Geoff Catherwood

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Venture Capital May 4, 2009 Business Development
Bank of Canada
Geoff Catherwood
www.bdc.ca/venturecapital
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Overview

• BDC Venture Capital Structure
• Venture Capital Investment Parameters
• Venture Capital Investment Criteria
• Approaching a VC the Process
• VC Rules of Thumb

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BDC Venture Capital - Structure

• Main Fund - (600M)
• 160 Companies in portfolio across Canada
• Annually 100M in 90 companies.
• Fund Investments (150M)
• 18 VC Funds
• Annually 50M in 10 funds.
• People - 30 investment professionals with
  business and technology expertise.
• Vancouver (5), Calgary, Ottawa, Toronto Montreal

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BDC Venture Capital Investment Parameters

• Tech. Focused Life Science, Telecom, IT EEEM
• EEEM Energy, Environment, Electronics
  Materials (Cleantech)
• Previous EEEM Investments include Ballard, Creo
  Xantrex
• Investment Range, 500k to 3M with follow on
  investments (Up to 1M for Seed Investments)
• Long Term Perspective 3-7 year horizon
• Active on Board and Board Committees
• Syndicated Deals (part of 5-10M round)
• Lead Investor or Syndicate Partner

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VC Investment Criteria

• Ideal Candidate
• Private Technology-based Company
• Strong Management
• Strong Competitive Advantage
• Protected Intellectual Property
• Large Market with High-Growth Potential
• Sound Business Model
• Comprehensive Business Plan
• Reasonable Valuation
• Credible Route to Liquidity Event

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The Process Timing Considerations

• 1 Contact VC submit Exec Summary, BP, pitch
• 2 Preliminary Due Diligence site visits
• 3 Detailed DD (expert reviews if required)
• 4 Negotiate sign term sheet
• 5 VCs obtain internal authorization
• 6 Legal documentation
• 7 Closing and cheque disbursement
• Note This process typically takes 4 to 12 months!

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VC Industry Rules of Thumb

• Out of 80-100 approaches per year
• 20 will get a meeting to pitch
• 4 will get to detailed due diligence
• 2 will get to a term sheet
• 1 will receive funding
• Out of 10 VC Investments made
• 2 will fail in the short term
• 6 will become living dead or lifestyle
  companies
• 2 will become winners (returning gt5X-10X )

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Thank You
EEEM Tony Van Bommel (Van) tony.vanbommel_at_bdc.ca
Geoff Catherwood (Van) geoff.catherwood_at_bdc.ca
IT Andrew Lugsdin (Van) andrew.lugsdin_at_bdc.ca Li
feScience Brenda Irwin (Van) brenda.irwin_at_bdc.ca
Website www.bdc.ca/venturecapital