lewiathans seminar presentation by michael sonenshine … · lewiathans seminar presentation by...

LEWIATHANS SEMINAR

PRESENTATION BY MICHAEL SONENSHINE

13 November 2013

London: 16 High Holborn, London, WC1V 6BX l Prague: Klimentská 1216 / 46, 110 02, Praha 1

T: +44 20 8616 7311 F: +44 20 8616 7499 T: +420 222 191 008 F: +420 222 191 200

This publication has been prepared by Symfonie Capital, LLC (Symfonie) for information purposes only. It is not an offer or solicitation for the purchase or sale of any financial instrument. Reasonable care has been taken to ensure that the information contained herein is not untrue or misleading, but no representation is made as to its accuracy or completeness. This document is confidential and proprietary to Symfonie. Transmission or publication of this document without the express prior consent of Symfonie is strictly prohibited. Symfonie Capital reserves all legal rights in connection with the publication of this document. © Symfonie Capital 2013.

Contact Details

Michael SonenshineInvestment PrincipalSymfonie Capital

[email protected]

TelephoneLondon: +44 20 8616 7390

Prague: +420 222 191 200

Mobile: +420 724 260 952

AGENDA

• Selection criteria for Angels - what to look for in the next great opportunity

• Due Diligence - where are the skeletons?

• Valuation - how to share the fruits of success

• Deal Strucutre - what is win-win?

Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC 4

INVESTMENT PROCESS – RESEARCH DRIVEN

Deal EvaluationMeeting with managementComparison to threshold

investment criteria

Execution & MonitoringDocumentation of investment and legal

registrationRegular meetings with management.

We or our appointed representative joins corporate governing body

Due Diligence & StructuringBackground checks on management

Background checks on companyAudit company accounts

Negotiate investment terms and conditions

Deal ResearchReview company business planStudy competitive environment

Identify value-adding opportunities

Deal OriginationReferrals from network of

contacts

Deal ExitStrategic partnership

Trade saleIPO

Management buyoutBalance sheet refinancing

MISSION CRITICAL - KNOW WHERE YOU WANT TO GO!

Required rates of returnHolding periodSize of investmentClass of companies to invest in (e.g. – R&D, Startup, Early Stage, Turnaround)Scale and size of of businessSector, industry, productAsset class (e.g. debt, equity)Position in company (minority, strong minority, majority, founder, manager)

There are no right or wrong answers to these questions. But each has definite implications and each will play a critical role in defining the outcome.


PLAY FROM STRENGTH

According to a study done by Ewing Marion Kauffman Foundation and the Angel Capital Education Foundation success is linked to certain fundamentals:

•Research and Due Diligence - The exits where investors spent more than 40 hours doing due diligence (the top quartile) experienced a 7.1X multiple.

•Experience - Investment multiples were twice as high for investments in ventures connected to investors’ industry expertise.

•Active participation - In the data collected for this study, angel investors who interacted with the venture a couple of times per month spent time mentoring, coaching, consulting with and monitoring the companies in which they invest. These angel investors experienced an overall exit multiple of 3.7X in four years – i.e. 45% annual returns.

Source: Boeker & Wiltbrook, “Returns to Angel Investors in Groups”, 2007. Ewing Marion Kauffman Foundation, Angel Capital Education Foundation

PLAY WHERE YOU CAN WIN

Playing to Win, by Former Proctor & Gamble CEO A.G. Lafley

Headline PointsCompete in the products and sectors where you have the best chance of success

Choose markets where the playing field is level, where no particular competitor has an automatic advantage

Tailor the product to the local market

Step into the consumer’s shoes

The same principles can be applied in almost any situation.


KEY INVESTMENT CRITERIA

• We know the company, its key managers and shareholders

• We believe the business plan is achievable

• We understand the industry and the competitive environment

• We understand the product, production process and marketability

• We identify opportunities where we can add value through our involvement with the company

• Transparent ownership structure with investor protections

• Viable exit alternatives identified - at least 3X multiple within 5 years

FIRST INGREDIENTS – TALENT + IDEA

Invest in Good People

• The entrepreneur has a demonstrated understanding of the product and the industry in which he/she operates.

