Intel Capital Investing in Global

Innovation

Investing in Tech Startups in CEE

Igor Taber Investment Director

Intel Capital Russia CIS

11 Oct 2013

Global Investment Footprint

$10.8 billion+ in 1276 Companies across 54 Countries

Intel Offices and Intel Capital

Invested

Intel Capital Invested

$500m China Technology Fund II

$250m India Technology Fund

$50m Brazil Technology Fund

$50m Middle East and Turkey Fund

Intel Capital is a stage agnostic, long term, active TMT investor

Intel Capital Facts in CEE/Russia(CIS)

Number of

Investments:

Last Two Years:

First Investment: Exits:

28/13

9 deals

1999/2002 14/4

50% of capital

Capital Deployed:

Intel Capital is one of the largest and most

active VC investors in CEE

Investing in CEE

WRONG RIGHT

CONSENSUS

NO CONSENSUS

?

√

Key Things to Consider

• Deal Flow

• Cash

• Board

• Add Value

• Management

• Local vs Global

Deal Flow

• Quality/proprietary deal flow is the KEY

• Few companies everyone knows –

• Expensive

• Hype vs Reality

• A lots of capital

• Many companies no one knows

• Usually bootstrapped and profitable and founder managed

• Hard to effectively communicate with investors/pitch

• Governance is a challenge

• Seed vs Series A – no clear line

• Local presence is essential

Cash availability

• Growth comes with cash availability

• Follow-on cash is hard”ER” to get

• Only 8 growth/expansion deals in Q2

• Ensure longer runways vs optimizing for

dilution

• Lack of cash will lead investors to unnatural

decision making

• Co-invest with parties that are able to

continue funding the business plan

Active Board Participation • Take board seats; drive for balanced

board/decision making

• Boards in CEE often lack

• Strategic vision

• Financial acumen

• Founders often lack effective board experience

• Don’t try to run the business

• Independents

• Mixed bag

• Window Dressing vs Value Add

• No to “professional board members”

• Yes to Operators who can add value to the CEO

Value Add • Know when to Lean in/Lean back

• Introductions

• Ex: Intel Technology Days; Intel Global

Summit; other port-cos

• Future rounds/Exits

• Exit opportunities are limited (for now). #1

player in the segment will generate premium

• Just like “tomatos”

• Brand name investors are key

9

Management/Founders

• Evaluate/benchmark vis-à-vis local market and not

the world (unless competing globally)

• Exit alignment

• Serious shortage of management talent –

• don’t assume you can easily replace founder CEO

post investment – VERY hard to do

• If you don’t think current management can run the

company for next 3 years – don’t invest

• However, make tough decisions sooner rather

then later

1

0

Think Globally, Act Locally!

• Only consider GO Global (US), when:

• You are in enterprise/ B2B segment or you reached

$50M in revenue in B2C and you are not in Consumer

Internet

• You are able to attract talent in US that

• PERFECT cultural fit between him/her and local team.

• Preferably as VP of Sales and Marketing (not a CEO)

• Ideally founders (including technical) are able to move

• No language barriers with local team

• Clearly differentiated/disruptive solution (cost base

is not a differentiator)

• Otherwise – focus, focus, focus! 1

1

About Intel Capital

Consistent Investor

2012

IPOS 7

Acquired 28

Deals

Historical

1,276

B $10.8

Countries

54

37

IPOS 201

Acquired 317 % Dollars

Outside N. America

New Deals

Outside N.America 32

57 % Dollars

Outside N. America

* Number Includes New and Follow-on Deals Data as of Dec. 30, 2012

$352 M

*Other marks and brands are property of their respective owners

2012 Exits

35 portfolio companies exited in 2012: 28 via M&A & 7 via IPOs

Supporting the portfolio

• Work with the Intel business units to get on stage demos for:

• Intel events such as IDF (Intel Developer Forum)

• External events with Intel presence: such as CES (Las Vegas),

Computex (Taipei), MWC (Barcelona), E3 (Electronic Entertainment

Expo, LA), CEBIT

• Various chairs of working groups

• Invite to Intel Capital events such as:

• Silicon Valley VC events

• Consumer Board of Advisor meeting

• Enterprise Board of Advisor meeting

• Intel Capital Global Summit

• Intel and Intel Capital Public Relations support

Supporting the portfolio - at a glance 4000 pieces of coverage for recent Global Summit

Unleashing the Power of Partnership

Regular, targeted meetings between Intel Capital portfolio companies

and the right decision makers drawn from Intel’s relationships with

suppliers, partners and customers

• 3500+ engagements between portfolio companies & customers in 2012

• 1800+ Intel Capital Global Summit Connect meetings

• 76 Intel Capital Technology Days resulting in 1700+ introductions

*Other marks and brands are property of their respective owners

Intel Capital Technology Days

Connect with the right decision makers at the right companies

And an additional 100+

Global 2000 Brands…