Ukrainian Technology Fund a unique opportunity for investments in emerging Silicon Valley of Eastern

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Attractiveness of Venture Investments in
Ukrainian High-Tech
Igor Semenov Partner TECHINVEST
21.10.2006 Kyiv, Ukraine
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Contents

• Attractiveness of VC investment
• High return of venture investments
• Venture investment as a driving force of
  High-Tech development
  
• Hidden potential of Ukrainian High-Tech
• Successful experience of Venture Capital Firm
  TECHINVEST
  
• TECHINVEST overview
• Venture ecosystem of TECHINVEST
• TECHINVEST investment portfolio

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Attractiveness of VC Investment

• What is Venture Capital Investments
• Building successful companies from zero and
  selling equity in them
  
• Super profit due to effective business
  development on the basis of IP (Intellectual
  Property)
  
• Average R?? of venture capital investments
  50-60 in the first 5 years
  
• In addition to financial investments venture
  capital investors also bring added value
  expertise, strategy, management building, access
  to the global marker players
• VC firm TECHINVEST has managed to provide its
  investment partners with a 2.5x return on their
  invested capital within two years.

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Attractiveness of VC Investment

• Companies which grew from zero to world leaders
• due to venture investors
• AOL
• Apple
• Cisco
• Compaq
• e-Bay
• Google
• HP
• Intel
• Microsoft
• Sun Microsystems
• Yahoo!

Venture capitalists are revolutionists of the
present! (Pitch Johnson, Asset Manageme
nt Company)

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Attractiveness of VC Investment

• Examples of Successful VC investments into FSU
  countries
  
• Draper Fisher Jurvetson (US) invested 2 million
  into Parametric Technologies (on the basis of
  Russian technology) Revenue from its further 100
  sale 175 times exceeded the size of investment!
• Current market price on NASDAQ over 3 bln.
  
  
• Sequoai Ventures (US-Israel) invested 12 million
  into Google (on the basis of Russian
  algorithms), Current market price of Google
  on NASDAQ over 100 bn.
• Blue Ventures (US-Finland) invested in Pay Pal
  (based on Ukrainain algorithms)
  
• In 2002 Pay Pal was sold to eBay for 1,5
  bln.
  
• Tim Draper, founder of Draper Fisher Jurvetson,
  invested 19 mil in Skype (on the basis of
  Baltic technologies and business-ideas)In 2005
  sold to eBay for 4,1 Bln
• TECHINVEST invested into the establishment of an
  international company United Software
  Corporation (USC) Revenue from selling the
  Companys share 4 times exceeded the size of
  investment.

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Attractiveness of VC Investment

• Scientific and technical heritage of former
  Soviet Union
  
• and Ukrainian High-Tech growth potential
• Over 30 of RD in former Soviet Union
• More than 50 years of successful history of
  computer science
  
• Ukraine is also competitive in Aerospace,
  Radio-electronics, machine-building, Energy,
  Advanced materials and metallurgy, Life sciences
  etc.
• Thousands of private and state RD institutions
  and technology companies.
  
• 1,500 RD institutions
• 400 Universities with over 2 Mil. students
• Number of students per 10,000 of the population
  is more than in Japan, Germany and Great Britain
  
• 20,000 researchers with scientific degrees
  (PhDs)
  
• 75,000 researchers without scientific degrees

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Successful experience of VC Firm TECHINVEST

• VC firm TECHINVEST is a pioneer of VC business in
  Ukraine
  
• TECHINVEST attracts financial resources of its
  partners and invests in international companies
  established on the basis of promising Ukrainian
  technology projects. TECHINVEST becomes a
  co-owner of the invested companies and manages
  stakes of its partners
• TECHINVEST achievements
• Managed to provide its investment partners with a
  2.5x return on their invested capital within two
  years.
  
• Recognized by representatives of leading
  international technology companies and funds.
  
• Draper Fisher Jurvetson and TECHINVEST are
  working on establishing the first Ukrainian
  high-tech venture fund DFJ Techinvest
  

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Successful experience of VC Firm TECHINVEST

• TECHINVEST ecosystem for identification, business
  incubation
  
• and investment of venture business projects
• TECHINVEST (www.techinvest.com.ua)
• Ukrainian High-Tech Competition(www.vc-ukraine.bi
  z) Transparent selection of promising projects
  for VC investments
  
• Center for Innivations Development
  (www.cid.kiev.ua) Technology business-
  incubator
  
• Technology Venture fund DFJ-Techinvest
  (www.dfj.com)
  
• Being established by Draper Fisher Jurvetson and
  TECHINVEST
  
• Annual road-shows in the US, including Silicon
  Valley Open Doors investment conference
  
• SVOD brings dozens of high-tech innovators from
  Ukraine and CIS countries to the U.S. sources of
  venture capital
  
• SVOD-2005 recognized as on of the 10 most
  important events of the year for Ukraine by
  Zerkalo Nedeli weekly
  

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Successful experience of VC Firm TECHINVEST

• International Experts Panel of TECHINVEST, which
  evaluates technology business projects
  
• Asset Management Company
• CSK Venture Capital
• Draper Fisher Juvertson
• Harris Harris Group
• Fourth Venture Group
• IBM VC Group
• Intel Capital
• Pitango Venture Capital
• Vision Capital
• Experts of other international VC firms,
  technology companies and organizations

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Successful experience of VC Firm TECHINVEST

• TECHINVEST Portfolio Companies
• United Software Corporation (www.uscglobal.com)
• United Software corporation (USC) is a global IT
  services
  
• and technologies provider. USC services
• Setting-up and running Dedicated Development
  Centers (DDCs)
  
• Contract RD
• USC is the only Ukrainian company holding IBM
  Approved Vendor status and performing RD for
  IBMs T.J. Watson Research Center.
  
• APowerCap Technologies (www.apowercap.com)
• APowerCap Technologies (APCT) develops
  supercapacitors on the basis of proprietary IP.
  
• The technology, which is 2 times better than its
  competitors, was developed by
  
• a group of researchers from the Ukrainian Academy
  of Science.
  
• APCT Supercapacitors can improve efficiency of
• motor vehicles
• consumer electronics
• energy generation and industrial power quality
  applications
  

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Thank you for your attention!
www.techinvest.com.ua 19-21,Frunze Str Kyiv,
04080, Ukraine Tel [phone] Fax 380
44 569 5679