Smart Money for Smart Start-ups

SMART MONEY FOR SMART STARTUPS

www.runacap.com © 2013, Runa Capital

RUNA CAPITAL PRE-HISTORY

FUND II The Cloud and beyond RUNA CAPITAL CONFIDENTIAL © 2013, Runa Capital

Ilya ZubarevSenior Partner

Dmitry ChikhachevManaging Partner

Serguei & Ilya founded the consumer electronics manufacturer; now the largest in Russia with a $500M/year turnover

Serguei & Ilya founded SWSoft, later acquired Plesk and Parallels and re-baptized SWSoft to Parallels. With over 1,000 employees and $130M+ revenue, the company is the market leader in Automation for Cloud Service Providers, Container-based server and Desktop virtualization.

Serguei & Ilya acquired assets that became Acronis, specializing in physical

and virtual data management and disaster recovery software, the

company employs 850+ people and generates over $139M revenue.

Dmitry started his career in LM ERICSSON, where he managed all HR-related processes across 7 CIS countries.

After completing MBA Dmitry moved to Head of Business Development role at Ritzio Entertainment Group, top gaming operator in Eastern Europe, with $800M in revenue, leading international expansion projects: greenfield in Kazakhstan (scaled to $15M), in Romania (scaled to $25M), and acquisitions in Peru, Bolivia, Germany, Belarus, Czech Republic for over $20M

Serguei & Ilya invested $800K in GFI, the provider of a complete set of IT solutions for SMB. Investment is partly exited, with 5x ROI and IRR 40%

Serguei & Ilya invested a total of $3M in AutomatedQA provider of tools for managing software development and testing. The investment is partly exited with implied ROI in excess of 7.5x and more than 44% IRR

1995-2000 2001-2005 2005-2009

Serguei Beloussov Senior Partner

Dmitry started up and led Uvenco: a spin-off of Ritzio Entertainment and grew it to $25M in revenue, thus becoming the leading operator of automated trade in Eastern Europe

Serguei & Ilya founded the leading accounting and ERP software distributor in SEA

Serguei & Ilya founded Acumatica, leading cloud ERP systems provider; $55M company valuation based on recent transaction

2010

RUNA CAPITAL 4 YEARS IN ACTION

Jun 20101st term-sheetJelastic

Feb 2011 Andre Bliznyukjoins Runaas Investment Partner

Aug 2012First exit

4x ROI

Jul 2013 Peter Bauertjoins Runa

as Investment Partner

Aug 2013raised Round B for 4x

Round A

Oct 20101st dealclosed

Apr 2010 –RunaGP incorporated,fundraising started

Dec 20102nd closing$50M

Dec 201233 companies

$47M invested

Aug 201342 companies

$75M invested

Sep 20101st closing$20M

Dec 20104 companies$3M invested

Apr 20113rd closing$75M

Dec 201112 companies

$10M invested

Apr 2012Final closing

$135M

Dec 2009 - inception“Cloud Incubator”$30M seed fund


2011 2012 2013

Oct 2013Second exit

1.7 ROI

““

TEAM Operating Partner/CFO, CTO in residenceHR Director, PR Director

PORTFOLIO

$135M fund raised

$78M Invested (incl. $9M in seed stage)

$32M reserved for follow-ons

32 portfolio companie (excl. seed)

12 seed stage investments

3.6x realized return based on 2 exits

1.4x unrealized ROI

22% unrealized IRR on invested capital

2 Founding Partners3 Investment Partners

2 Investment Directors2 Analysts

POWERFUL BRAND

The list of venture investors in

Russia is led by Runa Capital

- September, 2012

Featured in top analytical, venture social media


RUNA CAPITAL VALUE CREATED

“““““ “ “

RUNA CAPITAL WHY WE ARE SPECIAL?ENTREPRENEURIALHANDS-ON EXPERTISEPositioning Runa as co-founders – more than just investor

Lending our own expertise to portfolio companies> product, business development, operations,fundraising

Enabling business growth of our portfolio companies: recommend good people, introduce right partners, bring to new markets

