Ypo Gold Presentation

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YPO GOLD PRESENTATION

How Angels Support Innovation

Googleplex – September 21, 2016

Nathan McDonald Managing Partner, Keiretsu Capital Keiretsu Forum Northwest

7. What Rankareas of Importance of innovation(A) of Cultural do Attributesyou want to track?

Big Data Analytics 50% Internet of Things 43% Enterprise Productivity 37% Cloud 37% Autonomous Transportation 23% Augmented / Virtual Reality 20% Genome Based Life Sciences 20% Nanotechnology 17% Distributed Design & 13% Cleantechnology 10% Drones and Drone Delivery 10% Blockchain 7% Confidential 2 © Keiretsu Capital, LLC 2016. All rights reserved Four Questions:

• What is Keiretsu Forum? • What best practices drive angel returns? • How has Keiretsu Forum leveraged these practices? • Specific examples of innovative companies backed?

Confidential 3 © Keiretsu Capital, LLC 2016. All rights reserved • Four Questions • What is Keiretsu Forum? • What best practices drive angel returns? • How has Keiretsu Forum leveraged these practices? • Specific examples of innovative companies backed?

“Great Association…”

• 2,500+ Members • Global Network of 46 Chapters “…with Quality Deal Flow” • Education and Charitable Giving • 1,000+ Companies Funded • Over $750M Invested • Diverse Industries

Most Active Venture Investors, 2015 Largest US Angel Groups, 2015 Global Ranking Deals USA Ranking Deals USA Angel Group Rankings 1. Sequoia 169 1. NEA 127 1. Keiretsu Forum & Capital 2. 500 Startups 150 2. Keiretsu 89 2. Tech Coast Angels 3. NEA 141 3. 500 Startups 81 3. Central Texas Angel Network 4. Accel 133 4. Accel 76 4. Houston Angel Network 5. Keiretsu 123 5. Andreessen 74 5. Alliance of Angels 6. Social Starts 79 6. Social Starts 70 6. New York Angels

7. Andreessen 78 7. GV 69 7. Wisconsin Invest. Partners 8. KPCB 75 8. KPCB 66 8. Hyde Park Angels 9. GV 74 9. First Round 64 9. Maine Angels 10. Intel Capital 74 10. Sequoia 63 10. Sand Hill Angels + 2

Sources: Pitchbook PE & VC Global 2015 Annual League Tables Report, ARI Halo Report, Keiretsu Forum Analysis Confidential 6 © Keiretsu Capital, LLC 2016. All rights reserved Founded in 2000 | Funded 1,000+ companies US $750 M+ invested to date | 2,500+ members 46 chapters in 12 countries on 3 continents

Orange County

Paris Singapore Andalucía Kirkland-Eastside Pebble Beach Spokane-Inland Atlanta London Philadelphia Tacoma Bangalore London, Canada Pittsburgh Tel Aviv Barcelona Los Angeles Portland Tri State Beijing Madrid Prague Toronto Boise Miami Rockies Vancouver Chennai, India Mumbai San Diego Vaughan Donostia/San Sebastián New York San Francisco Ventura County East Bay Nordics Seattle Victoria-Vancouver Island/BC Istanbul North Bay Shanghai Washington D.C. Confidential Jakarta 7 © Keiretsu Capital, LLC 2016. All rights reserved Silicon Valley Waterloo-Wellington

Angel Group Focus

Stage Pre- Seed/ Early & Growth seed Start-Up Funding gap Late VC Capital

Source Founder Individual Angel groups Venture funds friends angels & groups and family

Amount $25k to $100k to $500k to $2m $2m and up invested $100k $500k and up

$24.1B in 73,400 deals $72B in 3,916 deals

Source: University of New Hampshire 2014, PriceWaterhouseCoopers 2014, Dow Jones VentureSource Confidential 8 © Keiretsu Capital, LLC 2016. All rights reserved Keiretsu Forum Global Chapter Investments, 2015

Financing Consumer/Retail 5% 14%

Lifescience Real Estate 24% 24%

123 companies funded by Keiretsu Forum Global Technology 33% Chapter Members

Investment worth $72M+

• What is Keiretsu Forum? • What best practices drive angel returns? • How has Keiretsu Forum leveraged these practices? • Specific examples of innovative companies backed?

