1.4T


VC Market: Massive Tech and Healthcare Innovations Creating Opportunities

7

UBIQUITOUS CONNECTIVITYAs the number of devices connected to the internet rapidly expands, myriad data is now available for analysis, optimization, and automation. This trend also greatly expands the landscape for potential security threats.

CHANGING CONSUMER PREFERENCESInternet adoption is still in early stages from a big-picture perspective. As more models take to the web, consumer preferences have shifted to digitally-native models that optimize for the end user.

ARTIFICIAL INTELLIGENCEThe proliferation of data has made automation achievable at scale. Every business can optimize and automate parts of its workflow by leveraging artificial intelligence.

TRADITIONAL VERTICAL DISRUPTIONTechnology is pervasive in the real world and is impacting every aspect of our lives, from healthcare and transportation to education, real estate, and personal finance.

ARTIFICIAL INTELLIGENCE & BIG DATAAI is currently the fastest growing segment of spend inside the U.S. healthcare system and is showing no signs of abating. Coupled with big data, these technologies will fundamentally shift how patients are treated.

PRECISION MEDICINEThe way we think about and treat diseases is fundamentally changing, and the power of gene editing and gene therapy is opening up another type of treatment paradigm – precision medicine.

NEW FRONT DOORSHospitals have been unbundling, and there is a wave of startups using technology-enabled services to deliver care outside of the hospital, often times doing it better and more efficiently.

CONSUMERIZATION OF MEDICINEAs consumers are increasingly shouldering the cost burden of healthcare, they’re looking for more convenient care options with more functionality and more technology.

TEC

HN

OLO

GY

HEA

LTH

CA

RE


VC Market: Macro Trends Make Venture Asset Class Increasingly Attractive

8

Sources: S&P Dow Jones Indices LLC, Board of Governors of the Federal Reserve System (US)

Federal Interest Rates Rising AgainPercent, Monthly, Not Seasonally Adjusted, 1954-2018

Public Markets at an All-Time HighS&P 500 Index

0

500

1000

1500

2000

2500

3000

3500

10

/20

08

10

/20

09

10

/20

10

10

/20

11

10

/20

12

10

/20

13

10

/20

14

10

/20

15

10

/20

16

10

/20

17

10

/20

18 0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

1/1

99

0

1/1

99

2

1/1

99

4

1/1

99

6

1/1

99

8

1/2

00

0

1/2

00

2

1/2

00

4

1/2

00

6

1/2

00

8

1/2

01

0

1/2

01

2

1/2

01

4

1/2

01

6

1/2

01

8


Percentage of Capital Committed by SectorNEA 13 – NEA 16

Capital Committed by Stage/Sector/GeographyNEA 16

NEA is Diversified Under ONE Platform Enabling Dynamic Asset Allocation to Optimize Outcomes for LPs

9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NEA 13 NEA 14 NEA 15, 15OF NEA 16

Enterprise Consumer Energy Biopharma Healthcare Services Medical Devices Other

TEC

HM

ED

0% 100%

Industry

Sector

Stage

Geography USA

VENTURE VGESEED

MED

OTHER

TECH

ENTERPRISE CONSUMER BIOPHARMAHC

SVC/ IT

MED TECH

OTHER

90% 10%

66% 13%21%

30% 24% 26% 8% 9%4%

38%57% 5%

INT’L

Data as of 12/31/18


NEA’s Venture Capital and Venture Growth Equity Expertise Provides Proprietary and Outsized Opportunity for “Conviction” Capital

10

VENTURE CAPITAL

• Own a lot early• Take more calculated risk• Company incubation

AVOID

• Tight follow-on processes• Ensure capital and resources directed

to needle-movers

% OWNED

$ INVESTED

CONVICTION QUADRANT

• Buy up ownership• Invest more capital• Take a few concentrated positions

VENTURE GROWTH EQUITY

• Differentiated strategy• Curated portfolio• Very disciplined

NEA CORE COMPETENCY

NEA CORE COMPETENCY INCREASING FUND FOCUS


Feb. 2013 – Series E May 2015 – Secondary & Series G Mar. 2017 - IPO$3B market-cap

Mar. 2014 – Series F

May 2018Salesforce Acquisition

May 2010 – Series A Jun. 2012 – IPO Jun. 2015 – Distribution

Jun. 2013 – DistributionJun. 2011 – Series B Mar. 2016 – PIPEJan. 2019

GSK Acquisition

11

Note: size of bubble represents $ magnitude of investment / return to NEARefer to investment performance end notes for additional details