• The entrepreneur brings a set of skills

Invest in Good Ideas• The proposed product or service is readily marketable in the near term.• There is an identifiable, proven demand for the product or service.• The product or service has unique features and benefits that provide competitive

advantage versus similar products and services.• The product or service can be produced cost efficiently in small quantities.• The business is scaleable – it can be developed, and grown over time.

THINK PORTER

Competitive Strategy, by Michael Porter

THINK SWOT

• Strengths

• Weaknesses

• Opportunities

• Threats

DEFINE WHAT CAN AND CANNOT BE CONTROLLED

Internal factors - Focus on what is with your control and what is within the control of the company and the entreprenuer. -

Identify what can and cannot be changed

Identify the costs of making the changes

External factors – Neither you nor the entrepreneur can control these things. The best you can do is understand how they affect the business and what can be done to compensate.

Identify the costs of adapting to the external realities

Change what can be changed, accept what cannot be changed. You cannot control the wind, but you can decide how to set the sails and whether or not to get on the boat in the first place.

TEST THE IDEA

Discuss it with smart people

Bring in a marketing consultant

Ask potential customers

Look at the regulatory environment

Look at similar products

Read about the industry

Learn from the mistakes and successes of others

MORE KEYS TO SUCCESS

• Does the entrepreneur want the same things the Angel wants?

• The business plan includes putting in place the processes and company organisation that will attract additional capital or facilitate an exit strategy.

• A clearly identifiable roadmap to an exit be in place.

• Is the business can be saleable? - Trade sale, management buyout, private equity markets or IPO.

• Is the business monetisable – cash flows, cash flows cash flows! The business must be capable of generating profits at some point in time.

IS THERE A ZOPA?

ZONE OF POSSIBLE AGREEMENT

• Is the entrepreneur willing and able to provide for good corporate governance, fiscal transparency and legal protections for the investors?

• Is there a good chemistry between the Angel and the entreprenuer?

• Is there a common vission?

• Will the deal structure be fixed or floating?

DUE DILIGENCE – NOT JUST A FORMALITY!

• The company’s founders and key managers successfully pass due diligence and background checks.

• The company has no significant potential legal challenges to its property and intellectual capital.

• The company faces no significant legal or regulatory barriers to its business plan in the near term.

Scoring Model

Entrepreneur’s knowledgeAngel fund’s knowledgeMarketability, Time to Market, Proven demandCompetitive advantage, Product USPProduction efficiencies, Impact of technology on the productCapital intensity, Funding requirementsTime to break-even or sustainability, Time to profitabilityProfitabilityAbility of the Angel to add value, Requirement for the involvement of the AngelRoadmap to exit, SellabilityPotential returnVolatility of returnCorrelation to project portfolio

Give each item a quantitative score and choose the highest scoring projects!Factors can be weighted – i.e 0.8 = not so important, 1 = normal importance, 1.2 = highly

importantThere is no right or wrong answer here – the purpose is to put a framework around your

thinking and avoid getting hung up on any one factor.

Due Diligence – Where are the Pitfalls

Due Diligence is not a formality

Invest in the due diligence process

KNOW THE BUSINESS

Basic company/industry research – know the product, know the idea, know the industry.

Marketing strategy assessment

Regulatory checks

KNOW THE COMPANY

Corporate register

Certificate of good standing

Articles of Association

Memorandum of Association

Shareholder register

Tax compliance

Land registry

Court records

Financial audit

KNOW THE ENTREPRENEUR AND THE MANAGEMENT

Resumes/biographiesCriminal recordTax complianceDebt registerValidity of licensesPersonal referencesBusiness referencesInternet searchInsurance

The scale of due diligence should be proportional to the size of investment and the risk of loss.

Beware the fat tail – the probability of a problem might be small, but the cost of the problem can jeopardize the entire investment and more.

VALUATION TECHNIQUES

• DCF

• MULTIPLES

• TRANSACTION VALUES

• ASSET-BASED VALUE

DCF – KEY CONCERNS

• Very sensitive to the terminal value?

• What discount rate to choose?

• Two stage model or one-stage model?

• Probability of outcomes

• Static noise

• Forecasting error

MULTIPLES

• EV/Sales

• EV/EBITDA

• EV/Net Profit

• EV/Customer, EV/KPI

Key ConcernsIs the benchmark applicable?

