Enterprise Equity Venture Capital Investment General Partner of The AIB Seed Capital Fund Enterprise

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Enterprise Equity Venture CapitalInvestment
General Partnerof The AIB Seed Capital
FundEnterprise Acceleration Centre
Limerick8th Dec 2008
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AIB Seed Capital Fund

• 30 million fund
• Fund commenced 1st July 2007
• Initial investment size up to 500,000
• Total lifetime investment 1,500,000
• First Institutional Investor
• No Property, Retail, Leisure

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Frank Walsh Enterprise Equity Venture Capital

• Investment Banker San Fransicso
• Business Development Advisor CIS
• Consultant Dublin (Own Business)
• Venture Capitalist Dublin
• Custom Fit Golf Cork (Own Business)
• Venture Capitalist Cork

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Timeline

• Mutual Agreement to Proceed
• Agree Terms
• Term-sheet
• SSA other docs
• Closing

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Deal Metrics - Size

• How much money should you raise?
• As much as you need
• As much as you can
• Promoter participation
• Other participation

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Deal Metrics - Price

• How to value your early-stage company?
• Negotiated not derived
• Risk/Reward
• Dilution/Shareholding
• Market conditions
• ESOP

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Deal Metrics - Instrument

• Ordinary Shares
• Simple Unifying
• Preference/Preferred
• Liquidation preference double dip
• Anti-dilution
• Ratchet Performance based
• Voting/board representation
• Converts
• On Further Investment
• On Multiple of Future Revenue
• On Exit Valuation

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Term Sheet

• Commercial Issues
• Deal Economics
• Governance Issues
• Board Representation
• Keyman Insurance
• Employment Contracts
• Shareholder/Business Changes
• Good/Bad Leaver
• Cost Issues
• Management Fee
• Arrangement Fee
• Deal Fees
• Commitment Fee

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Legal Representation

• Experience
• Institutional investment
• Bandwidth
• Partner/solicitor
• Price
• Fixed
• Consistent with opposition
• Strict Instruction
• Commercial view

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The legal Process 5 pages to 500 pages

• SSA
• Articles
• Disclosure letter
• Legal Due Diligence
• Financial Due Diligence
• Employment contracts
• Third Party Contracts
• IP Evaluation

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Deal Gestation

• Only bad things happen here!
• Market conditions
• MAC
• Deal bound
• Business neglect
• Relationship deterioration
• Inappropriate financial activity

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Deal Gestation

• How to survive!
• Complete disclosure
• Speedy closing
• Commercial view
• Delegate deal responsibility
• Maintain focus on business

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Closing

• Lodge Check
• Celebrate your success

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Contact Information

• Frank Walsh
• Investment Executive
• Enterprise Equity
• National Software Centre
• Cork
• Tel [phone]
• 087-286-1182
• E-mail frank_at_enterpriseequity.ie