CVC Strategy: Lessons from 2020, Strategic Considerations for 2021

1 Working with DLA Piper at a glance

• Working with DLA Piper’s Corporate Venture group brings several benefits to our clients: • Capacity: Corporate venture capital deals frequently involve short deadlines – due to the large number of partners and associates who routinely work on transactions, we can ensure that the necessary resources are available for our clients • Integrated Approach with full scope of legal disciplines to support transactions: Our success in supporting clients in corporate venture capital transactions is underpinned by market leading tax, intellectual property and technology, labor and employment, data privacy and security, and regulatory specialists who are deployed when their expertise is required • Large international network: DLA Piper is one of the few international legal service providers with access to a large international network of corporate venture capital legal advisors and the support of 4,300+ lawyers in more than 90 offices in over 40 countries • Local contacts: Instead of coordinating with different legal advisors, our clients will have a bi-coastal team of US- based corporate venture capital partners as responsible contacts who will coordinate a transaction project on a national or international level which saves time and brings efficiency to the process • Expertise: Our lawyers have extensive know how executing complex corporate venture capital transactions and can bring the experience of many projects and transactions with them • DLA has the leading corporate venture practice, Global Corporate Venturing • DLA ranked #1 Global M&A deal volume in 2020 for the eleventh consecutive year, Mergermarket

www.dlapiper.com 2 Corporate Venture Recognition

• In the past three years, completed over 2100 deals, totaling over US$31 billion • Twice named the "Legal Firm of the Year“ (Global Corporate • We advise investors and companies on 800+ venture and debt financings Venturing) annually and have deep experience working with corporate venture funds on • The only law firm to rank in the investments, commercial agreements, acquisitions and disposals top five for M&A, Private Equity and Venture Capital (PitchBook) • We are active in global markets on behalf of our clients every day and routinely execute a large volume of complex venture transactions, • #1 law firm advisor to investors allowing us to provide clients with: (PitchBook) • Efficient, cost-effective service regardless of the size of the deal • Recognized – Nationwide: • A highly integrated and skilled team, from senior partners to Startups & Emerging Companies (Chambers USA 2019) experienced associates, who are conversant in a variety of legal disciplines • Recognized as the 2nd global elite law firm brand in the Acritas US • Thought leadership and training on structures, trends and best practices Law Firm Brand Index 2020 in corporate venture • Relationships and insight by leveraging the collective knowledge and contacts of DLA Piper’s lawyers in offices throughout the world

www.dlapiper.com 3 Representative Corporate Venture Clients

www.dlapiper.com 4 Representative Corporate Venture Transactions

Series C investment Series 6 financing of Series A-3 and Series Series B financing of Series B investment in Limelight Health Proterra, Inc. A-4 financings of Serviz, Inc. in Helium Systems, CollabIP, Inc. (dba Inc. Tethr)

Series E investment $18 million Series B Series A financing of Series A Preferred Series B financing of in DocuSign investment into Suja Life, LLC Stock financing of ARC Holdings Skyera, Inc. Keemotion, Inc.

Series A financing of Series E Preferred Series C Preferred Financing of Libre Series E financing of Stanson Health, Inc. Stock financing of Stock financing of Wireless Guardant Health BORQS Ltd. Matterport, Inc. Technologies, Inc.

www.dlapiper.com 5 Corporate Venture: One Tool in the Innovation Tool Kit

• Corporate venture capital • Investment/engagement with accelerators and other startup programs • Collaboration with other corporations • Open source software foundations: OpenStack Foundation/OpenMAMA • Industry collaborations

• Internal projects/entrepreneurship • Internal projects for internal use • Process for spinning out “on the shelf” technologies • Use startup methodologies such as “lean startup” (adopted by GE) • M&A • Digital transition to integrate new technologies more swiftly

www.dlapiper.com 6 Corporate Venture: Strategic Alliances to Serve Innovation Needs of Corporations

Innovation M&A

M&A Corporate Venture Capital

Incubation Commercial Piloting Corporate R&D

Venturing Innovation Integrated Innovation Center of Excellence Corporate Innovation

Innovation Partnering

Incubation, Commercial Piloting

JV and Strategic Licensing Alliances

www.dlapiper.com 7 Why do Corporate Venturing?

