Swiss Technology Fund I

Christopher Hes WęgrzeckiE: office@hessbusinessconsulting.infoSkype:hess-chrisM:+48 790-644-717 (24/7)

We are are raising CHF 100+ Mio.

Our mission

To provide a well balanced high-tech fund of mid stage Swiss startups to international

investors, aiming at IRR of 25 - 30%

A golden opportunity for the world to partner with Swiss Technology

• Fund size: CHF 100 Mio., domiciled in Luxembourg

• Focus on Swiss high-tech- Geography: Switzerland and selectively in adjacent European countries (e.g. southern Germany)- High-tech sectors: Robotics, Nanotechnology, Engineering, Medtech, Life Sciences, Energy, ICT- Development / growth stage of ventures

• Fund thesis- Funding gap between family & friends / angels and traditional VCs- Valuation arbitrage / roll-over from Switzerland / Europe to USA- Right team with entrepreneurial track-record

Characteristics

• Switzerland is ranked No.1 of mostinnovative countries worldwide (Cornell,INSEAD)

• ICT industry alone employs 200’000people and exports more than cheeseand chocolate combined

• ICT, instrumentation, Life Sciences,Medtech and IT-enabled manufacturingsome of the top fields of Swiss innovation

Switzerland is a global powerhouse in innovation

• Switzerland has highest density ofNobel prize winners worldwide

• ETH and EPFL are lighthousetechnical universities, ranked 9th and14th worldwide

• 60 higher education institutes – e.g.Universities of Applied Sciences withspecialization in precision mechanics,electronics etc.

• Over 8’000 Swiss patents in 2015make it #1 or #2 (according tostatistics) in per capita and #8 in totalpatents

Swiss universities attract top talent

• Ranked 2nd worldwide in transportinfrastructure investments (OECD)

• 4th highest GDP/cap illustrates value addcharacter of Swiss industry

• Stable democracy since 1848 andneutral country

• Most competitive economy worldwide byWEF in 2014

• Zurich and Geneva top ranked spots tolive continue attracting top talent

• Healthy state finances (<20% ofdebt/GDP, no budget deficits)

Boundary conditions in Switzerland are excellent

• History of top innovation andreinventing themselves

• Ability to attract and keep top scientificand managerial talent

• Small size of country made companiestraditionally seek international marketexposure

• Low corporate taxes, favorable andstable legal environment

• By far highest density of multinationalcompanies per capita

• Many foreign multinationals investingin Swiss R&D (e.g. Google, IBM etc.)

Switzerland has created many world market leaders

Blue Chips

Global leaders

Startups

Swiss High-Tech venture success stories (extract)

Company Description Sector Status Value in CHF

Theoreticalmultiple for STV

Hybris E-commerce software ICT Purchased by SAP >1’000 Mio. 60-100x

Sensirion World's leading manufacturer of humidity sensors and other sensors Electronics Privately owned (IPO

soon) >1’000 Mio. 60-100x

mindmaze

Breakthrough platform combining virtual reality (VR), computer graphics, brain imaging, neuroscience and rehabilitation

ICT Privately owned 1’000 Mio. 60-80x

uBloxWireless semiconductors and modules for consumer, automotive and industrial markets

Electronics Stock Exchange >1’300 Mio. 50-80x

Esbatech Developed proprietary antibody fragment technology Life Sciences Purchased by Alcon 590 Mio. 40-60x

AutoFormSoftware products for the die making and sheet metal forming industry

ICT Privately owned (Exit / trade sale soon) >500 Mio. 30-50x

Glycart Unique technology for enhancing the efficacy of antibodies Life Sciences Purchased by Roche 240 Mio. 25-40x

Endosense Catheter with real-time, objectivemeasurements Medtech Purchased by

St. Jude 320 Mio. 30-40x

On Shoes Performance running shoes ConsumerGoods Privately owned >100 Mio. 10-30x

• Multiple sources of seed financing andinnovation prices for start-ups

• Multiple technoparks in Switzerland to hoststart-up companies

• Survival rates of companies are excellentand much higher than by internationalstandards

o In general >50% survival rate after year 5

o ETH spin-offs have 92% survival rate 5years after inception!

There is a vibrant start-up scene in Switzerland

EU USA cCallum

VC attractive and even more so in Switzerland

• Venture capital has been a highly successfulasset class over the last decades

• Valuations in Switzerland in generalsignificantly below US levels (measured byEBITDA multiples)

• Significant value can be added byinternationalizing companies and bringingthem to US-level multiples (valuationarbitrage)

• Higher likelihood to reach satisfactory IRRs

7.4%

11.3%

17.7%

21.3%

0%

5%

10%

15%

20%

25%

Barclays Government/Credit

Bond Index

S&P 500 Index U.S. Venture Capital

U.S. Venture Capital - Early Stage Index

Annu

al p

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ce

1 411

31

3 7

22

62

0

10

20

30

40

50

60

70

Seed Series A Series B Later

Valu

atio

n in

M U

SD

• Investments for growth phase inthe CHF 2-5 Mio range is hard toget for startups

• Overall funding level has gonedown over the last years

• Scarce offering of funding meanslittle competition for theinvestments

• Local proximity a huge asset tokeep costs moderate

Funding for second-stage growth is a gap

Seed capitalProof of concept0.1-1.0 Mio invest

Early stageProof of market2-5 Mio invest

Late stageExpansion>10 Mio invest

Availability of capital

Friends & familyStatePricesAcceleratorsBusiness angels

OUR FUND

We are a value-added partner to startupso Financing growth phase with CHF 2-10 Mio.o Provide knowledge, management and

access to network (suppliers, clients etc.)o Access to next round international financingo Manage for high growth

We offer access for investors wanting to participate in first class Swiss Technology

o Focus on engineering, ICT, Life Sciencesand Medtech – game changing technology

o Professional and high profile managemento Excellent network and accesso State of the art processes

We will bridge the gap

Swiss technology

start-upsInternational

Investors

OUR FUND

Our approach towards excellence in investing

Opportunity pipeline

Deal selection and investments

Portfolio management Exits

Networking• Leveraging existing and

building new links tostart-ups – build trustrelationships long-term

• Collaborate with dealscouts, business angels& partners

Strategy and technology scanning• Stay at the pulse of

technology throughconferences etc.