UNIQUE ABILITY TO

GENERATE PIPELINEActive PR efforts and high visibility > investment inRuna brand and brand of porfolio companies

Our reputation of “partner of choice” for most foreign and local funds and IT corporations > easysyndication

Active presence in regions of Russia and Ukraine

Access to many best industry experts and academia from leading universities

SPECIFIC AREASOF EXCELLENCE

#1 VC firm in Cloud solutions for SMB: 35 industryinsiders as LP’s, 10x more – advisors and friends.Strong affiliation with major players: United Inter-net, Go Daddy, Endurance, Parallels etc.

#1 VC firm in Russia and CIS: 100% brand aware-ness, strong presence in regions of Russia

We are very good in several other areas: complexsoftware/strong engineering expertise, specificregions – SEA/LatAm, specific verticals – sci-ence/education/government

Brought 10+ partners (Wix, GoDaddy,1&1, Endurance, Verio etc).Recruited president & GM NorthAmerica.

Jim O’Hara (ex. LiveOffice)

As an entrepreneur you look for inves-tors who can bring real value to yourcompany, [the] team at Runa Capitalare exactly this type of investor.

Gus Robertson, CEO Egor Rudi, Founder and CEO

Eruditor had a deal with Intel Capital Runa fully appreciates how to buildon the table, when I decided I want products that satisfy customers, [this]Runa Capital to join the round, so I had makes Runa a truly special partner forto persuade Intel to give part of it to any early stage technology company.Runa...

Jeremy Levine, partner at BVP


“

RUNA CAPITAL #1 CLOUD COMPUTING

Network 250+ professionals

Ecosystem leading firms in Cloud SMB

RafaelLaguna

AndreasGauger

ThomasStrohe

OlegTscheltzoff

JochenBerger

Reed J.Caldwell

ThomasGorny

PatrickPulvermüller

WarrenAdelman

MichaelChoupak

AchimWeiss

TracyConrad

Portfolio cloud companies

6 venture partnersSeasoned IT Entrepreneurs and Investors (IgorBorovikov, Alexander Galitsky, Igor Daniloff, Al-exander Katalov, Achim Weiss, Oleg Tscheltsoff)

45 limited partners35 successful IT entrepreneurs + 10 asset man-agement /investment boutiques

200+ industry expertsprofessionals from leading companies in cloudsoftware, virtualization, IT security, hosting andmany more


MOBILE DEVICES

P2P INTERNET

CLOUD COMPUTING


THE OPPORTUNITY TRIPLE TSUNAMILANDSCAPE IS CHANGING

iPhones sold

iPads sold

Smartphones Sold

Facebook users

Facebook revenue

Internet users

Amazon AWS Revenue

Salesforce.com Revenue

Cloud market

2007

3.3M

0

120M

3.3M

0

120M

3.3M

0

120M

2012

130M

60M

650M

130M

60M

650M

130M

60M

650M

2017

500M?

400M?

2B?

500M?

400M?

2B?

500M?

400M?

2B?

MOBILE DEVICES

P2P INTERNET

CLOUD COMPUTING

THE OPPORTUNITY PERFECT STORM

NO ONEIS SAFE

Apple –what’s next?

Facebook –expectations, expectations…

HP – nobodyneeds desktops

Dell – where tobuy your server?

Google –becoming a platform

Cisco - Software-DefinedNetworking

Intel vs.Qualcomm

Microsoft –not a default


INVESTMENT THEME 1 SMALL BUSINESS – BIG MONEY

Hosting and Telco providers are building acomplete Cloud ecosystem of mass-marketcloud applications for SOHO/SMB, as themarket is set to explode over the next years:

