Miracles

Hermann Hauser

Cambridge HVM MNT Expo December 2006 Slide 1 Why do Miracles happen?

• People • Disruptive Technology • Clusters and • Community

Slide 2 From R to D

Research Technology Product Development Development Old: AT&T Corporate University Research, Big Company Consultancy

New: CISCO M&A, IPO University Start-ups Big Company

Slide 3 European Miracles

• Google • Wilex • ARM • CSR • Skype • Solexa

• Plastic Electronics Slide 4 Wilex

• Biopharmaceuticals • Cancer • Munich based • > $200m market cap • 1996: winner business plan competition • Frankfurt stock exchange

Slide 5 ARM

• Acorn Team plus Sir Robin Saxby • Acorn Risc Machine • Value: Low Power, Low Cost, Instruction set • ARM Platform: 2 BILLION in 2005 • De Facto Standard: – Mobile Phones – PDAs – iPod – Gameboy • ARM Community • Market value $3bn

Slide 6

Slide 7 Skype

• Founded 2002 • Nicolas Zenstroem • Janus Friis • Sold to Ebay €2.6bn +€1.4bn earn out • P2P VOIP on internet

Slide 8 CSR • CCL team spun out in 1999 • First Single chip Bluetooth: low power, low cost, small form factor • First single chip 802.11: low power, low cost, small form factor • Fabless Chip company • BT, 802.11 WIFI standard • Mobile phone community • 2005: Revenues:$500m, Profits: $100m • Market value $2bn

Slide 9

• University ranked #3 in the world • 72 Nobel laureates: – global #1 – More than any country except US and UK • High-tech cluster: #1 in Europe – 1,000 high-tech companies – 40,000 employees • ARM, CSR, CDT, Plastic Logic

Slide 10

• Maxwell: useful equations • JJ Thomson: electron • Earnest Rutherford: Proton • Chadwick: Neutron • Crick & Watson: DNA • Richard Friend, Jeremy Burrows: OLEDs • Henning Sirringhaus: Plastic transistors, C-

mos Slide 11 Plastic Electronics

• Richard Friend, Henning Sirringhaus, Stuart Evans + Ink-jet cluster • Plastic transistors: low cost, flexible, large area • New Value stack for Plastic Electronics • Flexible displays • Cambridge Ink-jet, polymer community • PEM centre?

Slide 12 First Transistor Printed Transistor 20th Century 21st Century • •

Slide 13 Slide 14 E-Newspapers M B I

: e c r u o S

Slide 15 Silicon vs. Plastic…

Conventional Printed Plastic Semiconductor Electronics

Direct printing & solution processing

Photolithographic patterning, high temperatures & vacuum processing Slide 16 Slide 17 Solexa

• Ultrafast Gene-sequencing • Origin: Chemistry Dept. , Subramanan • CEO: John West • Whole Genenome in less than one Week, for less than $100,000 • Personalised medicine • Camp: Sanger centre, Lynx

Slide 18 Corporate Venture Capital

• ICT: Intel, Cisco, Siemens • BIO: more UK activity • Most important MISSING link

Slide 19 When is Innovation Successful?

When a defensible break-through connects with a large market.

Slide 20 Where does Innovation happen?

In Clusters like

Silicon Valley, Route 128, North Carolina Cambridge, London Munich, Paris, Stockholm, Helsinki,

Slide 21 Clusters

• World Class University • Entrepreneurial Spirit • Venture Capital • Supportive Government: CGT, R&D credits, Immigration • Close Relationship with Lead Companies • Infrastructure: Legal, Accounting, Leasing • Real Estate: Availability, Short Leases • People Network!

Slide 22 Venture backed IPO’s

90 85 80 US 82 s

h Europe 69 t 70 69 n s 67 65 o O 60 62 m P

I 57

2 54 f 47 48 1 o 50 49 48 t o 46 s 46 41 a N 40 l l 35 37 a e

t 32

h 30 o t 28 24 28 26 T r 24 23

e 21 21 20 22 18 v 21 14 13 15 15 o 13 10 9 11 9 6 5 0 4Q Q1 2Q 3Q 4Q Q1 2Q 3Q 4Q Q1 2Q 3Q 4Q Q1 2Q 3Q 4Q Q1 2Q 3Q 02 03 04 05 06

Slide 23

Source: VentureSource Average Deal Size, Seed & First stage

US Europe Amadeus Companies 178% 180% ) 170% m 160% €

( 150% 142% 138%

e 140% z

i 130% 121% 115% 115%

S 120% 110%

l 110%

a 100% e 90% D 80% 68% 71% e 70% g 60% 48% a 46%

r 50% 41% 40% 35% e 40% 32% 34% v 30% A 20% 10% 0% No of rounds 1999 2 0 0 0 7 2 0 0 1 20 2 0 0 2 9 2 0 0 3 2 2 0 0 4 5 2 0 0 5 2 2 0 0 6 e *2 4 (Amadeus companies) * 06 estimate is based on Q1-Q3 2006

Slide 24 Note: Later Rounds include Second, subsequent Rounds & Restarts. Europe shown as percentage to US Source: VentureSource, Amadeus Analysis Serial Entrepreneurs

Serial Entrepreneurs

100% 100%

80% s e i n a

p 60% m o 41% C

f 40% o

. o N 20% 17%

0% AM I AM II AM III

Slide 25

Source: VentureXpert Conclusion

• Miracles happen all the time • Technology Development Key • Plastic Electronics NEXT Growth Sector • Needs Clusters and VC • Have Faith in Europe

Slide 26