1. Confidential How do you build high potential start-ups? September 2011 Erik Straser, es@mdv.com

2. Confidential Firm Overview 28 Years of Early Stage Venture Investing Leadership Differentiated, Thesis-Led Strategy Diversified Across Three Categories Passionate Commitment to Innovation and Entrepreneurship Founded in 1983 Invested in more than 275 companies Over $2.8B aggregate LP distribution to date Currently investing from our Ninth Fund; $1.85 under active management Founded in 1983 Invested in more than 275 companies Over $2.8B aggregate LP distribution to date Currently investing from our Ninth Fund; $1.85 under active management Deep domain expertise Multi-disciplinary Active, hands-on company builders Leaders in public policy Deep domain expertise Multi-disciplinary Active, hands-on company builders Leaders in public policy Cleantech: Solar, Storage, Smart Grid IT: Enterprise Focused Application & Infrastructure and Consumer Web/ Mobile/Social Life Sciences: Personalized Medicine and Transformational IT Cleantech: Solar, Storage, Smart Grid IT: Enterprise Focused Application & Infrastructure and Consumer Web/ Mobile/Social Life Sciences: Personalized Medicine and Transformational IT Hands-on company builders Stubborn belief that innovation lies at core of venture returns Culture of risk-taking, pioneering new areas Hands-on company builders Stubborn belief that innovation lies at core of venture returns Culture of risk-taking, pioneering new areas

3. Confidential Entrepreneurs The fundamental ingredient Many people are entrepreneurial, very few are entrepreneurs Come in usually two types: ─Market visionary: have a deep understanding of a market in flux ─Technical visionary: have a deep understanding of how a technology could transform a market ─Craft credible, measured paths to risk reduction Are efficient at aggregating resources ─Capital ─People

4. Confidential Markets Two types of markets: ─Large, incumbent markets being subjected to new forces ─Fast growing prospective markets Being created or transformed by: ─New technology ─New business models ─New Regulatory Environment Markets that are addressable by a startup ─Sales and Marketing ─Distribution and Service

5. Confidential Capital That is available to the best entrepreneurs and companies from: ─Angels ─Early stage (pre-revenue or early revenue) ─Strategic Partners ─Late stage (growth capital) ─Mezzanine (expansion capital) ─Exit via public markets (IPO) or trade sale That can be patient That is sufficient in size to finance the company all the way That understands the risk it is taking That understands how downstream capital behaves That is rewarded, along with management, in success

6. Confidential Ecosystem Hardest thing to replicate about Silicon Valley Culture of risk taking and a culture that tolerates “smart” failure Rational policy and regulatory framework that allows startups to succeed Self reinforcing system ─Research Universities for technology and raw talent ─Healthy large companies nearby for managerial talent ─Risk taking capital ─Service providers that understand how to service a startup Legal Accounting Real Estate Banks and Financial Services Rewards success both financially and culturally