- 48% was the growth in new data creation in 2012, reaching 2.7 Zettabytes

- SMB IT budgets are experiencing 4x growth vis-à-vis all IT budgets

- 4M SMBs entered cloud market in 2012

- Global SMB cloud market will grow by 28% year over year through 2015

Business software ona subscription basis; $3blnin sales in 2012

46M reviews$137M in 2012 sales

Cloud ERP for SMB and enterprises;$120M in 2012 sales

TOTAL GLOBAL IT SPENDING

Enterprise$780bln

SMB$510bln60% 40%

GLOBAL CLOUD MARKET

DEC 12 DEC 13

EXAMPLES FROM RUNA I PORTFOLIO

Businessapplications

Hosted communication& collaboration

Web presence and webapplications

Infrastructureas a service


$45bln

$96bln

EDUCATION

IMPROVEMENT POTENTIAL

Healthcare, Education andFinance are among themajor sectors to benefitfrom new IT services

(bubble size – worldwideindustry size in US$ bln)

FINANCE

doubled the number of users to 2M in 1H 2012

the largest P2Plender in US, has loans for $2.3B+ as of Aug 2013

HEALTHCAREprovider or rapid genetic testing, accumulated a database ofmore than 100,000 individuals after 4 years since launch,and raised 50M+ in financing in 12/12

offering online courses. In 2 years since its launch, it has 62 leadingAmerican universities among its partners



INVESTMENT THEME 2 VERTICALS DISRUPTED

Next generation IT services bring new opportunities into many traditional verticals: Finance,Healthcare, Education, Public sector – largest demand for improvement and growth potential:disruptive innovation in such segments is leveraged by Social & Mobile penetration

Access to top engineering and scientific expertise for making sound judgment aboutthe viability of technology & provide valuable advice to developers. Very few VC lookat complex SW – less competition, best deals at unique terms. No amateur investors– no inflated valuations.

Founded in 2008 Cloudera reached $100M in revenues in2012 raised $65M in series E in 12/12

10gen - the company behind MongoDB, the leading NoSQLdatabase - raised $42M in series E in 5/12

In 2009 VMware acquired SpringSource – an application de-velopment framework for enterprise Java - for $362M

Cisco acquired Israel’s IntuCell, developer of advancedself-optimizing network (SON) software, for $475M

MichaelWidenius

PaulMaritz

BertrandSerlet

MichaelDell



System Software, Big Data, Distributed Processing Middleware, PaaS (Platforms as a Service), Development

Tools – in demand because of infrastructure changes. Massive growth applications usage requires strong

underlying technologies. Advanced science requires complex algorithms and distributed data processing

OUR AREA OF EXCELLENCE AND COMPETITIVE ADVANTAGE

INVESTMENT THEME 3 COMPLEX SOFTWARE


PREFERED RANGE

$1-10M INVESTMENTS FOR

10-40% OF THE COMPANY

INVESTMENT FOCUS SUMMARY

CLOUD SOLUTIONS FOR SMB

IT FOR EDUCATION, FINANCE AND HEALTHCARE

COMPLEX SOFTWARE

FOR DEALS LESS $1M

Runa team is a unique combination of IT expertise, investment instinct, operational excellence, experience of international business development and knowledge of local tech industry – absolutely perfect set of competence for early stage tech investments in Russia – Runa is our partner of choice.

Michael Triplett, Partner of Insight Venture Partners ($3bln+ top-10 US VC)


PREFERED RANGE

$0.5-1M INVESTMENTS FOR

10-40% OF THE COMPANY

SEED STAGE DEALS PHYSTECH VENTURES

FUND anchored in Dolgoprudny, Russia is a $30M seed fund focused on incubating and growing MIPT-related technology companies that solve a measurable customer problem in a large or rapidly growing and sizable markets in IT, energy & cleantech, new materials and high-tech devices. The MIPT-related companies will represent up to 60% of portfolio – rest are high-quality start-ups founded by students and grads of world’s best technology universities