What will the transaction environment be?

Is the financial model right?

Will the financial model change?

TRANSACTION VALUES

Always based on multiples

Based on real-world experience

Subject to mis-interpretation

Subject to financial model

Transaction environment may not be the same in the future

Specific circumstances surrounding the transaction need to be taken into account

ASSET BASED VALUE

Focus is on company’s assets, rather than company’s cash flows.

Particularly used where company has real estate and other marketable assets.

Company financials, company business model must still be taken into account.

Quality of assets must be considered.

Subect to changes in market environment.

DEAL STRUCTURES

• Preferred shares

• Common shares

• Warrants

• Convertible securities

STRUCTURE TOOL – THE OWNERSHIP MATRIX

Key Inputs NeededProjected financialsProjected holding periodCapital investedRange of multiples

KEY QUESTION – HOW DO TO SHARE THE PIE?

Matrix Scheme ROCIEarnings 15 30 45 60 75 90 105 120 135 150Equity Value 225 450 675 900 1,125 1,350 1,575 1,800 2,025 2,250 Ownership Levels

5% -68% -36% -4% 29% 61% 93% 125% 157% 189% 221%10% -36% 29% 93% 157% 221% 286% 350% 414% 479% 543%15% -4% 93% 189% 286% 382% 479% 575% 671% 768% 864%20% 29% 157% 286% 414% 543% 671% 800% 929% 1057% 1186%25% 61% 221% 382% 543% 704% 864% 1025% 1186% 1346% 1507%30% 93% 286% 479% 671% 864% 1057% 1250% 1443% 1636% 1829%35% 125% 350% 575% 800% 1025% 1250% 1475% 1700% 1925% 2150%40% 157% 414% 671% 929% 1186% 1443% 1700% 1957% 2214% 2471%45% 189% 479% 768% 1057% 1346% 1636% 1925% 2214% 2504% 2793%50% 221% 543% 864% 1186% 1507% 1829% 2150% 2471% 2793% 3114%55% 254% 607% 961% 1314% 1668% 2021% 2375% 2729% 3082% 3436%60% 286% 671% 1057% 1443% 1829% 2214% 2600% 2986% 3371% 3757%65% 318% 736% 1154% 1571% 1989% 2407% 2825% 3243% 3661% 4079%70% 350% 800% 1250% 1700% 2150% 2600% 3050% 3500% 3950% 4400%75% 382% 864% 1346% 1829% 2311% 2793% 3275% 3757% 4239% 4721%80% 414% 929% 1443% 1957% 2471% 2986% 3500% 4014% 4529% 5043%85% 446% 993% 1539% 2086% 2632% 3179% 3725% 4271% 4818% 5364%90% 479% 1057% 1636% 2214% 2793% 3371% 3950% 4529% 5107% 5686%95% 511% 1121% 1732% 2343% 2954% 3564% 4175% 4786% 5396% 6007%

100% 543% 1186% 1829% 2471% 3114% 3757% 4400% 5043% 5686% 6329%

EXIT MULTIPLE MATRIX

Matrix Scheme EXIT MltEarnings 15 30 45 60 75 90 105 120 135 150Equity Value 225 450 675 900 1125 1350 1575 1800 2025 2250Ownership Levels

5% 0.3 0.6 1.0 1.3 1.6 1.9 2.3 2.6 2.9 3.210% 0.6 1.3 1.9 2.6 3.2 3.9 4.5 5.1 5.8 6.415% 1.0 1.9 2.9 3.9 4.8 5.8 6.8 7.7 8.7 9.620% 1.3 2.6 3.9 5.1 6.4 7.7 9.0 10.3 11.6 12.925% 1.6 3.2 4.8 6.4 8.0 9.6 11.3 12.9 14.5 16.130% 1.9 3.9 5.8 7.7 9.6 11.6 13.5 15.4 17.4 19.335% 2.3 4.5 6.8 9.0 11.3 13.5 15.8 18.0 20.3 22.540% 2.6 5.1 7.7 10.3 12.9 15.4 18.0 20.6 23.1 25.745% 2.9 5.8 8.7 11.6 14.5 17.4 20.3 23.1 26.0 28.950% 3.2 6.4 9.6 12.9 16.1 19.3 22.5 25.7 28.9 32.155% 3.5 7.1 10.6 14.1 17.7 21.2 24.8 28.3 31.8 35.460% 3.9 7.7 11.6 15.4 19.3 23.1 27.0 30.9 34.7 38.665% 4.2 8.4 12.5 16.7 20.9 25.1 29.3 33.4 37.6 41.870% 4.5 9.0 13.5 18.0 22.5 27.0 31.5 36.0 40.5 45.075% 4.8 9.6 14.5 19.3 24.1 28.9 33.8 38.6 43.4 48.280% 5.1 10.3 15.4 20.6 25.7 30.9 36.0 41.1 46.3 51.485% 5.5 10.9 16.4 21.9 27.3 32.8 38.3 43.7 49.2 54.690% 5.8 11.6 17.4 23.1 28.9 34.7 40.5 46.3 52.1 57.995% 6.1 12.2 18.3 24.4 30.5 36.6 42.8 48.9 55.0 61.1

