1. *connectedthinking Comerica/Global Software Event Q4 2003 and Year End Review Steve Bengston Emerging Company Services 650 281 9843 Steve.bengston@us.pwc.com

2. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 1 MoneyTree Total Investments Q1 1997 – Q4 2003 ($ in billions) 1997 1998 1999 2000 2001 # of Deals 2002 2003 768747 852 916 923 1,444 2,151 1,975 1,306 814676 1,048 650685 769 901 924 1,003 1,3371,904 2,161 1,795 1,258 988 721 824 701 679

3. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 2 MoneyTree Total Investments 1980 –2003 ($ in billions) # of Deals 461 789 1,138 1,413 1,485 1,391 1,401 1,583 1,479 1,507 1,421 1,360 1,234 1,163 1,874 2,6123,695 5,608 1,208 3,185 8,082 4,600 3,035 2,715 Annual Venture Capital Investments 1980 to 2003

4. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 3 Corporate Venture Capital Investments - 1995 - 2003 ($ in billions) # of Deals 217 353 5261,3222,149 1,003415 128 553

5. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 4 THE WORLD VIEW – Top 20 Countries Based on Investment (2001 Rankings in Parentheses) Note: There is no published data on Asia Pacific countries for 2002, therefore estimates from the AVCJ are shown

6. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 5 US $ Billion THE WORLD VIEW Top 20 Countries - Based on Investment Note: There is no published data on Asia Pacific countries for 2002, therefore estimates from the AVCJ are shown Country Ranking Investment Value Funds Raised Country Ranking Investment Value Funds Raised 1. USA62.6854.8911. Australia1.210.21 2. UK9.5813.4212. India1.050.16 3. France5.534.5413. Israel0.981.14 4. Italy2.481.8914. Spain0.92.60 5. Japan2.380.7215. Hong Kong0.750.55 6. Germany2.371.5516.Indonesia0.56N/A 7. South Korea1.950.3617. Finland0.430.68 8. Netherlands1.631.1318. South Africa0.370.08 9. Canada1.572.0719. China0.350.32 10. Sweden1.390.6120. Belgium0.340.12

7. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 6 THE WORLD VIEW – Top 20 Countries Based on Growth (CAGR 98-02) Only Countries with investments of at least $0.225 billion in 2002 are shown Note: There is no published data on Asia Pacific countries for 2002, therefore estimates from the AVCJ are shown

8. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 7 Texas $369 – 7% 37 Deals Silicon Valley $1,619 – 33% 183 Deals New England $660 – 13% 94 Deals Midwest $276.9 39 Deals South Central $41.3 2 Deals Northwest $167- 3% 32 Deals Sacramento/N. CA $50.5 6 Deals San Diego $165 – 3% 25 Deals Southeast $324 – 7% 68 Deals Southwest $45.2 14 Deals LA/Orange County $255 – 5% 34 Deals DC/Metroplex $209 – 4% 39 Deals NY Metro $388 – 8% 39 Deals Philadelphia Metro $149 – 3% 25 Deals North Central $64.4 15 Deals Q4 2003 Total Investments - $4,923 ($ in millions) Colorado $108 – 2% 19 Deals AK/HI/PR $8.0 1 Deal Upstate NY $24.6 7 Deals Investments by Region Q4 2003

9. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 8 Investments by Region Full-Year 2003 Full-Year 2003 Totals: $18,187 2,715 (15.1%) # of Deals % $ Change from 2002 761 387 184 167 154 231 140 155 102 70 106 77 73 54 27 13 9 4 1 (16.4%) (41.9%) (41.5%) 9.8% (26.9%) 11.8% (26.4%) (27.7%) (11.5%) (0.5%) (18.3%) (37.7%) 1.4% (9.3%) (6.9%) (15.5%) 19.2% NM (NM=Not Meaningful)

10. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 9 Investments by Region - Annual Percent of Total U.S. Investments Top U.S. Regions – 1998 to 2003 (% of Total Dollars) ‘98 ’00 ‘99 ’01 ‘02’03 ’99 ‘98 ’98‘99’00‘01‘02’03 ‘02’03‘01‘00’98‘99 ’02 ‘00 ’01 ‘03

11. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 10 Investments by Industry Q4 2003 # of Deals % Change in $ Amount from Q3 03 ($ in millions) Visit www.pwcmoneytree.com for Industry Definitions Q4 2003 Totals: $4,923 679 11.1% 90 173 61 58 46 41 20 37 26 24 20 15 22 13.7% 12.6% 55.2% 58.5% 1.5% 37.4% NM 1.9% (13.8%) (16.9%) (38.3%) (65.8%) (56.2%) 15 14 10 (7.0%) (67.6%) 27.2% NM 7 (NM=Not meaningful)

12. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 11 Investments by Industry Full-Year 2003 # of Deals % Change in $ Amount from 2002 ($ in millions) Visit www.pwcmoneytree.com for Industry Definitions Full-Year 2003 Total: $18,187 2,715 (15.1%) 718 301 259 180 211 141 148 121 113 116 105 70 62 (19.5%) 12.7% (26.3%) (7.1%) (27.7%) (21.0%) (37.1%) (18.8%) 4.1% (13.9%) (16.8%) (10.6%) 96.4% 51 59 44 16 (14.9%) (48.9%) (38.3%) NM (NM=Not meaningful)

13. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 12 Investments by Industry - Percent of Total U.S. Investments Top 5 Industries – 1998 to 2003 (% of Total Dollars) ‘99‘00‘01‘98‘02‘98‘00 ‘99 ‘01‘02 ‘98‘99 ‘02‘01‘00‘98’99‘00‘01‘02 ‘98‘99‘00‘01‘02 ‘03

14. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 13 Investments by Financing Sequence - Q4 2003 # of Deals % Change in $ Amount from Q3 03 ($ in millions) Q4 2003 Totals: $4,923 679 11.1% 185 112 104 163 115 15.9% 32.0% 34.1% (16.2%) (4.1%)

15. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 14 Investments by Financing Sequence - Full-Year 2003 # of Deals % Change in $ Amount from 2002 ($ in millions) Full-Year 2003 Total: $18,187 2,715 (15.1%) 730 449 624 535 377 (2.4%) (21.1%) (21.3%) (5.1%) (24.4%)

16. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 15 First Sequence Financing - Percent of Total U.S. Investments

17. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 16 $ in Billions First Sequence Financing - Amount and % of Total U.S. Investments

18. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 17 First Sequence Financing - Deals and % of Total U.S. Deals

19. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 18 Median Deal Size vs. Mean Deal Size - Quarterly Total U.S. Investments ($ in millions)

20. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 19 Q4 2003 - Most Active Venture Investors Venture Capital FirmLocationTotal Deals Polaris Venture PartnersWaltham, MA 21 Mobius Venture CapitalPalo Alto, CA18 New Enterprise AssociatesBaltimore, MD17 Sevin Rosen FundsDallas, TX16 Menlo VenturesMenlo Park, CA14 Draper Fisher JurvetsonRedwood City, CA13 InterWest PartnersMenlo Park, CA12 St. Paul Venture CapitalEden Prairie, MN13 Versant VenturesMenlo Park, CA12 Village VenturesWilliamstown, MA12 Warburg PincusNew York, NY12

21. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 20 Full-Year 2003 – Most Active Venture Investors Venture Capital FirmLocationTotal Deals New Enterprise AssociatesBaltimore, MD73 Draper Fisher JurvetsonRedwood City, CA52 Sevin Rosen FundsDallas. TX50 Polaris Venture PartnersMenlo Park, CA47 U.S. Venture PartnersSanta Clara, CA43 Intel CapitalPalo Alto, CA43 Mobius Venture CapitalAustin, TX42 Warburg PincusNew York, NY42 Venrock AssociatesNew York, NY40

22. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 21 Summary: Best of Times  $18B for full year ’03, 6 th largest, above any year before 1998  VC Inv. $ up 20% in Q4’03 in Silicon Valley vs Q3’03  $50+ B committed capital unspent-money not the problem  NASDAQ at 2100, 23 month high  IPO mkt strengthening: 30 in registration  Chip sales up 10% YTD ’03 vs. ‘02, usually leading indicator  SEMI book to bill at 1.27  66% LP’s report private equity returns meet/exceed expectations. 45% LP’s plan to increase vc allocation, only 9% plan to decrease vc allocation.  Cisco stock at 2 year high and acquiring again…Okena ($154M), SignalWorks ($14M), Linksys ($500M), Twingo ($5M)  California 6 th largest economy in world, will likely surpass France (who won’t?) in 2004  Silicon Valley still place to be, flight to quality, #1 by widening margin (33% total)  Silicon Valley 2x vs #2 New England, 4x vs #3 NY  US 6:1 vs #2 Country (UK)

23. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 22 Summary: Not So Good Times  Valuations (public & private) down 50+%, often 1-3x revenues  Sun, HP, Apple, Solectron, AMD, Palm, mkt caps all <1x revenues  Intel VC portfolio down 67% from ‘01  Fortune 500 IT spending flat with aversion towards startups  Venture Backed IPO mkt still weak  Average of 8 VC backed IPO’s per quarter for last 12 quarters, 17 in Q4’03  Warren Buffet and John Bogle both forecast 10 years poor stock mkt return  IT Unemployment at record level – 6% in ’03 (1% in ’97, 4% in ’02)  Silicon Valley job levels won’t return to bubble levels until 2010  Total US employment levels down 2.7 million jobs since March ’01…jobless recovery  Average life expectancy S&P 500 company: 100 years in ’38, 20 years now  Consumer confidence lowest level in 9 years  % Fortune 500 offer health benefits to retirees: 66% in ’88, 34% in ’02  Tech Spending as % Capital Budget: 19% in ’90, 59% in ’00, no upside?  Gates says Fortune 500 tech spending won’t return to bubble levels in his lifetime

24. PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey SF_SJ_04_081_A 23 Implications for Finnish Entrepreneurs  Don’t rely on VC financing, raise as little as you have to  Bootstrap, customer financing, get to cash flow break even ASAP  Keep burn rate down, be cheap, when in doubt don’t spend  Focus on sales, referenceable customers  Watch cash balance, know where all cash goes  Use Comerica and PricewaterhouseCoopers  Be prepared to move hdqtr to US: Israeli model

25. *connectedthinking Steve Bengston Managing Director Emerging Company Services 650.281.9843 steve.bengston@us.pwc.com