B2P SOFTWARE AND SERVICES TO FINANCIAL SERVICES

HEALTHCARE IT 3D PRINTING & INFRASTRUCTURE

TECHNOLOGIES IN OIL & GAS SECTOREFFICIENT ENERGY USE EDUTECH

WHY DIFFERENT

LARGE AMOUNT OF

QUALIFIED SCIENCE AND

BUSINESS EXPERTS

Connected by MIPT Alumni

network

GOAL

INVEST IN NUMBER OF COMPANIES

WHICH ARE CAPABLE TO BECOME

INDUSTRY LEADERS SUCH AS

PARALLELS, ACRONIS, ABBYY,

VEEAM, AELITA SOFTWARE ETC

CASE STUDY


High performance web-server, hosts 22% of TOP 1M sites worldwide (web-server #1 across top-1000). Rapidly gaining market share (number of NGINX websites tripled last year). Powered by NGINX: Facebook, Netflix, CNN, Techcrunch,Yandex, Wordpress, Groupon

2002-2004 Igor Sysoev creates NGINX to solve Rambler’s

dial-up clients problem

2009 the problem becomes massive with mobile smart

devices usage

2011 $3M Series A closed

2012 Gus Robertson fromRedHat recruited as CEO. HQ

is to move to USA.

2013 $10M Series B closed. NGINX-PLUS sales to Enterprise started

2014 NGINX becomes N1 web server for Top-10,000

busiest websites

CASE STUDY

FUND II The Cloud and beyond RUNA CAPITAL CONFIDENTIAL

Jelastic is PaaS software which arms Java developers with a set of services that can be used both for the development of new and existing applications any complexity. Over 30000 developers subscribed, partnerships with 15 hosting providers globally.

2009 Ruslan Synytsky develops Hivext.“Cloud IDE”

2010 Seed round 500KJava PaaS instead of IDE:

Jelastic

2011 Dmitry Sotnikov is hired as COO (based in the U.S. LA)

2012 $2.5 Round B +$1M R&D grant

2012 Launching commercial product for hosting providers

2013 John Derrick (Intel, IBM) hired as CEO. Pivot to Enterprise/OEM

(private cloud)

2014 Jelastic raising series Bin US. First Enterprise and

OEM sales.

2013 PHP added to the stack. 9000 developers, 12 partners, 5

continents. Backed by James Gosling & Rasmus Lerdorf

CASE STUDY

Full-fledged shopping cart solution implemented as embeddable AJAX widget – cross-platform and fully integrated with all major payment & delivery systems. Powers 400 000+ store-fronts in 175 countries, processing 10M+ transactions per month

2000 Ruslan Fazlyev word’s first PHP shopping cart (inspired Roy Rubin)

2009 new generation e-commerce SW asspin-off from X-cart.


2011 $1,5M Series A closed

2012 Jim O’Hara from Live Office hired as President. San Diego

branch is opened.

2012 Sridhar Nagarajan joins ECWID as CMO

2013 Channel strategy – first success stories

2014 ECWID raising Series B in the U.S. Massive scaling of the business.

2013 Direct/freemium results:350,000 storefronts, 175 countries, 45 languages

EVEN MORE CASE STUDIES

COMPANY DESCRIPTION

Dnevnik provides a comprehensive educational platform for schools, including a learning management system, school document flow management and a social network. It is used in more than 29 000 Russian schools (52% market share in Russia).

Help to get $1,5M convertible debt from VEB Innovations venture fund and $6M private equity investment company.

Online language learning service using game mechanics to engage users into the learning process. It provides web service and mobile applications, which are user by over 7 000 000 registered users total in Russia and Brasil.

Runa Capital hired COO Dmitry Staviskiy, ex-VP of International Operations at Evernote.

Provider of cloud-based business management software for automotive dealerships, which is based on Microsoft Dynamics CRM and covers end-to-end dealers' operations from vehicle sales to workshop activities.

Coordinated signing of $3M-contract with Nissan in 2012.

Next gen web security solution to protect online businesses from application level hackers attacks, which is used by some of the top 50 web sites globally.

Assisted with NGINX integration.