Networking• Liaise with investors for

potential co-investmentopportunities

Deal selection • Rigorous and in-depth

due diligence• Find the value creation

angle

Negotiation• Deal terms and contracts• Find win-win positions

Proactive management• Manage proactively

through board seats• Provide value-add to

companies throughadvice and contacts

• Stringent reporting andregular reviews

• Create PR awareness

Concentration of resources• Proactively manage

resource allocationtowards likely winners

Manage for accelerated international growth & value creation

Leverage network• Constant contact with

interested VCs andpotential strategic buyers

Managing for exit• Constant monitoring and

proactive managementtowards exit horizon

• Exit plan early on

Negotiation and exit• Capture international

valuation arbitrage• Collaborate with

experienced M&Aexperts

• Leverage agreed upondeal terms

Terms & conditions• Asset class: private equity• Currency: Swiss Francs (CHF)• Funds type: closed end fund• Fund lifetime: 8 (+max 2) years• Capital call: 1x 100%• Investors: qualified private & institutional investors• Minimum Investment: CHF 5’000’000• Target portfolio: 15-20 expected• Subscription fee: 3.0%• Management fee: 2.5% first 6 years, then 2.2%• Carried interest: 20%

Structure & setup• Structure: Swiss Technology Fund S.C.S. SICAR, Luxembourg• Supervision: Commission de Surveillance du Secteur Financier CSSF, Luxembourg• Administration: in discussion• Depot bank: in discussion• Audit: in discussion• General Partner: Swiss Tech Ventures Capital GP S.à.r.l, Luxembourg (to be founded)• Fund Advisor: Swiss Tech Ventures AG, Zurich, Switzerland (foundation in progress)

Swiss Technology Fund I - Factsheet

Seed subscription• Closing: After committed CHF 20 Mio.• Subscription price: For the first committed CHF 20 Mio. the fund offers 24% of the fund

(equivalent to 20% bonus on paid in money)

Offering round 1• Closing: Offering round 1 is closing on November 30, 2016• Subscription price: 100%

Swiss Technology Fund I - Offering

Fund performance is driven by identifying the winners and managing the middle

Exit-oriented portfolio approach and good selection diversifies risks and increases chance of „big hits“

Success stories• Return 10 – 100x invested capital• Access to deal flow and managing for growth as key

success factors (KSF)

Fully invested portfolio

Mediocre investments• Return 0.5 – 3x invested capital• Negotiation of favorable investor clauses (pro-rata,

liquidation preference) and monitoring as KSF

Failures• Loss of invested capital• Much less frequent in second stage investments• Good screening and close monitoring as KSF

We aim at an IRR of 25 – 30%Success is driven by a few highly successful investments

Investments Deal sizein CHF

TotalInvestment sum in CHF

Multiple Return in CHF

1 4.0 Mio. 4.0 Mio. 40x 160 Mio.

5 4.0 Mio. 20.0 Mio. 8x 160 Mio.

10 4.0 Mio. 40.0 Mio. 2x 80 Mio.

5 4.0 Mio. 20.0 Mio. 1x 20 Mio.

4 4.0 Mio. 16.0 Mio. 0x 0 Mio.

25 4.0 Mio. 100.0 Mio. 4.2x 420 Mio.Mgmt. Cost 20.0 Mio.

Carry (420-100) x 20% 64.0 Mio.

Return of Fund 336.0 Mio.

IRR 5 years 27.4%

Deal sources

Participate with us in world-leading ventures from these institutions (extract):

Deal pipeline (extract)

Description Sector StagePotential

Investment in CHF

PotentialMultiple

User friendly allergy diagnoses Medtech Growth 5 Mio. 30-50x

Endogenous tissue growth for cardiovascular vessels and valves

Medtech Growth 5 - 10 Mio. 20-40x

Fast detection of water quality Microbiology Growth 5 Mio. 30-50x

Computer guided laser robot osteotomy Medtech Growth 2 - 5 Mio. 20-50x

Archiving of all digital financial interactions, in accordance with the global regulatory requirement

ICT / Fintech Growth 5 Mio. 20-50x

Agile robots for nuclear decom-missioning and emergency response

Robotics Growth 2 - 10 Mio. 15-40x

A golden opportunity for the world to partner with Swiss Technology

1. Swiss Franc invested with geographic diversification – Switzerland & EU

2. Highest-yielding asset class: private venture capital

3. De-risk through a diversified, mid-stage portfolio

4. Investing into Swiss innovation power as a key value creation driver

5. A gate to Swiss Technology know-how to acquire

6. Experienced, professional management

7. Attractive non-market correlated returns with target IRR of 25-30%

Invest your capital with us

Thank you!

Christopher Hess Węgrzecki

Email: office@hessbusinessconsulting.info Phone: +48 790-644-717 (24/7)Skype:hess-chris