100% 6.4 12.9 19.3 25.7 32.1 38.6 45.0 51.4 57.9 64.3

ANNUAL RETURN MATRIX

Matrix Scheme Ann. RtnEarnings 15 30 45 60 75 90 105 120 135 150Equity Value 225 450 675 900 1125 1350 1575 1800 2025 2250Ownership Levels

5% -25% -10% -1% 6% 13% 18% 22% 27% 30% 34%10% -10% 6% 18% 27% 34% 40% 46% 51% 55% 59%15% -1% 18% 30% 40% 48% 55% 61% 67% 72% 76%20% 6% 27% 40% 51% 59% 67% 73% 79% 84% 89%25% 13% 34% 48% 59% 68% 76% 83% 89% 95% 100%30% 18% 40% 55% 67% 76% 84% 92% 98% 104% 110%35% 22% 46% 61% 73% 83% 92% 99% 106% 112% 118%40% 27% 51% 67% 79% 89% 98% 106% 113% 119% 125%45% 30% 55% 72% 84% 95% 104% 112% 119% 126% 132%50% 34% 59% 76% 89% 100% 110% 118% 125% 132% 138%55% 37% 63% 80% 94% 105% 115% 123% 131% 138% 144%60% 40% 67% 84% 98% 110% 119% 128% 136% 143% 149%65% 43% 70% 88% 102% 114% 124% 133% 140% 148% 154%70% 46% 73% 92% 106% 118% 128% 137% 145% 152% 159%75% 48% 76% 95% 110% 122% 132% 141% 149% 157% 164%80% 51% 79% 98% 113% 125% 136% 145% 153% 161% 168%85% 53% 82% 101% 116% 129% 139% 149% 157% 165% 172%90% 55% 84% 104% 119% 132% 143% 152% 161% 169% 176%95% 57% 87% 107% 122% 135% 146% 156% 164% 172% 180%

100% 59% 89% 110% 125% 138% 149% 159% 168% 176% 183%

STRUCTURE TOOL - VARIABLE OWNERSHIP

Round 115%

Management earn-in25%

Management incentive

25%

Founders10%

Seed25%

Seed investors have preferential rights to purchase in Round 1Management earn-in is over 36 months, beginning with month 19Management incentive is a function of profits and returns to seed and round 1 shareholders

KEY TERMS IN THE TERM SHEET

• Type of investment to be made (e.g. shares, loan).

• Balance sheet or capitalisation table before and after the transaction

• Timing of investment

• Liquidation preference, if any

• Dividend rights, if any

• Anti-dilution provision

• Pre-emption rights

• Corporate governance

CORPORATE GOVERNANCE

• Board seat for investor

• Right of investor to appoint members of management

• Ability of company to issue additional shares

• Ability of company to take on more debt

• Ability of company to make merger/acquisition

• Shareholder right

• TAG/DRAG

• Methods to resolve difference

CORPORATE GOVERNANCE MECHANISMS

• Oridinary votes vs. special resolutions

• Thresholds of shareholder approval for various events

• Rotation of company directors

• Shareholder approvals vs. board authority

• Audits

• Dual control over cash

London: 16 High Holborn, London, WC1V 6BX Prague: Klimentská 1216 / 46, 110 02, Praha 1

T: +44 20 8616 7311 F: +44 20 8616 7499 T: +420 222 191 008 F: +420 222 191 200

This publication has been prepared by Symfonie Capital, LLC (Symfonie) for information purposes only. It is not an offer or solicitation for the purchase or sale of any financial instrument. Reasonable care has been taken to ensure that the information contained herein is not untrue or misleading, but no representation is made as to its accuracy or completeness. This document is confidential and proprietary to Symfonie. Transmission or publication of this document without the express prior consent of Symfonie is strictly prohibited. Symfonie Capital reserves all legal rights in connection with the publication of this document. © Symfonie Capital 2013.

