US-Poland Innovation Week19 November 2014

Top performance through backing leading entrepreneurs

1

CONFIDENTIAL 2

• Established in 2000 with operations in London, Palo Alto and Berlin

• 60+ years of combined investment experience

• €239 million raised across 3 funds, investment in over 50 companies since 2000

DN is an early-stage and growth technology investor with top quartile performance

• 2012 vintage

Fund 3€144m raised

• 2008 vintageFund 2€47.5m

• 2001 vintageFund 1€47.5m

Portfolio HighlightsExit Highlights

Seed investment

CONFIDENTIAL 3

DN is a leading investor in consumer and enterprise technology across Europe and the US

Acquired by Acquired by Acquired by

Acquired by Acquired by

Seed with David Sachs

& Joe Lonsdale

Seed with Fabrice Grinda

with

Seed investment

with

DN led with

Acquired by Acquired by Acquired by Acquired by

DN led with DN led with DN led with DN led with

Invested with Invested with

DN led Seed investment

DN led with

DN led withCore geographies

Prospective geographies

Exits

DN led with DN led with

DN led with Acquired by DN led with DN led with

DN led with

Acquired by

Seed investment

Seed Investment

with

DN led with

DN led with

DN led with

DN led with

4

Before starting… ALIGN OBJECTIVES

Three VERY different types of Venture Capital

Scientific Discovery

[example – Magnetic resonance imaging]

Capital Appreciation

[use – bail out underfunded pension plans]

Cocktail Party Conversation

[Snapchat, Twitter, Facebook]

How to Create a Vibrant Venture Capital Ecosystem

5

(1) Role of government

Don’t: Provide direct funding to start-ups

Do: Fund really, REALLY hard problems for Universities to solve

Required Reading:Secret History of Silicon Valley by Steve Blankhttp://steveblank.com/secret-history/

How to Create a Vibrant Venture Capital Ecosystem

6

(2) Role of tax authorities

Don’t: Provide tax breaks for general start up investing

Do: Reduce capital gains for entrepreneurs, particularly if they do another start-up

Defer capital gains tax for serial investors

How to Create a Vibrant Venture Capital Ecosystem

7

(3) Role of employment laws

Don’t: Change the law to make it easier to be an entrepreneur

Do: Change the law to make it easier to hire and fire fast

How to Create a Vibrant Venture Capital Ecosystem

8

(4) Role of universities

Don’t: Encourage professors to leave to do start-ups

Teach theory of entrepreneurship from non practitioners

Do: Encourage Graduate Students to start companies

Facilitate IP transfer

Encourage professors to consult for start-ups

Required Reading:Notes from Peter Thiel’s 2012 course at Stanfordhttp://blakemasters.com/peter-thiels-cs183-startup

How to Create a Vibrant Venture Capital Ecosystem

9

(5) Role of lawyers

Don’t: Focus on protecting down-side

Do: Focus on finding ways to get things done fast

How to Create a Vibrant Venture Capital Ecosystem

10

(6) Role of first time founders

Don’t: Take wild risks

Consciously decide to be an entrepreneur

Do: Start a business that other people think are risky but that you can make less risky

Something to solve what keeps you up at night

How to Create a Vibrant Venture Capital Ecosystem

11

(7) Role of successful founders

Don’t: Try to be an angel investor

(at least not immediately)

Do: Encourage your best lieutenants to set up new companies

Give back to the community through teaching

How to Create a Vibrant Venture Capital Ecosystem

12

(8) Role of large enterprises

Don’t: Change your business processes for “Intrepreneurship” or “20% time”

Do: Encourage your most entrepreneurial employees to LEAVE (for now…)

Acquire based on strategic importance not financial multiples

How to Create a Vibrant Venture Capital Ecosystem

13

(9) Role of acquirers

Don’t: Acquire businesses to enter new geographies

Do: Acquire businesses to enter new markets

Encourage your corporate development team to work with (or eventually join) investment firms

How to Create a Vibrant Venture Capital Ecosystem

14

(10) Role of investors / venture capital firms

Don’t: Hire people from buyout firms, accounting firms or public investors

Do: Hire from industry: engineers turned product managers turned leaders

How to Create a Vibrant Venture Capital Ecosystem

15

Five general comments

• Don’t be afraid to do a “copycat” business… but do improve on what is already there

• Three part role of the Venture Capitalist, regardless of geography:

• Build ties across geographies – most of the acquirers will NOT be domestic

• Think like the next person up and down the food chain:

• Have fun, always be learning, and like who you see in the mirror

How to Create a Vibrant Venture Capital Ecosystem

Customer Entrepreneur VCLimited Partner

Capital Source

Selection Anointment Governance

CONFIDENTIAL

Contacts

Authorised and Regulated by the Financial Conduct Authority

DN Capital (US) Inc.

2882 Sand Hill Road, Suite 210Menlo Park, CA 94025

United States of AmericaTel: +1 650 561 9300

info@dncapital.com www.dncapital.com

Nenad MarovacManaging Partner

Tel: +44 (0)20 7340 1602 nenad@dncapital.com

Steve Schlenker

Managing PartnerTel: +1 650 561 9300 steve@dncapital.com

DN Capital (UK) LLP

2 Queen Anne’s Gate BuildingsDartmouth StreetLondon SW1H 9BPUnited Kingdom

Tel: +44 20 7340 1600Fax: +44 20 7340 1601

The information above is issued by DN Capital (UK) LLP which is authorised and regulated in the United Kingdom by the Financial Conduct Authority. It does not constitute an offer for limited partnership interests in DNCapital – Global Venture Capital III, LP (“GVC III”). For full particulars of GVC III, prospective investors should refer to the private placement memorandum related thereto (the “PPM”). The contents above are incomplete andabbreviated, more detailed information is set out in the PPM, which may be made available to qualified investors upon request.