1. C O N F I D E N T I A L | DO NOT DISTRIBUTE Start-Up Financing and Cultural Differences Silicon Valley vs. Europe Start-Up Financing and Cultural Differences Silicon Valley vs. Europe

2. C O N F I D E N T I A L | DO NOT DISTRIBUTE 2 San Francisco, Paris $550M Funds under Management Early Stage IT Integrated Model Institutional Investors PARTECH INTERNATIONAL

3. C O N F I D E N T I A L | DO NOT DISTRIBUTE 3 INNOVATION FINANCING Cultural Differences and Entrepreneurship Venture Capital Overview The Term Sheet: where it all begins A Matter of Perspective

4. C O N F I D E N T I A L | DO NOT DISTRIBUTE 4 INNOVATION FINANCING Cultural Differences and Entrepreneurship Venture Capital Overview The Term Sheet: where it all begins A Matter of Perspective

5. C O N F I D E N T I A L | DO NOT DISTRIBUTE 5 THE VENTURE FUND MONEY FLOW Venture Capital Fund Institutional Investor IPO/M&A $200-500M $5-10M $10-100M Entrepreneur Venture Capital Fund Institutional Investor

6. C O N F I D E N T I A L | DO NOT DISTRIBUTE 6 INVESTMENT SLOWING YET PACE SUSTAINED

7. C O N F I D E N T I A L | DO NOT DISTRIBUTE 7 YET… SMALLER ROUNDS

8. C O N F I D E N T I A L | DO NOT DISTRIBUTE 8 MOSTLY IN IT AND HEATHCARE

9. C O N F I D E N T I A L | DO NOT DISTRIBUTE 9 FOCUSED ON EARLIER STAGE

10. C O N F I D E N T I A L | DO NOT DISTRIBUTE 10 EXITS: MOSTLY M&A

11. C O N F I D E N T I A L | DO NOT DISTRIBUTE 11 CALIFORNIA: NEARLY 50% OF US TOTAL Silicon Valley/Bay Area: 33%

12. C O N F I D E N T I A L | DO NOT DISTRIBUTE 12 Amount Invested (€B) US VENTURE INVESTMENT EUROPE VENTURE INVESTMENT EUROPE WAY BEHIND France/US: 1/10 in number of deals, 1/20 in amount

13. C O N F I D E N T I A L | DO NOT DISTRIBUTE 13 A CRISIS? Average IRR by Fund Vintage

14. C O N F I D E N T I A L | DO NOT DISTRIBUTE 14 KEY ISSUE: TIME-TO-EXIT

15. C O N F I D E N T I A L | DO NOT DISTRIBUTE 15 INNOVATION FINANCING Cultural Differences and Entrepreneurship Venture Capital Overview The Term Sheet: where it all begins A Matter of Perspective

16. C O N F I D E N T I A L | DO NOT DISTRIBUTE 16 WHY SILICON VALLEY? Many VCs: sure, but why are they here? Culture creates system Successful system fosters culture Many tried… Universities: sure, but many other Sunshine, beautiful bay: true, unreplaceable Economic and tax environment: not unique The real reason: culture really hard to reproduce Good lawyers, PR firms, engineers: not unique

17. C O N F I D E N T I A L | DO NOT DISTRIBUTE 17 A LOOK AT THE TERM SHEET Reaction Tells All Silicon ValleyFrance (Europe) Liquidation Preferences ExpectedWhy? Employee Option Pool Negotiate reasonable range Eliminate or minimize Founder Vesting Negotiate protective exit clauses Major shock! Preferred Voting Rights Course of businessHard to accept Board Structure & Control Course of businessDistrust, suspicion

18. C O N F I D E N T I A L | DO NOT DISTRIBUTE 18 INNOVATION FINANCING Cultural Differences and Entrepreneurship Venture Capital Overview The Term Sheet: where it all begins A Matter of Perspective

19. C O N F I D E N T I A L | DO NOT DISTRIBUTE A Matter of Perspective 19 Decision Making Influence Sharing Capital Sharing Hiring and Firing How cultural context changes everything

20. C O N F I D E N T I A L | DO NOT DISTRIBUTE A MATTER OF PERSPECTIVE: DECISION MAKING 20 Silicon Valley Focus: Act => Fast decisions OK to be wrong, just adjust If you are right 70-80% of the time… Mostly Pragmatic decisions France Focus: Think => Optimized decisions Avoid mistakes at all costs Often Emotional decisions Example: NEU Decision to focus on market… painfully long meetings Example: MSY “I know it is the right decision but…”

21. C O N F I D E N T I A L | DO NOT DISTRIBUTE A MATTER OF PERSPECTIVE: INFLUENCE SHARING 21 Silicon Valley Recognize expertise …and lack thereof Open management communications (including strategic matters) Uneducated about foreign markets, but know it. France Problem delegating to functional experts Tight-lips management and information control More educated about Intl. markets, but harder to let local execs drive strategy Example: INO Could not give up leadership for larger goal Example: KTK We dominate at home, therefore we know…

22. C O N F I D E N T I A L | DO NOT DISTRIBUTE A MATTER OF PERSPECTIVE: CAPITAL SHARING 22 Silicon Valley Ownership is part of standard compensation Dilution creates value OK to own 5-10% of company at IPO France Ownership is founder privilege Dilution robs founders Unfair to own 5-10% of company founded Example: SWY US: everyone a shareholder – France: 7 shareholders (out of 100+) Example: TI Missed exec hires, conflict with French management and board structure

23. C O N F I D E N T I A L | DO NOT DISTRIBUTE A MATTER OF PERSPECTIVE: HIRING AND FIRING 23 Silicon Valley Employment is business contract One month notice: you’re a softie France Employment is moral contract One month notice: you’re a cold-blooded capitalist Example: SWY Hunt versus nurture Example: IMM Incapable of hiring execs, looking for perfect match (see also indecision)

24. C O N F I D E N T I A L | DO NOT DISTRIBUTE UNDERSTAND THE LOCAL CONTEXT, BUT… 24 The obvious: (most) markets are global Competition can come from anywhere Ex: CLAP didn’t see European competitor emerging Local advantage may be blinding Ex: MIA ignored rise of US giants Cultural advantage may be carry limits Ex: PCT stayed local lifestyle company Always keep a global perspective