Create a channel to stay current on Optimize your current business by Drive your company into adjacent and emerging trends and technologies – leveraging the speed, agility, and new markers using a portfolio staying up to speed on the “art of the possible.” innovations of startups. approach by placing a series of small bets.

www.dlapiper.com 8 Options for Corporate Venturing.

Design, launch, and manage world-class CVC Funds leveraging the experience, deal flow, global network, and success of our top-tier Silicon Valley VCs.

Support Executive Investment Committees without a CVC, who are investing off the balance sheet — bringing the discipline, portfolio mindset, metrics, and best practices needed to drive meaningful growth.

Adopt best-in-class methods for partnering with and leveraging external startups to drive maximum value and innovation across the core business.

www.dlapiper.com 9 2020 in Context “There has been more innovation in the last six months than in the last six years”

Mohanbir Sawhney, professor at the Kellogg School of Management at Northwestern University

www.dlapiper.com 10 2020 Trends

• Remote working

• Rethinking workforce management

• Move to the cloud

• New business models • Telehealth • eLearning • DeFi

www.dlapiper.com 11 Global Venture Capital Transactions

www.dlapiper.com 12 Global CVC Transactions

www.dlapiper.com 13 Global VC Transactions by Industry

www.dlapiper.com 14 Global CVC Transactions by Industry

$160.00B

$140.00B

$120.00B

$100.00B Materials and Resources Information Technology $80.00B Healthcare Financial Services $60.00B Energy (B2C) $40.00B (B2B) $20.00B

$0.00M 2016 2017 2018 2019 2020 2021

Source: PitchBook Data, Inc.

www.dlapiper.com 15 Global Venture Capital Transactions by Round

www.dlapiper.com 16 Global CVC Transactions by Round

100% Angel 90% 19th Round 80% 16th Round 15th Round 70% 14th Round 60% 13th Round 12th Round 50% 11th Round 40% 10th Round

30% 9th Round 8th Round 20% 7th Round 10% 6th Round 5th Round 0% 2016 2017 2018 2019 2020 2021 4th Round 3rd Round Source: PitchBook Data, Inc.

www.dlapiper.com 17 2021 Technology Trends (Gartner)

• Internet of Behaviors

• Total Experience

• Privacy Enhancing Computation

• Distributed Cloud

• Anywhere Operations

• Cybersecurity Mesh

• Intelligent Composable Business

• AI Engineering

• Hyperautomation

www.dlapiper.com 18 The key is to create actionable objectives.

DEVELOP A Drive growth with fast access to PORTFOLIO AND innovation. Be credible towards startups and top VCs / CVCs PIPELINE OF NEW VENTURES

SCALE LEARNING Develop a sensor network to stay current on ACROSS THE emerging trends and technologies to channel back to the Mothership. MOTHERSHIP

DEVELOP SPEED AND Make small bets, fail fast, maximize learning. Not AGILITY judged on individual investment, but portfolio quality.

MOVE THE NEEDLE Deliver meaningful financial results, new revenues, startup equity, better-informed M&A

www.dlapiper.com 19 Here’s a starting list of what startups and VCs need.

Access to Customers Market Knowledge Brand Validation Channel Partners Operating Expertise Last and Least - Capital

www.dlapiper.com 20 How your CVC fund will win in 2021

Build Hybrid Team Sense of Network Skillset Location Matters Stability Urgency Build a solid and Combine the skills and While the Silicon Valley Scout a team of Sense of urgency and extensive internal network of a company is the oldest and competent innovation flexibility in decision- innovation veteran with deep knowledge deepest startup and investment making from the network over 2 of company core ecosystem in the world, professionals. investment committee. years to generate competencies, assets, other global innovation deal flow and capabilities, and business with hubs are important to EIRs with deep Silicon Make small bets, fail accelerate a Venture Capital veteran with monitor. Valley connections. fast, maximize learning. startups. Silicon Valley (and / or global ecosystem) networks, insider Senior leader who can access, and deal-making navigate the experience. Mothership, incentivized to slay for the long term.