HOW WE HELP PRODUCT DEVELOPMENT #1


• Assessment of development team skills, hiring assistance, recommendations for competence development• Parallels/Acronis/Acumatica/United Internet and other created by

us companies (PORTFOLIO) products are global leaders at scale, with lots of proof and 10s of millions of users

• We have developed a very sophisticated process of recruiting, assessing, improving skills of our global and specifically Russian teams – relations with top Universities, specific recruiter relationship, tests, PR, direct access to talent pools we know and more

• Management and Motivation of extensive development teams in Russia, what works what does not• PORTFOLIO employs several 1000s of world class engineers,

working at large teams for long periods of time on release of broad products, specifically in Russia but also US, Europe, Asia.

• We would provide direct access to key, relevant Human Resources and Engineering manager in those teams, including outside of Russia to discuss specifics of how engineers are motivated and managed.



• Implementing an efficient engineering process – Planning, Program Management, Quality Assurance, Documentation, Release Cadence• Russia/CIS still produces significant number of high quality

educated engineers and scientists. However there is very few teams / people with world engineering management and engineering culture

• We have those teams in our Portfolio and could help to share best practices, processes, tools, give access to proven consultants, recommend vendors. Again direct access to our contacts and people would be provided. Especially Program Management

• Help on scalable, reliable, maintainable, extendable, secure, available, efficient, fast and such more product architecture• It is only possible to succeed with products which scale to 10s of

millions of users, in 100+ countries, grown over 10+ years – hence with changing tech landscape and against very strong competitors

• This puts very serious strain on well thought product and technology architecture. We believe we have that expertise/expirience and understanding on where to get it for you



• Reviewing and commenting on product development plans, setting priorities, following up, structured feedback on the features and parameters of the product• Product management and Product completeness are the hardest

things to grasp. We will involve best and relevant experts from our Portfolios to provide such feedback in real time

• Weekly or Monthly, monitoring product development process – pointing out mistakes, recommendations on fixing them, practical help• As a part of product development involvement we could assign

part-time professional engineering / product development expert, to meet on weekly basis and help structure the things above in real time and over the development of the company

• While building companies in our portfolio with bare hands we paid 100s of millions of $$ for mistakes in product development – there is no need to repeat our mistakes

HOW WE HELP BUSINESS DEVELOPMENT #1


• Developing efficient and profitable business model for target markets• Establishing the right business model for your project is about

reducing friction; it’s about knowing how customers want to buy, who they want to buy from, and how everyone should get paid.

• The Runa Capital team provides hands-on expertise with a global perspective. We know what works and if we don’t have the answer, we have access to the right expert.• Example: Thinkgrid (cloud hosting) plan & business model was

reviewed by Andreas Gauger, former CEO of 1&1, the largest hosting company in the world.

• Search of key management positions for international development of your business• Hiring key business development talent is like betting on horses;

you pay upfront and you don’t know the outcome until after the race.

• The Runa Capital team can help you find the right talent, connect you with right/best recruiters and we have access to back-channel references – you will have better odds at succeeding and you will increase your speed to market. • Example: Ezequiel Steiner, CEO of Acumatica, is former VP

Corporate & Business Development @ Parallels.



• Finding key technology and Go-To-Market partners for target markets, facilitating negotiations • Leveraging partners is a key method to accelerating your project.

Picking the wrong partners and/or ending up in protracted negotiations is the most common obstacle.

• The Runa Capital team has hands-on experience and we can help you avoid the pitfalls. • Example: Connected Ruslan Synytskiy, CEO/Founder Jelastic

with key contact @ HostEurope Germany, ServInt USA, Tsukaeru Japan, Go Daddy USA and more

• Practical help in getting first customer traction, references in each vertical & geographical market• Getting market acceptance is a key milestone; the quicker you

have validation the faster you can sell. • The Runa Capital team has access to 100s of companies globally

who would be eager to become your first referencable customer. • Example: Nginx secured commercial relationship with Dell and

an investment from Michael Dell, based on recommendation from Serguei Beloussov.

