EGL Ventures IV

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EGL Ventures IV

• Private and Confidential

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EGL Ventures IV
Introduction
Introduction
Opportunity

• Target 100 million in capital.
• Balanced Early- and later-stage.
• Geography Southeast U.S. focus.
• Sectors Balanced between information technology,
  telecomm, and health care.
• Management 50 years experience.

People
Performance
Portfolio
Process

Summary

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EGL-IV History
Introduction
Introduction

• Aggregate 50 years of successful private equity
  investing.
• Two General Partners have worked together for 15
  years in three predecessor funds.
• New GP has eight years experience in three funds
  totaling 260 million.
• Fourth fund in the Southeast for all General
  Partners.
• The right team with the right strategy at the
  right time.

Opportunity
People
Performance
Portfolio
Process

Summary

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Private Equity Sector
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Regional Opportunity
Introduction
Introduction

• Regional advantages
• 1.5 trillion economy
• Low taxes, low cost of living
• Deep pool of human capital
• Intellectual capital anchored by universities and
  Federal RD
• Other pieces are in place (legal, banking,
  accounting, etc.)

Opportunity
People
Performance
Portfolio
Process

Summary

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Technology in the Southeast
Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

Biggest challenge Lack of local venture capital.
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Regional Undercapitalization
Introduction
Introduction

• Venture firms do not offer adequate leverage for
  local RD.

Opportunity
People
Performance
21 ?
Portfolio
45
Process
9 ?
40

Summary
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Substantial room for improvement!
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20
15
1.6 ?
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University RD (B)
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Venture Investment (B)
0
Source Venture Economics and the Center for RD
Bay Area
Northeast
Southeast
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The EGL Advantage

• Substantial operational experience at CXO levels.
• 15 years of investing in the Southeast.
• Staying the course Technology-oriented growth
  companies.
• A record of leadership.

Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

EGL was first outside investor in 20 out of 31
deals.
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11
EGL held board seats in 26 out of 31 deals.
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26
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Management Team

• Three General Partners
• David Ellis
• Stephen Fleming
• Salvatore Massaro
• Two Senior Associates already identified.
• Advisory Board.

Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

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David Ellis

• 27 years investment experience.
• Oversight of 100 investments at 3i.
• 13 investments at EGL.
• Commercialization of superconducting magnet
  technology, leading to creation of MRI industry.
• Ph.D., BiophysicsBS, Chemistry (both St.
  Andrews).
• Georgia Tech Advisory Board memberships.
• Substantial CXO operations experience.
• 15-year partnership with Sal Massaro.

Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

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Stephen Fleming

• 8 years investment experience.
• General Partner, Alliance Technology Ventures.
• 18 investments as lead investor, 15 exits to
  date.
• BS, Physics, Ga. Tech (Highest Honors).
• 15 years operational experience at ATT Bell
  Labs, Nortel, LICOM (venture-backed startup).
• Supervised startups developing first ADSL modem
  and one of the first cablemodems in early 1990s.
• Multiple advisory boards at Georgia Tech endowed
  chair in telecomm instructor in MBA
  entrepreneurship program.
• Strong regional technology leader.

Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

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Salvatore Massaro

• 20 years investment experience.
• 13 investments, 13 exits.
• Prudential-Bache Venture Capital, Price
  Waterhouse.
• CFO through IPO of Telesphere Intl.
• MBA, Harvard UniversityBSBA, Georgetown (High
  Honors).
• Former Member of NASBIC Board of Governors.
• 15-year partnership with David Ellis.

Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

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Advisors
Introduction
Introduction
Ian Armitage Founder Managing Partner, HgCapital
Mark Braunstein Founder CEO, Patient Care Technologies
Jean-Lou Chameau Provost, Georgia Institute of Technology
Michael Cronin Founder Managing Partner, Weston Presidio
Joseph Forgione VP, Net Solutions, Novell former CEO, Eprise
James Krugman Former CEO, Meadox Medicals (Boston Sci.)
John Lappington VP, Broadcom founder, Digital Furnace
Doug McMahon VP, Global Accounts, Hewlett-Packard
Howard Morrison Retired VP, Bank of America
Barrett ODonnell Former Chairman CEO, CareCentric
Bill Woulfin Former CEO, LecStar
Opportunity
People
Performance
Portfolio
Process

Summary

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EGL Performance
31 investments over 15 years (19892003) 107M
invested170M returned14M unrealized.