Report to Investment Mothership Product- CxO Commitment Management Reciprocity Market Fit Reporting to CxO Commit to incubate new Good working Learn and adopt the Leverage Silicon Valley will accelerate business models and invest relationships with "pay-it-forward" best practices to deeply your efforts. selectively in startups. individuals throughout approach of working understand customers R&D, CFO, and Not a blind cash pool. Agile the organization: within the ecosystem. and consumers. others as and responsive. brands, marketing, advisors as R&D. Understand the needs Stay relevant and needed 24 to 48-hour decisions on of all of our current on trends, investments — no obstacles Internal communication stakeholders in order to technologies, and to moving fast. to understand needs, maximize success for business models. share learning, and the CVC and the generate a win-win Mothership. relationship. www.dlapiper.com 21 New Initiatives in Corporate Venturing

www.dlapiper.com 22 Where Global Innovation and Capital Meet

www.dlapiper.com 23 Global Corporate Venturing

Information ‘‘ Through our News on the latest deals, people, companies, and firms investing in the private platform, we markets provide the world’s Insights investors and the Quantitative and qualitative data on investment activity and the latest trends along wider innovation with leading industry perspectives and best-practices with a focus on strategy, operations, deal sourcing, portfolio support, talent, recruitment and professional ecosystem with the development information, Access insights and Connect and build relationships with a global network of peers, co-investors, access needed to entrepreneurs, LPs and technology decision-makers. Elevate thought leadership by disseminating original content on GCV owned publications or speaking at GCV succeed in a conferences constantly changing world ’’

www.dlapiper.com 24 Global Innovation Venturing Initiative

Chaired by Scott Sandell, General Partner of NEA, Global Innovation Venturing brings together various sources of capital under one banner to help support entrepreneurs, foster innovation and advance the progress of start-up companies. Members include CVCs, VCs, LPs, Family Offices, Angel Investors and others within the venture capital ecosystem.

GIV is a division of Global Corporate Venturing (GCV) which provides news and data on venture deals, with connections to more than 10,000 corporate investors worldwide. By collaborating with other parts of the venture community, member portfolio companies will benefit as they search for capital, customers, product development, hiring and eventually, an exit.

For more information contact: [email protected]

www.dlapiper.com 25 THE FIRST SPECIALIZED INSTITUTE DEDICATED TO CORPORATE VENTURING INDUSTRY ADVANCEMENT, STAYING POWER AND IMPACT

Actionable professional development and certification, rigorous research, and community building

www.dlapiper.com Institute Advisory Board

www.dlapiper.com 27 Institute Curriculum Roadmap

The Essentials CV Common Language & CVC Essentials CV Essentials for Enterprise Context (For new CV programs)

Q2, 2021 Q2, 2021 Deep Dives CV Professional Development & Landing the Value of High Performance Strategic Certification Corporate Venturing (CVBD) Investing (CVC)

Q2 & Q4, 2021

Hot Topics Legal Topics: CV program CV portfolio & CV Continuing Education Board & Observer CV HR & incentive marketing & performance Term sheets, IP, programs community building management Exits…

Institute Community – Alumni Communities of Practice, Mentors, Experts

www.dlapiper.com 28 The Corporate Venturing Program Landscape

www.dlapiper.com 29 Contact us for more information or to register

• gcvinstitute.com • [email protected]

www.dlapiper.com 30 Global Reach

DLA Piper presence

Cooperation firm

• National and international coverage to meet the demands of a fast-evolving, increasingly global environment and to reduce coordination risks • With lawyers located throughout the globe —including the U.S., Canada, Latin America, the Middle East, Africa, and Asia Pacific, DLA Piper is positioned to provide clients with guidance from anywhere in the world • Ranked by Law360 as the #1 Global Law Firm based on global breadth and complexity of the firm’s cross-border work • 4,300+ lawyers in more than 90 offices in over 40 countries • Coverage in 20+ additional countries through DLA Piper Relationship and Focus firms *Cooperation Firm www.dlapiper.com 31 Mark F. Radcliffe

