vc angel investor workshop - silicon valley innovation center - 2015-09-15

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1VC / Angel Investor Workshop

Silicon Valley Innovation Center September 15, 2015

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GENERALSOLICITATIONLegal Disclaimer2Under no circumstances should any material in this presentation be used or considered as an offer to sell or a solicitation of any offer to buy an interest in any individual company or investment fund managed by Georgetown Angels (Rubicon Venture Capital LLC and Georgetown Angels Fund I DBA Rubicon Venture Capital). Any such offer or solicitation will be separately made only by means of the Confidential Private Offering Memorandum relating to the particular fund to persons who, among other requirements, meet certain qualifications under federal securities laws and generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments. Copyright 2014 All rights Reserved Georgetown Angels & Rubicon Venture Capital.

This Confidential Investor Presentation has been prepared for discussion purposes only. It is being delivered on a confidential basis to specified parties solely to assist them in deciding whether to proceed with their investigation of Rubicon Venture Capital (the Company). This Investor Presentation does not purport to contain all of the information that may be required or relevant to a recipients evaluation of the Company. The distribution and use by each recipient of the information contained herein and any other information provided may not be distributed, reproduced or used without the express consent of the Company or for any purpose other than the evaluation of the Company.

Neither the Company or any of its affiliates or representatives makes any representation, warranty or guaranty of any kind, express or implied, as to the accuracy, completeness or reasonableness of the information contained herein or any other written or oral communication transmitted or made available to the recipient. The Company and its affiliates and representatives expressly disclaim any and all liability based on or arising from, in whole or in part, such information, errors therein or omissions therefrom.

This Investor Presentation includes forward-looking statements and projections provided by the Company. Such projections and forward-looking statements reflect various assumptions of management concerning the future performance of the Company, and are subject to significant business, economic and competitive uncertainties and contingencies, which are beyond the control of the Company. Actual results may materially vary from anticipated results. No representations or warranties are made as to the accuracy or reasonableness of such assumptions or the projections or forward-looking statements based thereon. Only those representations and warranties that are made in a definitive written agreement relating to a transaction, when and if executed, and subject to any limitations and restrictions as may be specified in such definitive agreement, shall have any legal effect. Each recipient should make an independent assessment of the merits of pursuing a transaction and should consult its own professional advisors.

The delivery of this Investor Presentation should not imply that there has been no change in the business and affairs of the Company since the date of the Investor Presentation. Neither the Company nor its affiliates or representatives undertakes any obligation to update any of the information contained herein. The Company is free to conduct the process for the transaction as it determines in its sole discretion (including without limitation, ceasing to proceed with any transaction, terminating further participation in the process by any party, and entering into an agreement with respect to a transaction without prior notice to you or any other person) and any procedures relating to such transaction may be changed at any time without prior notice to you or any other person.THESE MATERIALS ARE PROVIDED FOR CONVENIENCE ONLY AND MAY NOT BE RELIED UPON. PROSPECTIVE INVESTORS MAY RELY ONLY UPON THE FUNDS PRIVATE PLACEMENT MEMORANDUM OR AN OFFICIAL SUPPLEMENT THERETOConfidential To Recipient

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3andrew@rubicon.vcTwitter: @RomansVentureswww.linkedin.com/in/romansVery active venture capitalist in Silicon Valley & New York Rubicon Venture Capital roughly 1 new investment per month unique value add platform for startupsVC-backed Entrepreneur - The Global TeleExchange (The GTX), a $50M venture-backed telecom VoIP ventureRaised $27m from Lucent Technologies + $20m VCVC investment banker / advisor - Georgetown Venture Partners & Georgetown AngelsFounder of The Founders Club (42 VCs on the advisory board)Author and frequent venture capital speaker on CNBC & msnbcFluent in English, German & French, conversant Slovak lived 15 years in EuropeBA University of Vermont, Duke University, FU Berlin, MBA in Finance from Georgetown University on scholarship

Andrew Romans, Rubicon Venture Capital

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4Translated into Chinese & Russian