• Net IRR (annualized) 23.5
• Net Multiple 1.5 ?
• All returns shown net of management fees and
  carried interest.

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EGL Performance

• 107M invested, 170M realized.
• 14M still unrealized at current valuations.

Introduction
Opportunity
People
Multiple IRR
Gross Returns Gross Returns Gross Returns
Realized Return 1.6x 29.4
Realized, plus Unrealized Valuations 1.7x 30.1
Net Returns (net of management fees and carried interest) Net Returns (net of management fees and carried interest) Net Returns (net of management fees and carried interest)
Realized Return 1.4x 22.5
Realized, plus Unrealized Valuations 1.5x 23.5
Performance
Portfolio
Process

Summary

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Previous Portfolio Companies
Introduction
Introduction
ADS NetTools (EGL) Artcraft (EGL) Astracom
(SRF) At Work (EGL) Boca Photonics
(SRF) BroadRiver (SRF) Care Centric
(SRF) Checkmate (EGL) Digital Furnace
(SRF) Eprise (SRF) Fluid Data (EGL) Home Wireless
(SRF) iFleet (EGL) iPower (SRF) The Learning Co.
(EGL) Pathfire (SRF) Physician Health Corp.
(EGL) Pi Holdings (EGL) Quokka Sports
(EGL) Renaissance Int. (EGL) RF Micro Devices
(SRF) RF Solutions (SRF) SecureWorks
(SRF) Simione Central (EGL) Sportsline
(SRF) Synchrologic (SRF) Telaxis (SRF) ValuBond
(SRF) Verifiber (SRF) ZapMedia (SRF) Zarina (EGL)
Opportunity
People
Performance
Portfolio
Process

Summary

• Successful IPOs and MAs.

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Previous Syndicate Partners

• Followed Our
• Origination
• ATT Ventures
• Bank of America
• Charles Schwab
• Cordova Ventures
• Crystal Ventures
• FT Ventures
• GE Capital
• Grotech Capital
• Halpern Denny
• Imlay Investments
• Intelligent Systems
• ITC Holdings
• IVP / Redpoint
• JKB Capital
• Kinetic Ventures
• Kitty Hawk Capital
• Mellon Ventures

Quadrangle Capital Riggs Capital Robinson
Humphrey Sand Hill Capital Sevin Rosen Funds US
Venture Partners Vantage Point Weston
Presidio Invited Us to Lead Subsequent
Round Advanced Tech Ventures Allen
Telecom CBS Coral Ventures Domain Associates EMC
Ventures Kleiner Perkins Lucent Ventures Prism
Ventures Reuters US West
Introduction
Introduction
Opportunity
People
Performance
Portfolio
Process

Summary

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Classic Fund Structure
Introduction

• Limited Partnership.
• 2.5 management fee.
• 80/20 carried interest after payback of committed
  capital.
• Intent to comply with ERISA regulations.

Opportunity
People
Performance
Portfolio
Process

Summary

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Why Us? Why Now?
Introduction
Opportunity

• A team that
• Transcends adversity
• Seizes opportunities
• Delivers on expectations
• with the experience to make it happen.

People
Performance
Portfolio
Process

Summary

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EGL Ventures IV

• EGL Ventures
• 3495 Piedmont Road
• Ten Piedmont Center
• Suite 412
• Atlanta, Georgia 30305
• [phone]
• www.eglventures.com

Placement Agent Ariane Capital Partners 501
Candace Lane Suite 100 Villanova, Pennsylvania
19085 [phone] www.arianepartners.com