SYMFONIE ANGEL VENTURES, LPA private equity fund

PRAGUE CLASS 2013 INTERESTSINVESTMENT PRINCIPALS

Michael Pajr, Partner, CQK Holding, a.s.Jitka Rombová, CQK Invest, a.s.

Pavel Kohout, Partners Financial Services, a.s.Michael Sonenshine, Symfonie Capital


Objective & Structure

Generate net investment returns of at least 35% per annum

2% management fee, 15% of realized performance over and above 8% per annum hurdle

Exit investments in 3 – 5 years at exit multiples of at least 3X initial investment

Make direct investments in start-up or early stage growth companies

Add value by working closely with management

Prague Partners Class 2013 – will invest up to CZK 100 mn in 8-15 companies

Additional classes planned as pipeline grows

US Limited Partnership – non-taxable for non-US residents


Proven Success from Applying Fundamentals

Symfonie Angel Ventures, LP seeks to identify and invest in start-up and early stage companies, mainly in Central and Eastern Europe. Our Prague based team is uniquely positioned to find good companies, know the management well and work with them to add value. We want to exit within five years and with at least 4X what we invest.

According to a study done by Ewing Marion Kauffman Foundation and the Angel Capital Education Foundation success is linked to certain fundamentals:

•Research and Due Diligence - The exits where investors spent more than 40 hours doing due diligence (the top quartile) experienced a 7.1X multiple.

•Experience - Investment multiples were twice as high for investments in ventures connected to investors’ industry expertise.

•Active participation - In the data collected for this study, angel investors who interacted with the venture a couple of times per month spent time mentoring, coaching, consulting with and monitoring the companies in which they invest. These angel investors experienced an overall exit multiple of 3.7X in four years – i.e. 45% annual returns.

Source: Boeker & Wiltbrook, “Returns to Angel Investors in Groups”, 2007. Ewing Marion Kauffman Foundation, Angel Capital Education Foundation


Prague Class Investment Committee

Pavel Kohout• Twenty years experience in economic analysis and investment management• Director of Strategy at Partners Financial Services, a.s., a leading Czech financial advisory firm• Author of several books on economics• Member of Czech National Economics Advisory Board• Member, Expert Panel of Advisors to Czech Ministry of Finance

Michal Pajr, MSc• Ten years experience managing internet technology companies• Partner, CQK, investing in and advising startup and early stage technology companies• Partner, GEM System, software development and system integrations• Solution principal and business analyst in many ICT oriented projects since 2002

Jitka Rombova• More than 20 years professional experience in managerial finance and business development• Partner, CQK Invest, providing financial and business support to innovative startup companies• 10 years experience in senior management positions in HBO Europe, promoted to CFO• MBA, University of Pittsburgh, Diploma, University of Chemical Technology, Prague

Michal Sonenshine, CFA• More than twenty years experience in finance and investment management• Track record of success managing portfolios of emerging market and high yield bonds since 2003• Five years experience as senior credit analyst at Credit Suisse First Boston and ING Bank• Five years experience as Central and East European equity analyst at ING Bank• Started and ran ING’s Investment Management business in Prague

A Winning Team of Partners

CQK•Track record of success in entrepreneurship•Experience developing early stage and startup companies•Expertise in IT sector•Network of contacts for pipeline and partner companies

Pavel Kohout•Experience in enterprise development and management•Forward thinking economist and financial analyst•Network of contacts for pipeline and partner companies•Experience evaluating companies and business strategies

Symfonie Capital•More than 20 years experience analysing companies•One of Europe’s most senior high yield credit analysts•Network of institutional investors and family offices•Specialist in structuring investment vehicles•Well developed disciplined investment and risk management process

We’ve assembled a team of motivated investment professionals ready to identify opportunities and add value to generate investment returns

Private and conditional. Unauthorised distribution strictly prohibited. ©2013 Symfonie Capital LLC


Foundations for Successful Investing

Research – we take significant amount of time to understand the companies in which in invest and the businesses in which the operate.