• Reviewing and commenting business plans, particularly in relation to global expansion, specific to every market



• Involving international experts from network of Runa Capital

• Runa Capital and its investors are made up of successful entrepreneurs. What is most special is expertise in building business not only in US/Russia, but also all over Europe, Asia including Japan and China, Africa, South America

• Example: Serguei Beloussov & Ilya Zubarev have built two $150M+ software companies in 10 years (Once is hard – twice has never been done)

• Advice on developing specific marketing plans for target markets

• Marketing plans are about positioning, messaging, pricing, etc. All investors have read the “books”, but the Runa Capital team has executed and can bring hands-on expertise.

• Example: John Howell, former President of Solomon Software International (sold to MSFT) invested a substantial amount of time to review & improve marketing plans for Acumatica.

• Building and monitoring global sales channels

• Scaling your business through a repeatable sales process executed on a global basis is critical in the later stages of your project. The Runa Capital team is made up of individuals that have run companies with $100M+ revenue on a global scale..

• Example: As CEO of Parallels, Serguei Beloussov personally hired the majority of the sales force and put in place repeatable sales processes.

HOW WE HELP OPERATIONS #1


• Support in setting up the right company structure to ensure maximum value for shareholders / founders and compliance with international tax regulations.

• Setting up the company correctly during its early stages can avoid substantial tax charges and liabilities for the company / founders down the road. Global have highly optimized tax structures which provides them significant long term advantage

• The Runa Capital team has substantial hands on experience with properly structuring companies to take advantage of global tax regimes.

• Example: Swiss parent company with negotiated 10 year tax holiday plus Russia based development entity and USA based sales entity, with proper IP transfer, resell agreements, tax opinions, pricing studies and more

• Registering companies and help with corporate/legal issues.

• It’s a daunting task to deal with legal issues – patents, immigration, corporate, employee and finance on a global basis for entrepreneurs who do not have much experience; plus it can be a major drain on time & money.

• The Runa Capital team has the expertise and will be helping you and your team every step along the way.

• Examples: We helped Jelastic secure a USA H1B visa for Dmitry Sotnikov, Parallels has 150+ US and EU patents filed



• Support in setting you physical office in various parts of the world, administration, IT • Setting up an office sounds simple, but site selection, negotiating

with landlords and laying out work space to ensure highest level of productivity are activities prone to trial and errors.

• These errors can be costly and we can help you avoid such mistakes. Collectively, our team has setup 100s of offices in 50+ countries and you can tap into our wealth of knowledge and expertise. • Examples: Acumatica just expanded its USA presence with

new office outside Washington D.C., Parallels has significant offices in 18+ countries.

• Financial planning, accounting and reporting, tax advice• As your company evolves, so does the need for proper financial

management and reporting, which would be crucial in making business ready for the next stage

• Our vast network of experts have experience with financial planning, budgeting, reporting, and tax at all levels. • Example: Helped TravelMenu prepare its financial forecast for

its next round of funding; or helped Ezequiel Steiner, CEO of Acumatica, improve financial reporting capabilities and prepare for audit with big4 accounting firms



• Support in filing domestic and foreign patents, scientific consultancy for patents• Protecting you intellectual property (patents, trademarks, etc.) is a

critical element to support your long-term competitive strategy.• The Runa Capital team has the collective experience of 1000s of

patent/trademark filings. We can provide the know-how that allows you to make this process easy and quick. • Example: Leverage Parallels’ long-term relationship with

George Bardmesser, a Russian speaking Patent attorney in the USA.

• Support in recruitment and executive search, other HR consulting• Ensuring you hire the right talent, eliminate non-performers quickly,

and retain your best employees for the long-run are critical success factors that will determine your company’s success.