Jun. 2014 – Series A Nov. 2015 – Series B

$3.3Bvaluation

Sep. 2016 Walmart Acquisition

$5.1Bvaluation

$6.5Bvaluation

NEA’s Early, Growth, and Conviction Investing Lead to Big Outcomes and Meaningful Impact Across Sectors


People Matter: NEA’s Unique Operating Strategy and Management Make the Difference

12

FUND MANAGEMENT

PORTFOLIO MANAGEMENT

INVESTMENT MANAGEMENT

MENTORSHIP: pair senior and junior investors for superior decision-making

STANDARDS: ensure high bar investment hurdles

DISCERNMENT: tightly control follow-on investments ensuring concentration in best potential outcomes

$ DISTRIBUTIONS: maintain focus on and enhance “liquidity engine”

BALANCED BOARD LOADS: prioritize time to where NEA point person can make biggest impact

REVIEWS: rigorous quarterly “bucketing” and partners interviews ensure intellectual honesty about state of portfolio

CONSTRUCTION: manage targets enabling dynamic asset allocation and concentration of capital in best investments

LP REPORTING AT SCALE: best-in-class; timely, detailed, consistent, and transparent

REAL-TIME, ROBUST DATA: expansive, reliable, and organized datamarts enable data-driven decision-making

TEAM: experienced operations team of industry veterans provides leverage to NEA’s investing staff


Team Bios

14

SUZANNE KINGPARTNER, HEAD OF LP RELATIONS AND FUND

RAISING

24 years at NEA

Prior Experience: NEA Technology Investor, Executive roles at venture-backed startup XcelleNet; Arthur Andersen & Co.

Education: BS University of North Carolina Chapel Hill; Kauffman Fellow; MBA Northwestern University

ED MATHERSPARTNER

Healthcare –Biopharmaceuticals

10 years at NEA

Prior Experience: MedImmune; MedImmune Ventures; Inhale Therapeutic Systems (now Nektar); Glaxo Wellcome (GSK)

Noted NEA Investments: Akouous; Amplyx; Liquidia (NASDAQ: LQDA); Lumena Pharmaceuticals (acq by Shire); Mirum Pharmaceuticals; Motus Therapeutics (acq by Allergan); ObsEva (NASDAQ: OBSV); Ra Pharmaceuticas (NASDAQ: RARX); Reneo Pharmaceuticals; Rhythm Pharmaceuticals (NASDAQ: RYTM); Synlogic (NASDAQ: SYBX); TreviTherapeutics; Ziarco (acq by Novartis)

Education: BS North Carolina State University


INVESTMENT PERFORMANCE – END NOTESThis Presentation contains information (including investment performance) with respect to some but not all NEA Partnership portfolio companies and does not constitute a

comprehensive report on the status and prospects of the NEA Partnerships. The full list of investments for each NEA Partnership may be found in the Schedule of PortfolioInvestments in each NEA Partnership’s most recent quarterly report (available upon request).

The pages from this Presentation that highlight only certain NEA Partnership portfolio companies are generally meant to illustrate certain investment strategies and investmenttheses that have been utilized by NEA and are not necessarily indicative of the actual transactions that would be made by any other NEA Partnership. There can be noassurance that any NEA Partnership’s investments will achieve returns at levels comparable to the investments set forth in such pages.

Unless otherwise indicated, all information contained in this Presentation respecting rates of return or other performance data, whether realized or unrealized, is on a grossreturn basis before giving effect to management fees, carried interest and other expenses which if given effect to would reduce returns in the aggregate.

For purposes of presenting track record information in this Presentation, the following conventions have been used: (i) valuations of private company securities and securitiesthat are otherwise subject to legal or contractual limitations on marketability have been determined by NEA in good faith in accordance with U.S. generally accepted accounting

principles as of the date of determination; (ii) valuations of public company securities that are not subject to legal or contractual limitations on marketability have been basedupon the closing price as of the date of determination, without regard to the size of holdings relative to market trading volume; (iii) valuations of securities distributed by NEAPartnerships have been determined as of the date of distribution based upon the valuation provisions for in-kind distributions in the applicable NEA Partnership’s limited