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5Overview & analysis of the market from Pre-Seed, to Seed, Later Stage Seed / Seed Extension, Series, A, B, C, D to the private IPO phenomenon - understanding trends - which are crowded, overpriced, underpriced and key risk pointsWhy investing now is more attractive than ever beforeWhat industries, sectors, company stage and geographies are best for youConvertible notes - key points and the meaning beyond the moving partsProgram for the day 1/3

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6Priced equity rounds -key points and the meaning beyond the moving partsValuation concepts on pricing valuations when investing, exiting and risk tied to perceived exitmultiplesPortfolio construction strategies for angels and VCs - how to allocate your capitalBest practices for sourcing deal flow and conducting due diligenceTactics to get into oversubscribed dealsProgram for the day 2/3

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7Strategies for continuing to invest in portfolio companies a 2nd, 3rd, 4th, 5th time, etcBest practices for post investment information rights,governance, adding value and Different options to invest ranging from Angel List, to other investor platforms, angel groups, demo days,accelerators,VC funds, SPVs, tax breaks for UK, EU and Israeli taxy payersDifferent options to get liquidity on the secondary market before definitive liquidity event for startup / how to sell some stock before the final exit Program for the day 3/3

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The process of Startup financings

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9Different stages of investingSmart, but a lot of work / needs a machineCrowded easy to accessover priced Less easy to access slightly over priced Difficult to access optimal risk / rewardDifficult to access optimal risk / rewardCrowded difficult to access over priced w/protection

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10Tech VC more attractive now than ever before5.6x more Internet users now than in 2000. Women who make more than 50% of consumer purchase decisions are online (fixed and mobile).Broadband connections are 120x faster. 1995 56k modems > today 6.7 Mbps average US Internet connection.

People are mobile connected everywhere all the time. Personal, location aware, at point of purchase. 138m US smartphone users, up 18.8% since 2012. 99m US tablet users, up 42.3% since 2012.

Everyone socially connected driving viral growth rates. Facebook 1bn active monthly users. Twitter 288m. LinkedIn 200m. YouTube 4bn+ hours of video watched by 1bn+ monthly users.

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11Tech VC more attractive now than ever beforeEveryone has credit cards with single click to purchase. Apple ecosystem $25bn up from zero in 2008

Amount of LP money addressing series A & B down. Most so-called VC dollars are investing in growth not VC. Amount of actual committed VC capital is far less now than in 1998 and todays system should require more to be right-sized

Amount of money investing in Seed increasing. Number of startups being created is increasing brings more funded deal flow to A & B rounds where Rubicon is focused

VC is the best place to position for a shift in the economy or correction of possible bubble. Pre-Seed, Seed, Growth and PE will be hit hard compared to early stage VC

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121999 vs 2014 we are not in a bubble19992014US tech funding $$71bn$48bnFunding as % US Tech GDP10.8%2.6%S&P IT index forward P/E39.0x16.1xGlobal Internet Population0.4bn people3bn peopleUS e-commerce revenues$12bn$304bnNumber of IPOs37153Median time to IPO4 years11 years

Source: Andreessen Horowitz70% of VC dollars are actual private IPO expansion capital / Not enough VC cash in system

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13sectors, stage & geographies best for you?Internet & Software

Consumer

Enterprise

Hardware

Cleantech

Medtech

BiotechGEOGRAPHY

SECTOR FOCUS

STAGESeed

Later Stage

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14The different processes of a VCs jobWhere do you fit or what makes you interesting enough to start a fund?

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15Why convertible note vs a priced round?Cap or discount rate to the next priced round lower of the twoDiscount rate - 10% to 30% - 20% is the norm uncapped notes?Interest rate 4% to 8% - 5% or 6% is the normConversion feature what happens if NewCo is sold prior to a priced round. 1x, 2x, 3x or capMaturity date or SAFE note 12, 18 or 24 monthsWhats behind the moving parts?Pricing for successConvertible Notes

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16Pre-money valuation = $10m (classic example)Size of financing round = $5m (classic example) Post money Valuation +

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