• The Runa Capital team has hired 1000s of individuals – we have a vast network for you to tap into and we can help you identify the right fit. We can also help you deal with current employees (good or bad). • Example: Piggy-back on long-term relationship and favorable

terms & conditions for good recruiters such as Heidrick and Struggles, and Lee Silver

• Reconciling cost structures and negotiating with key vendors

HOW WE HELP TAKING TO THE NEXT LEVEL #1


• Development of a long-term equity story, finding next round of investors and preparing for an IPO / trade-sale• Getting additional funding (public/private) and/or getting acquired

is about selling the story. It’s not about the best product/service. • The Runa Capital team has extensive experience in crafting the

story and selling it. We have access to a almost any imaginable investors in the world (financial/corporate), more importantly we could find the right fit for you• Example: Helped secure corporate financing from Visma (KKR

portfolio company) for Acumatica at valuation > 5x prior round.• Establishing corporate governance framework: Board of

Directors, split of responsibilities between management (CEO/CFO/CTO/etc.)• As your company grows, so does the complexity around proper

decision making and separation of duties. Scaling your company is about removing friction and frication exists where there is uncertainty about responsibilities / accountability.

• Many of the Runa Capital team members have been in CEO, CFO, CTO, and other executive roles as well as served as board members for companies of various size. • Example: you will have direct access to Serguei Beloussov, a

CEO/Entrepreneur and Peter Bauert, a CFO/COO, each with 20+ years experience and $2B+ in shareholder value creation.



• Establishing stock-based management and employee incentive schemes• As you expand the team beyond the founders, it will become

critical to have the right employee incentive schemes. Do you know what compensation (base/bonus), option package / acceleration / severance / perks you should offer a CEO/CFO/etc?

• The Runa Capital team has been in your shoes and knows first hand what is common practice vs. what is best practice. Closing the right candidate at the right price is critical – don’t learn the hard way. • Example: Helped shape an equity incentive scheme for Alawar

and Badoo.com. • Example: ask for a verbal record of hiring some of the top

executives and related pricing • Building the internal infrastructure: finance function, internal

audit, investor relations• Do you know the difference between FP&A and Accounting? Do

you know when you should bring in a CFO vs. Group Controller vs. Local Controllers? Do you have templates for budgets?

• The Runa Capital team has answers to each and every one of these and much more. Let them help you take the guess work out of the equation with practical / tactical support and advise. • Example: Helped Mikhail Ushakov, CEO Metabar, improve his

periodic report and budgeting process through the use of a standard template.



• Introducing the necessary accounting and reporting systems: audited IFRS accounts, IFRS-based management accounts, 5-year business plan and investment program

• As your business gets traction and revenue increases substantially, you will need to introduce much more formal / rigorous financial systems, processes, and procedures.

• Are you dealing with your first external audit? Have you been asked to produce a detailed long-range financial mode? Irrespective of what is being asked off you, the Runa Capital team can help with practical/tactical support that draws upon its vast network of operations/finance experts.

• Example: In process of helping Acumatica convert from cash accounting to accrual accounting, as it gets ready for the audit.

• Involving third-party consultants: independent auditors, tax and legal advisers

• At times, you will have to involve 3rd party service providers to help you with a project. Do you know which firm you should work with? Have you worked with partners / associates at that firm?

• The Runa Capital team draws upon a large network of 3rd party professionals that can help you with legal, tax, accounting, and audit needs.

• Example: You can leverage long-term relationship and favorable pricing with lawyers such as Craig Sherman @ Wilson Sonsini, auditors such as Mike Bentley @ E&Y, or tax experts like Jeremy Skogsbergh @ PWC

HINT #1 RECRUIT ONLY A+ PEOPLE



HINT #1 RECRUIT ONLY A+ PEOPLE

HINT #2 ADDRESS MASSIVE & PAINFUL PROBLEM


400,000,000 pet dogs in the world X20% small dogs X $68.99 =

$5.5 Billion Market!$68.99 + tax

HINT #3 KEEP NARROW FOCUS


HINT #4 PEACEFULLY SOLVE INTERNAL PROBLEMS


HINT #5 SEEK ADVICE AND FEEDBACK


HINT #6 LEARN TO WORK WITH INVESTOR


HINT #7 CARE ABOUT BUSINESS PROCESSES


HINT #8 PAY ATTENTION TO COMPETITION


$68.99 + tax

HINT #9 IT IS NOT AN EASY WALK IN A PARK!