partnership agreement (which generally provide for such valuation to be determined based on the closing price of such securities on the date of distribution, in the case ofcertain NEA Partnerships, or on an average of closing prices over a certain period of time preceding the distribution, in the case of other NEA Partnerships; (iv) Fund IRR andLP IRR and Fund Multiple and LP Multiple have been calculated using the date of determination as the terminal date and assuming a complete sale of remaining assets as of

such date at a valuation determined in accordance with the preceding principles; (v) Fund IRRs and Fund Multiple have been calculated as of June 20, 2018 (or such other dateas may be specified herein), taking into account management fees and other expenses but without giving effect to a reduction in amounts distributable to the limited partners inrespect of the general partner’s “carried interest”, and Fund IRRs for each NEA Partnership have been calculated based on the quarterly cash flows (including the distribution

value of in-kind distributions) from and to all partners (including the general partner) assuming that all inflows and outflows occurred on the last day of the quarter; (vi) LP IRRsand LP Multiple have been calculated as of September 30, 2018 (or such other date as may be specified herein), taking into account management fees and other expensesand giving effect to a reduction in the amounts distributable to the limited partners in respect of the general partner’s “carried interest”, and LP IRRs for each earlier NEA

Partnership have been calculated based on the quarterly cash flows (including the distribution value of in-kind distributions) from and to all limited partners assuming that allinflows and outflows occurred on the last day of the quarter and (vii) the multiple and IRR performance data contained in this Presentation in respect one or more specificinvestments are presented on a gross return basis (before giving effect to management fees, carried interest or other expenses), and with respect to any such gross IRR

figures, have been calculated based on a monthly cash flow basis (including the distribution value of in-kind distributions) assuming that all inflows and outflows occurred on thelast day of the month.


INVESTMENT PERFORMANCE – END NOTESFor NEA Partnerships formed in or after 2006, the capital commitment of the general partner or its affiliates is not subject to the management fee. This reduction in the

management fee results in a higher Fund-level IRR and Fund-level “multiple” than would have been the case if such capital commitment had been subject to the

management fee.

Performance results in this Presentation give effect to the recycling by the applicable NEA Partnership of certain proceeds from the disposition of investments.

Certain performance data contained in this Presentation is based on or includes the value of unrealized investments. Most of such unrealized investments are in privately-

held companies for which there is no market. The values of such unrealized investments have been determined by NEA in good faith in accordance with the U.S. generally

accepted accounting principles. There can be no assurance that such unrealized values reflect the fair value of such investments or that actual returns or results will not be

materially lower than those stated in this Presentation.

This Presentation contains forward-looking statements that are not historical facts. Forward-looking statements are based on current plans, estimates and projections.

Forward-looking statements speak only as of the date they are made, and NEA undertakes no obligation to update any forward-looking statement in light of new information

or future events. A number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking

statements. In particular, investing in unseasoned companies (whether private or public) carries a great deal of risk. These companies can be adversely affected by the

slightest change in a number of factors, including, but not limited to: weaker-than-anticipated market acceptance of products and services; disruptions in technology

development; an inability to successfully manage expanding operations; an inability to attract and retain key management and technical personnel; competition posed by

established enterprises; changes in accounting rules or government regulation; a rising interest rate environment; general weakness in the applicable industries as well as

the U.S. and global economy; currency fluctuations; and the effects of terrorist activities or other geopolitical events. In addition, valuation of such companies is extremely

difficult. Accordingly, any forward looking statements are speculative in nature and actual results could differ very materially.

Caution should be taken with respect to interpreting the investment performance information and similar information relating to prior financial performance, whether

contained in this Presentation or otherwise. The venture capital industry lacks a comprehensive set of generally accepted rules for calculating and presenting rates

of return, multiples and other elements of financial performance, and NEA is not required by law to follow any particular methodology. Different methodologies and

valuation assumptions may produce materially different results. Direct comparisons of track record and similar information contained in this Presentation or

otherwise with investment performance information in marketing and other materials relating to other funds may be difficult or misleading.


INVESTMENT PERFORMANCE – END NOTESCertain information contained in this Presentation has been obtained from published sources, companies in which NEA Partnerships have invested and from other third

parties. Although such information is believed to be reliable for the purposes used in this Presentation, NEA does not make any representation with respect to, or

assume any responsibility for, the accuracy or completeness of such information.

Investment performance for all NEA investments is available in the data room or upon request.

overview for nebraska investment council · may 2010 –series a jun. 2012 –ipo jun. 2015...

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