OPVII AldusEquity

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Information about OPVII AldusEquity
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Published on October 1, 2007

Author: Arkwright26

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Slide1:  Executive Summary Open Prairie Ventures II, L.P. Limited Partnership Interest U.S. $125 million Harvesting Efficient Innovation TM Founded in 1999, Open Prairie Ventures raised a $40M venture capital fund to invest in early-stage technologies.:  Founded in 1999, Open Prairie Ventures raised a $40M venture capital fund to invest in early-stage technologies. Open Prairie Ventures I was raised with angel investors, family funds, and SBA-SBIC. Partnership invested in 15 early-stage companies in life science, information technology and wireless technologies. Managers: Jim Schultz, Michael Peck, Dennis Beard. HarbourVest Partners (Boston-based fund-of-funds with $24 billion under management) replaced SBA-SBIC position as Fund I LP on June 30, 2006. SBA-SBIC redemption: $20.4 million. Fund I LP base upgraded: Existing LP’s had option to take back 75% of contributed capital. Additional funding: Approximately $4 million of investment capital to Fund I. Implications: Removed the SBA from Fund I, added $24 billion limited partner to Fund I, consolidated LP base, and upgraded fund deal team. Transaction is consistent with philosophy of Fund II strategy. Open Prairie Ventures’ History “HarbourVest doesn’t generally invest in the Midwest, but made an exception because of the [Open Prairie Ventures] portfolio.” - Jeff Keay, HarbourVest Partners Open Prairie Ventures I sourced all 15 deals in the Midwest region and syndicated with “national” VC’s.:  96% of the deals funded were within 200 miles of the Open Prairie Ventures office. 14 deals were syndicated with other venture capital funds - Syndicated each dollar invested by Open Prairie by 6x, raising $188 million in aggregate. Open Prairie Ventures led 12 and was the co-lead on 2 of the initial funding rounds. Open Prairie Ventures I sourced all 15 deals in the Midwest region and syndicated with “national” VC’s. Open Prairie Fund I Performance Open Prairie Ventures I has created top tier investor value.:  $3,000,000 Semi-conductor $5,500,000 Information Tech $21,000,000 Information Tech $33,500,000 Medical $500,000 Medical $1,000,000 Photonics $3,000,000 Video Analytics $3,000,000 Medical Open Prairie Ventures I has created top tier investor value. iNest sold to IAC/InterActiveCorp (NASDAQ: IACI): Invested $750K, returned $3.1M (41% IRR). TomoTherapy filed for IPO on February 12, 2007. Targeting April/May IPO. Infoblox targeting significant liquidity opportunities (other co-investors or follow-on funding sources include: Sequoia Capital, Lehman Brothers, Baird Ventures). Eight unrealized investments currently valued at $35.6M* (70% above cost) and a projected exit value of > $70M. Fund I fair market IRR: 6.1%, Fund I projected IRR: >20%. Open Prairie Fund I Performance Projected Valuations Portfolio Statistics Created 1100 jobs 100 patents >$20,000,000 government funding Syndicated $188M Open Prairie Ventures II builds on team experience, strategic advantages and active deal flow.:  Open Prairie Ventures has a competitive advantage to proprietary deal flow. Fund II is an early-stage venture fund - focused on information technology, life science and wireless opportunities - using an Efficient Innovation™ model of investing in the Greater Midwest - a region ripe with entrepreneurial activity and technology innovation.   Solid team reputation and VC experience. Under funded region with high quality deal flow and low competition. A broad Midwest presence with wide regional access. Unique strategy that is consistent with prior funds. Focus on sourcing deals in Midwest where reasonable valuations persist. Strategy that leverages the Efficient InnovationTM methodology. Active involvement in portfolio. Pursuit of high quality entrepreneurial teams. Partnership has a traceable venture capital track record and experience forming VC funds. Seasoned team of private equity investors that have managed $57M of capital in prior and current funds. Current IRR: 6.1% Projected IRR: >20% Sample LP’s: HarbourVest Partners, Northern Trust Principals reviewed a combined 800-1000 deals per year in prior funds. Deal flow from: Associations (MHIN, ACG, NVCA), regional and national network, technology centers. Open Prairie Ventures II builds on team experience, strategic advantages and active deal flow. Fund II Target: U.S. $125M Fund. Upgrade to “institutional” LP base. Leverage experience of “wins” and “losses”. Strong and active deal pipeline. Open Prairie’s experienced Partnership has deep expertise and established reputations.:  Open Prairie’s experienced Partnership has deep expertise and established reputations. Jim Schultz (Managing Partner) 20 Year veteran of early stage investments and founder of Open Prairie Ventures I. Kellogg MBA, DePaul JD. Michael Peck (General Partner) Venture investing experience with Kansas Technology Fund. Operational and technology experience. Kellogg MBA. Dennis Beard (General Partner) Experienced CFO of Open Prairie. Entrepreneurial, operational experience. CPA and University of Illinois MBA. Fourth partner to be added at first closing. Deal team has significant operational and early-stage venture investing experience. Jim founded OPV and has been an investor for 15 years. Serves on four Boards, a bank board and two charity foundations. Previous services with Illinois Chamber. Michael completed 30 seed venture investments in prior fund. Named to Ingram’s “40 Under Forty” 2006 class. Active in Invest Midwest Venture Forum. Previous executive at two dot-com start-ups in California. Dennis has been CFO of OPV since 2000. Serves on 3 OPV portfolio boards. Adjunct Business Professor at University of Illinois. Previous investor and business owner. Partnership