Venture Capital Club 2003/2004 Introduction September 10, 2003

Proprietary & Confidential Agenda  Introduction of Board  Club Events and Initiatives  VC Overview  Internship Panel  Membership  Q&A

Proprietary & Confidential 2003/2004 VC Club Board & Advisor Board  Kevin Carpenter  Amar Kapadia  Sujal Shah Advisor  Frank Demmler – Associate Professor GSIA

Proprietary & Confidential Mission & Benefits  The CMU Venture Capital Club is committed to providing its members with career and educational opportunities in the venture capital and private equity sectors  Interact with some of the key players  Distinguished speaker series Hear distinguished venture capitalists and private equity investors speak on campus  Venture Capital Investment Challenge  Business Plan Competition  Social Events with the Pittsburgh Venture Capital Association (other events TBA)

Proprietary & Confidential Distinguished Speaker Series Topics:  Introduction to Venture Capital  Sourcing and Evaluating a Deal  How to Structure a Deal  Investment Philosophy  Leveraged Buy-Outs (LBOs) and Mezzanine Investing  Career Panel  How to Incubate a Start-up  Angel and Seed Investing  Biotech Investing  Exit Plan

Proprietary & Confidential How are funds structured?  Private limited partnerships General Partner – Individual managers of a fund Limited Partner – Individual and institutional investors  General Partner draws down capital as needed for investments  Investment period 5-7 years  Partnership term years At which time remaining holdings in portfolio are liquidated and cash and stock are distributed to the LPs

Proprietary & Confidential How are Fund Managers Compensated?  Two main sources of income – annual management fee and carried interest  Annual management fee Calculated as a % of total capital commitments to a fund Typically in the 1.5% - 2.5% range  Carried interest – share of the profits Typically 20%

Proprietary & Confidential Job Description / Qualifications Job Description:  MBA’s typically enter as associates  Screen incoming business plans and ideas  Perform due diligence on potential investments  Assist portfolio companies in developing their businesses Qualifications:  Leadership, interpersonal skills, strategic thinking ability, initiative, creative problem solving skills, and an ability to work in an unstructured environment  MBA’s, doctors, lawyers, PhD’s and other various professionals have made their way into venture capital

Proprietary & Confidential Job Advice  Determine your stage preference  Thoroughly research the firms  Decide on an industry focus  Use your networks  Start the process early  Get involved with the venture capital club  Read industry publications to stay abreast of developments in the industry  Be geographically flexible

Proprietary & Confidential Membership Dues  First Years: $25  Second Years: $20  Checks should be made payable to: Carnegie Mellon University  Drop checks in Sujal Shah’s mailbox Include address

Proprietary & Confidential Q&A

Proprietary & Confidential Tentative Schedule – Fall 2003 Mini 1  Kick-off Meeting (9/10)  Distinguished Speaker: Frank Demmler, Professor GSIA Topic: Introduction to Venture Capital  Distinguished Speaker: GP Techno Venture Management Topic: Biotech investing Mini 2  Distinguished Speaker: TBA Topic: How to source and evaluate a deal  Distinguished Speaker: Joel Adams, Adams Capital Management (TBA) Topic: Investment strategy  Distinguished Speaker: TBA Topic: Leveraged Buy-Outs  Career Panel: TBA

Proprietary & Confidential Tentative Schedule – Spring 2004 Mini 1  Kick-off Meeting (9/10)  Distinguished Speaker: Frank Demmler, Professor GSIA Topic: Introduction to Venture Captial  Distinguished Speaker: GP Techno Venture Management Topic: Biotech investing Mini 2  Distinguished Speaker: TBA Topic: How to source and evaluate a deal  Distinguished Speaker: Joel Adams, Adams Capital Management (TBA) Topic: Investment strategy  Distinguished Speaker: TBA Topic: Leveraged Buy-Outs  Career Panel: TBA Mini 3  Silicon Valley Trip A joint trip with the High-Tech Club  Venture Capital Investment Challenge, Northeast Regional, Babson College  Distinguished Speaker: Frank Demmler, Professor GSIA Topic: Introduction to Venture Captial  Distinguished Speaker: GP Techno Venture Management Topic: Biotech investing Mini 4  Distinguished Speaker: TBA Topic: How to source and evaluate a deal  Distinguished Speaker: Joel Adams, Adams Capital Management (TBA) Topic: Investment strategy  Distinguished Speaker: TBA Topic: Leveraged Buy-Outs  Career Panel: TBA