Knowing the industry – we focus on investments in industries we know well and fit within our professional experience.

Know the company – we focus on companies where we and our partners know the company and its management. Our deals come to us by referral. We build and develop trust and confidence so that we understand the company, its challenges and potentials.

Be involved – we work closely with the owners and management of the companies we invest in. We meet them and their board members regularly. We help them with projects in finance, marketing, business analysis, business planning and execution. We help them find competent professionals and staff members who add value.


Investment Process – Research Driven

Deal EvaluationMeeting with managementComparison to threshold

investment criteria

Execution & MonitoringDocumentation of investment and legal

registrationRegular meetings with management.

We or our appointed representative joins corporate governing body

Due Diligence & StructuringBackground checks on management

Background checks on companyAudit company accounts

Negotiate investment terms and conditions

Deal ResearchReview company business planStudy competitive environment

Identify value-adding opportunities

Deal OriginationReferrals from network of

contacts

Deal ExitStrategic partnership

Trade saleIPO

Management buyoutBalance sheet refinancing


Key Investment Criteria

We know the company, its key managers and shareholders

We believe the business plan is achievable

We understand the industry and the competitive environment

We understand the product, production process and marketability

We identify opportunities where we can add value through our involvement with the company

Transparent ownership structure with investor protections

Viable exit alternatives identified - at least 3X multiple within 5 years


Project Pipeline – Advanced Materials

Investment Thesis• Opportunity to produce and sell nano particle coatings and additives can be exploited.

Company Summary• Company developed and patented coatings that when applied to most surfaces, such as building facades and interior walls cleans the surface of pollution and bacteria and reduces need for further frequent cleaning and painting.

• Commercial applications in construction, hospitals and water treatment.

Investment Plan & Value Added• We have developed a business plan to manufacture and distribute coatings.

• Post-closing we plan to work with management to establish business infrastructure and execute the plan.

Investment Size and Anticipated Return• Potential Angel Fund Investment up to CZK 15 mn. Holding period 3-5 years with potential exit multiple at least 3X investment.

Source: Symfonie Capital. The above description is illustrative. Project terms are subject to change. There is no guarantee or assurance an investment by the Partnership will be made or that the targeted return will be achieved.


Project Pipeline – Consumer and Business Finance

Investment Thesis• Changing risk and capital requirements in the banking industry have opened opportunities for non-bank companies to intermediate consumer and business loans via Peer to Peer lending.

• Peer to Peer lending is one of the fastest growing areas of finance. Company Summary• Start-up company developing peer to peer intermediation platform.

Investment Plan & Value Added• The Angel Fund would invest with management and other investors to develop the company and launch operations.

•We bring expertise in consumer finance, credit analysis, software, technology and capital market product development.

Investment Size and Anticipated Return• Potential Angel Fund investment up to CZK 15 mn. Holding period 3-5 years with potential exit multiple at least 3X investment.

Source: Symfonie Capital. The above description is illustrative. Project terms are subject to change. There is no guarantee or assurance an investment by the Partnership will be made or that the targeted return will be achieved.


Project Pipeline - ELON – Medical Device Sector

Investment Thesis• Niche marketing opportunities in the medical devices sector can be exploited profitably with cost-effective products developed from technological advances.

Company Summary• Company has licensed production of a medical device designed for people who suffer deterioration of the retina connected with diabetes. There are an estimated 500,000 such people in the Czech Republic and surrounding countries and the company has licensed the Czech and Central European markets.

• The device has recently been approved for use in the Czech Republic. The company is working on getting the device approved in Poland, Slovakia and Hungary.

Investment Plan & Value Added• Angel Fund plans to work with management to develop business plan, install sound financial control systems and evaluate growth opportunities.