Mark Radcliffe is a partner in the Silicon Valley office of DLA Piper. Mark’s practice focuses on representing corporations in their intellectual property and finance matters. In his thirty years practicing law in Silicon Valley, he has worked with a wide variety of companies from emerging growth companies such as Tarana Wireless, Bulletproof360, Netratings, Lightbend and Magnum Semiconductor, Inc. to larger companies such as Hewlett Packard Enterprise Company, Sony Corporation, Siemens Corporation, Sun Microsystems, Inc. and Hitachi, Ltd. Mark Radcliffe Mark is the Chair of DLA’s Corporate Venture Practice Group which represents many Partner global Fortune 100 companies in their venture capital transactions. The Corporate T: +1 650 833 2266 Venture Practice Group also has developed a training program of four modules [email protected] particularly designed for corporate venture capitalist and which has been presented to over fifteen corporate venture groups. Mark is a regular speaker on venture capital, Silicon Valley Office particularly corporate venture capital. 2000 University Avenue East Palo Alto, California 94303 In 1997, the National Law Journal cited him as one of America’s 100 most influential lawyers. The San Francisco Business Times has named him among the best lawyers in the San Francisco Bay area. Leading international legal publishers consistently rank Mr. Radcliffe among the top lawyers in his profession. The respected English publishers Chambers and Partners has repeatedly named him in Chambers USA: America’s Leading Lawyers for Business, and has described him as “outstanding” and “a leader in open source-related matters.” Legal 500 also recognizes him, commenting: “His expertise in providing strategic IP advice, with particular specialism in open-source matters, has won him plaudits. Indeed, one client describes him as ‘probably the best lawyer in his field.’” In 2009, 2010, 2011, 2012 and 2013 Intellectual Asset magazine named him among the “IAM 250 - The World’s Leading IP Strategists.” In 2014 and 2015 Intellectual Asset magazine named him among the “IAM 1000 - The World’s Leading Patent Practitioners.” In January, 2013, he was appointed by the Department of State as the Private Sector Co Chair of the US Japan Innovation and Entrepreneurship Council. He earned a B.S. in Chemistry magna cum laude from the University of Michigan and a J.D. from Harvard Law School.

www.dlapiper.com 32 Paul Holland

A successful veteran of Silicon Valley, Paul Holland is Managing Director and VC-in- Residence at Mach49, where he leads the company’s Corporate Venture Investing Practice. Paul works with global businesses to design, launch, and manage CVC Funds that leverage the experience, deal flow, global network, and success of his team of top- tier Silicon Valley VCs. Paul supports Executive Investment Committees, bringing the discipline, portfolio mindset, metrics, and best practices needed to drive meaningful growth. He also teaches clients best-in-class methods for partnering with and leveraging Paul Holland external startups to drive maximum value and innovation across the core business. [email protected] Paul has been a General Partner at leading venture capital fund, Foundation Capital, for 18 years helping take startup companies from zero to $100M to IPO or acquisition. He enjoys being on the front lines—working side-by-side with entrepreneurs developing fast- growing, dynamic new ventures—experience he is also bringing to support Mach49’s work helping large companies build their own disruptive ventures. Prior to joining Foundation, he had an equally stellar operating career, joining Reed Hastings at Pure Software, ultimately running Europe, Middle East, and Africa and helping Pure have one of the hottest IPOs of that vintage. He was later recruited by Benchmark Capital to join Mark Gainey at Kana Communications as its first C-suite executive to help Kana grow quickly and go public, ultimately attaining a $9B market cap. In total, Paul helped generate over $13B in market capitalization during his operating career. Paul began his career at SRI International, where, as he likes to tell his kids, he was a “human Google,” conducting inquiries on a broad variety of topics for global businesses. He received his MBA from UC Berkeley, MA from University of Virginia, and BS from James Madison University. Paul is a former president of the Western Association of Venture Capitalists, and he is the producer of the documentary Something Ventured, about the early days of the Silicon Valley. He premiered his newest creative endeavor for the stage: Walls: An American Story in January 2020. He has guest lectured on entrepreneurship at Stanford, Harvard, Dartmouth, MIT, University of Virginia, and James Madison University.