2007 2.6 3.5 27% 52% 90%

2009 2.2 3.6 22% 56% 80%

2.1 29% Early stage VC ’05-’11 Gross TVPI & includes carried value

Driver Comment

Proprietary deal flow Sourced from membership Up to 70% for established angel groups Strong due diligence Angels that spend more than 40 hours achieve a 5.9x return culture compared to low diligence investors who achieve a 1.1x return*

Active participation in Angels who interact 2 times a month or more with portfolio portfolio companies companies achieve a 3.7x return compared to passive investors who achieve a 1.3x return* Deep expertise in Angels investing in areas of direct industry experience achieve investment areas multiples twice as high as those invested outside their expertise*

Tight relationships with Leading angel groups partner with venture capital and strategic follow on investors investors to enable follow on rounds and exits

* Source: Kauffman Foundation, Professor Wiltbank of University of Willamette

• What is Keiretsu Forum? • What best practices drive angel returns? • How has Keiretsu Forum leveraged these practices? • Specific examples of innovative companies backed?

Investment Process 30-50 7-10 4-5 3-4 Deal Forum Committee/K4 Due Diligence Member Screening Meetings Review Multi-chapter sharing of

Fact Sheet Application Application FactSheet deal flow

Start Month 1 Month 2 Month 3

1. Deal Flow 2. Selected Pitches 3. Due Diligence 4. Investments 5. Reporting

• 46 Keiretsu Forum • Monthly meetings • Member driven • Individual checks • Informal Chapters worldwide • 3-5 pitches / month • Industry experts • Direct investments • Company driven • >2,500 Angels • Start up/Early VC • Functional experts • $0.5-2m invested • Irregular • >10,000 deals / yr • Strong teams • Disciplined process • Average $50k check • 70% proprietary • Large markets • Collaborative • Standard terms • Industry experts • High growth • Shared • Board seat (s) • Vertical focus • Technology driven • Deep • Clear criteria • Scalable solutions • >90% rejected • Most rev. $1m+ Fund Fund Fund • Selected other “elite” angel groups • Pre-money • Screen out non- • Co-invest • Regular and secondary market Valuations $1-20m conforming deals opportunities • <35% of round • Web enabled • Rounds $1-10m • Review angel DD (no primary DD) • Follow on rounds as • Monitoring appropriate • Assist in negotiation of value and terms

• Over 150 Senior Advisors

• Across sectors, functions, geographies

• Sourcing, DD, Expertise, Advice, Access, Relationships, Exits

• Powerful Board Representation

• Accessible to all portfolio companies

• Using TrustedPeer Platform

• Closed network

Keiretsu Capital Funds Rationale • Members wanted single vehicle to provide diversification & access • Co-invest behind Keiretsu Forum and other “elite” angel groups • Portfolio of 40+ companies in high growth, technology driven sectors • Seek to mirror the “angel return” adjusted for costs

Funds Today • Launched in September 2014 • Now 152 angel investor LP’s committing $10.3m • 42 companies in portfolio – targeting 2 to 4 investments a month • Funds have proven very popular with Keiretsu Forum members • Fund III open and Venture follow-on Fund

• What is Keiretsu Forum? • What best practices drive angel returns? • How has Keiretsu Forum leveraged these practices? • Specific examples of innovative companies backed?

Confidential 21 © Keiretsu Capital, LLC 2016. All rights reserved Companies backed by Keiretsu Forum & other groups including Angels Forum, Band of Angels, Sand Hill, & Tech Coast Angels, etc. Thank You!

• Questions & Answers

• YPO members welcome as Keiretsu guests – Email to [email protected]

• Let us know what your interest/focus is