Investment Size and Anticipated Return• Potential Angel Fund investment up to CZK 5 mn. Holding period 3-5 years with potential exit multiple at least 4X investment.Source: Symfonie Capital. The above description is illustrative. Project terms are subject to change. There is no guarantee or assurance an investment by the Partnership will be made or that the targeted return will be achieved.


Project Pipeline – Renegade - Internet Video Solutions

Investment Thesis• Broadcasters and content providers need technological solutions to distribute information and programming via the internet, web-based TVs and mobile phones. •Technology has dramatically lowered the cost of producing video and audio programming and has created a surge in demand for software capable of managing and distributing video content.• Internet Protocol Television (IPTV) industry revenues are expected to triple over the next five years. •Company Summary• Renegade’s management has proven success developing and supplying of video-on-demand solutions to major global broadcasters and content providers.• Renegade is developing a suite of products and plans to deliver a Software as a Service (SaaS) Internet TV platform that will significantly lower the startup and operating costs for any company to deliver audio / video content to the full range of internet-ready devices.Investment Plan and Value Added• The Angel Fund would work with management to execute and develop the business plan, identify new products and new market segments and raise further capital as needed.Investment Size and Anticipated Return• Potential Angel Fund investment up to CZK 15 mn, along with management and other investors. Proceeds will fund the company while it develops its markets. Exit multiple 5X over five years is targeted. Source: Symfonie Capital. The above description is illustrative. Project terms are subject to change. There is no guarantee or assurance an investment by the Partnership will be made or that the targeted return will be achieved.


Fund Structure and Governance

Investment in a portfolio of 8-15 companies

Fund passes through to investors dividend income received and proceeds from sale of investments

Professional fund accounting - (www.liccar.com)

Quarterly performance updates

Annual fund report

Annual Fund audit and report

Investment advisor regulated by the US SEC

Fund registered with the US SEC


Disclaimer

This document has been prepared by Symfonie Capital Investment Management LLC (“Symfonie Capital”) for persons reasonably believed by Symfonie Capital to be persons of the categories to whom Symfonie Capital are permitted to communicate financial promotions. This document does not constitute or form part of any offer or invitation to sell, or the solicitation of an offer to subscribe or purchase any investment. Symfonie Capital believes that the information it provides is accurate as at the date of publication, but no warranty of its accuracy or completeness is given and no liability in respect of errors or omissions is accepted by Symfonie Capital or any partner or employee of Symfonie Capital. Past performance is not necessarily a guide to future performance.

This presentation is for illustration and discussion purposes only and is not intended to be, neither should it be construed or used as, financial, legal, tax or investment advice nor an offer to sell, nor a solicitation of any offer to buy, an interest in any of the funds managed by Symfonie Capital (the “Funds”). None of the Funds have shares registered under the U.S. Securities Act of 1933, as amended. None of the Funds will be registered under the U.S. Investment Company Act of 1940, as amended. Any offer or solicitation of an investment in any of the Funds may be made only by delivery of a respective fund’s Confidential Offering Memorandum to qualified prospective investors.

This presentation is as of the date indicated, is not complete, and does not contain certain material information about the Funds, including important disclosures and risk factors associated with an investment in any of the Funds.

Any indications of interest from prospective investors in response to this material involves no obligation or commitment of any kind. Subscriptions can be made only on the basis of a Confidential Offering Memorandum to qualified investors. The investment objectives and methods summarized in this document represent our current focus and intentions.

There is no assurance that Symfonie Capital will achieve its objectives or that its investment process or risk management will be successful. Investors may lose money. No representation is made that any of the Funds will or are likely to achieve their respective objectives or that any investor will or is likely to achieve results comparable to any that may be shown or will make any profit at all or will be able to avoid incurring substantial losses. Past performance is no guarantee of future results.

This presentation does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it. Before making any investment, you should thoroughly review the particular fund’s Confidential Offering Memorandum with your financial and tax advisor to determine whether an investment in the fund is suitable for you in light of your financial situation.

This presentation is subject to revision and updating. Certain information has been provided by third-party sources and, although believed to be reliable, it has not been independently verified and its accuracy or completeness cannot be guaranteed. This presentation is confidential, is intended only for the person to whom it has been delivered and under no circumstance may a copy be shown, copied, transmitted, or otherwise given to any person other than the authorized recipient. Symfonie Capital is solely responsible for the content herein.

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