INVESTMENT PHILOSOPHY STRATEGY & PRIORITIES

We select projects were substantial value is createdthrough software engineering or other related domain ex-pertise

We aim to efficiently utilize the resources of existing portfo-lio and other related companies (e.g. Parallels, Acronis,Acumatica, 1&1/United Internet, etc.) – as an intellectualresource, technological partner and sales channel.

We look for projects with a high degree of ‘hard-to-clone’or ‘long-to-clone’, potentially patentable IP – as a naturalbarrier against competition and our team’s area of excel-lence.

We aim to invest on co-founder terms and prioritize proj-ects with sensible development and marketing timeframesand budgets, and clear breakeven points

We pro-actively enable growth of our portfolio investmentsthrough putting them into right business environment andproviding practical support/guidance in engineering, opera-tions, marketing strategy, finance and, ultimately, obtainingliquidity.

FOCUS ON KEYTEAM COMPETENCIES

PORTFOLIO SYNERGIESAND LEVERAGE

BARRIERS AGAINSTCOMPETITION

EFFICIENT USEOF CAPITAL

ENABLINGGROWTH


TEAM FOUNDING PARTNERS

Serguei BeloussovFounding Partner

Sergey advises on key deals includingNginx, DMS Technosoft and ECWID;value added to Runa:- International network- Technology vision- Entrepreneurial spirit

Ilya ZubarevFounding Partner

Ilya focuses on key deals, includingDnevnik, LinguaLeo and Eruditor;value added to Runa:- Deep operational experience- Deal structuring- Entrepreneurial spirit

1995-2000 2001-2005 2005-2009Serguei & Ilya founded SWSoft, later acquired Plesk and Parallels and re-baptized SWSoft toParallels. With over 1,000 employees and $150M+ revenue, the company is the market leader inAutomation for Cloud Service Providers, Container-based server and Desktop virtualization

Serguei & Ilya acquired assets that became Acronis, specializing in physicaland virtual data management and disaster recovery software, the company em-ploys 850+ people and generates over $150M revenue

Serguei & Ilya founded the consumerelectronics manufacturer; now thelargest in Russia with a $500M/yearTurnover

Serguei & Ilya founded the leading ac-counting and ERP software distributor

in SEA

Serguei & Ilya invested $800K in GFI, theprovider of a complete set of IT solutionsfor SMB. Investment is partly exited, with5x ROI and IRR 40%

Serguei & Ilya invested a total of $3M in

Au-tomatedQA provider of tools for managingsoftware development and testing. The in-vestment is partly exited with total

impliedROI in excess of 7x and more than 40% IRR


TEAM INVESTMENT PARTNERS


DmitryChikhachev

AndreBliznyuk

PeterBauert

• Business executive with 18+ years of broad cross-functional experience: CEO/COO in Uvenco (scaled from $0 to $25M in revenue), Head of international business development in Ritzio Entertainment Group ($600M revenue/$75M overseas operations), HR Director of LM Ericsson CIS.

• MSc Moscow Institute of Physics and

Technology (PhysTech), MBA American Institute of Business and Economics

• Dmitry’s investment focus is SMB cloud, complex SW, mobile

• Special expertise: M&A, Greenfield project management, HR management

• Investment and corporate finance professional

with over 10 years of experience: Goldman Sachs, UBS, Sistema. Over 20 IPOs and other fundraising projects for a total amount of tens of US$bn – including Mail.ru, Comstar, Sistema IPOs on the LSE.

• MA Moscow State University

• Andre’s investment focus is vertical markets + international opportunities

• Special expertise:• Financial sector• Investor relations• Public capital markets

• Finance and Operational executive with 20+ years experience. Recent roles include

CFO/COO at Parallels ($150M+ Revenue) and EVP at FAST (Acquired by MSFT for $1.3B).

• BS Computer Science + MBA (Dartmouth College - Highest Distinction)

• Peter focuses on cloud-solutions for SMBs, as well as North American opportunities

• Special expertise:• Tax structuring• Financial mgmt/reporting• Recruiting

WELCOME TO RUNA CAPITAL!

Email: [email protected]: @RunaCapital