www.dlapiper.com 33 Corporate Venture: Training Programs

1. Term Sheets for Corporate Investors. This presentation is designed to assist corporate investors to understand how venture capital term sheets operate with particular emphasis on special issues for corporate investors. The presentation is based on model Series A and Series B term sheets. Time: 60 minutes 2. Best Practices for Board Observers and Board Members for a Private Technology Company. This presentation is designed to train individuals to serve as observers or members of the board of private technology companies and is available in person. The presentation can be of value both for the experienced corporate investor and the new corporate investor. It focuses on the legal and practical aspects of service as a board observer and board member. The presentation uses a PowerPoint presentation and provides substantial materials: six memorandums (Basic Fiduciary Duties, Duties upon a Merger, Duties in a Spinout, Duties upon Insolvency, Intellectual Property, Critical Issues and Patent Prosecution Strategy) and a Summary of Best Practices. Time: 240 minutes 3. Term Sheets for Corporate Investors. This presentation is designed to assist corporate investors to understand how venture capital term sheets operate with particular emphasis on special issues for corporate investors. The presentation is based on model Series A and Series B term sheets. Time: 60 minutes 4. Developing and Managing Intellectual Property Strategy for Portfolio Companies. This presentation is designed to train investors to assist in the development and management of intellectual property strategy for their portfolio companies which matches their business strategy. Intellectual property has become critical to protecting a company’s business and building value for a merger. The sale of the Friendster patents for $40 million and the purchase of Motorola Mobility for $12.5 billion have emphasized the importance of intellectual property. The presentation will describe basic forms of intellectual property, common mistakes made by startups and successful strategies of companies and startups. And the presentation will address the concerns of acquiring companies and the strategies to ensure the highest possible value for a startup in an acquisition. Time: 90 minutes

www.dlapiper.com 34 Representative M&A Clients

www.dlapiper.com 35 Representative M&A Transactions

Acquisition of Acquisition of Joint venture with Joint venture with Represent Centerplate Acquisition of Sigma Thunderbird School TDK International Inc. US$675 million Designs, Inc. of Management US$71 million $US282 million US$102 million

Acquisition of assets Acquisition of NXP Acquisition of Peet’s from Nesscap Semiconductors N.V. Coffee & Tea Majority ownership Acquisition of Dragon Energy, Inc. (CVE: US$47 billion US$ 1 billion joint venture with Innovation NCE) Hagie Manufacturing US$23 million

www.dlapiper.com 36 Transactional Tax Recognition • Named among the world’s leading international tax advisors • Market leader for innovative, tax efficient structuring of business and transfer pricing advisers transactions and resolution of significant tax controversies globally (World Tax and World Transfer Pricing 2019) • With more than 300 tax lawyers and economists, our global tax advisory group helps clients address the complexities of international commerce and • Named among the world’s operational challenges, and avoid, manage and/or resolve tax disputes leading transfer pricing practice globally (World Transfer Pricing • Our global tax group works alongside our corporate venture and M&A teams 2019) and is positioned to assist clients in efficient tax structuring on venture • Los Angeles Firm of the Year investments and corporate acquisitions and disposals including: (International Tax Review 2018) • choice of entity to achieve the best tax and business objectives • Americas Consumer Products • utilization of tax attributes Tax Group of the Year (International Tax Review 2018) • structuring and implementing financings • Americas Private Equity Tax Deal • optimum structures for facilitating exit strategies of the Year (International Tax • tax-efficient compensation and incentive awards Review 2018) • Globally ranked in Chambers and Partners Ranked in Legal500

www.dlapiper.com 37 Intellectual Property & Technology Recognition • Named one of the Best of the Best IP Law Firms in IP • Recognized worldwide by legal directories and industry members as one of the Litigation – BTI Litigation leading groups of its kind Outlook • Our Intellectual Property and Technology (IPT) practice includes nearly 500 • Recognized as the second most active patent practice in dedicated lawyers in more than 24 countries, with particular strength in key the last ten years among global markets national firms by Law 360 • We are one of the most widely recognized providers of a full range of (2020) commercial, intellectual property, privacy, licensing, sourcing and technology • IAOP Global 100 – law services for leading businesses worldwide One of the World’s Best Outsourcing Advisors in 2020 • Our IPT practice works alongside our corporate venture and M&A teams and is (fifth year in a row) positioned to assist clients with a range of IP related matters including: • Highly ranked among the top • licensing, sale, acquisition and financing of IP rights firms nationwide as a leading IP and ITC practice in the US, • guidance on intellectual property-oriented M&A considerations; including and a leading IP firm globally the transfer of IP – Chambers USA and • technology and licensing matters that arise in the context of strategic Chambers Global (2020) ventures and other complex commercial transactions

www.dlapiper.com 38 Thank you

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