has worked together to buy out the SBA, add HarbourVest as an LP, harvest the Fund I portfolio and work to raise Fund II. Open Prairie Ventures will leverage our Efficient InnovationTM investment methodology:  Disruptions drive long-term growth. Occurs through combination of tech innovation and use of novel business models. IT, life science and wireless markets are particularly served by disruptions. Disruptive innovation trajectory places early-stage companies in advantageous positions to pursue incumbents. The combination of efficient capital and disruptive innovations creates an assessment framework for Open Prairie’s early-stage investment criteria. Source: The Innovator’s Solution: Creating and Sustaining Successful Growth; Christensen and Raynor, September 2003 Efficient Capital Open Prairie Ventures will leverage our Efficient InnovationTM investment methodology Midwest regional efficiencies allow the Partnership to drive low price entry into early-stage investments. Regional working-capital advantages reduce early-stage capital deployment needs. Low cost approach bolstered in an environment of fewer investors and reduced price inflation. Disruptive Innovations The Fund II strategy is consistent with the Principals’ prior experience of technology investing.:  The Fund II strategy is consistent with the Principals’ prior experience of technology investing. Sector focus - blended portfolio of technologies in: Information Technology – software, Internet, hardware Life Science – devices, healthcare IT, agriculture sciences Wireless Technology Projected total of 15 to 18 early-stage technology investments. Fund will pursue lead investments, syndication opportunities and active Board participation. Anticipated investment range of $3M to $8M per company. Allocations to ensure our positions in investments are protected Midwest region is conducive to an opportunistic approach and converging technologies. Focus on: Experienced entrepreneurial teams. Strict criteria of value pricing and efficient capital usage. Leveraging disruptive innovative technologies targeted at large markets. Fund II Profile Deal flow is sourced through established relationships, access to technology centers and proximity to innovators.:  Deal flow is sourced through established relationships, access to technology centers and proximity to innovators. Far reaching access based on the Principals’ regional and national relationships. Sequoia Capital National Venture Funds Ascension Health Baird Venture Partners Chess Ventures Chrysalis Ventures CID Equity Partners Duchossois Technology Ventures Endeavors Group Mayo Foundation Regional Funds Lehman Brothers Ventures Lurie Investments Stephens Group State of Wisconsin Investment Board Wisconsin Alumni Research Foundation Telecommunications Development Fund Cargill Ventures Venture Investors Seneca Partners Intel Capital Avalon Technology Focus Ventures Associations/Forums Innovation Centers National Venture Capital Association MidAmerica Healthcare Investor Network TiE – The IndUS Entrepreneurs MIT Enterprise Forum Invest Midwest Venture Forum BIO.org i2E - Oklahoma City Argonne National Laboratory, Rose-Hulman Institute, University of Chicago ,University of Illinois, Kansas State University, University of Missouri, University of Kansas, Northwestern University, Purdue University, Washington University-St. Louis, University of Wisconsin Jerusalem Venture Partners Highland Capital Strong regional presence and an imbalance of early-stage venture leverage Open Prairie’s advantage.:  Strong regional presence and an imbalance of early-stage venture leverage Open Prairie’s advantage. Disparate capital-under-management to GDP ratio of 0.23 in region (versus California ratio of 3.2 and New England ratio of 7.8). Regional imbalance in early stage venture funds. California: 53 Funds, $22.9B New England (4 states): 23 Funds, $7.7B Greater Midwest (14 states): 15 Funds, $1.5B Partnership views an opportunistic time to build a second fund in the Greater Midwest region. Source: PricewaterhouseCoopers MoneyTree Survey ; Thomson Venture Economic; National Venture Capital Association Multi-office Greater Midwest presence that provides far-reaching access in an underserved-venture region with deep entrepreneurial opportunities. Capital imbalance persists in the Midwest region. “Feet on the Street” “Go where others are not” The Partnership has an active pipeline of early-stage investment opportunities. :  The Partnership has an active pipeline of early-stage investment opportunities. Partial Fund II Pipeline Report Proprietary deal flow within 400 miles of the Open Prairie Venture’s offices. All list opportunities were unsolicited. Open Prairie Ventures is poised to proceed to the next step with Fund II.:  Open Prairie Ventures is poised to proceed to the next step with Fund II. Portfolio validation - Established General Partner track record. Fund I portfolio is well positioned to generate exceptional returns and has been validated by the HarbourVest transaction. Firm is fully operational - Portfolio and deal flow are actively managed by Jim, Dennis and Michael with offices in Illinois and Kansas City. Strategy remains valid - Lack of venture competition in the region, solid investment opportunities, reputation of Open Prairie team and Efficient InnovationTM methodology. Technology innovation in the region - Regional tech centers continue to increase focus on technology development and the recognition of the need for growth companies. Summary Drive toward first closing - Institutional partners that trust Open Prairie Ventures’ strategy. Northern Trust commitment for $3M (9/12/06). Goal: Complete $30M - $40M first closing in Q1/Q2, final closing by end of 2007. Expand deal team - Upon first closing, identified general partner candidate will be brought on board. Expand GP and LP Advisory Board - Partnership will continue to add high quality candidates. Next Steps Open Prairie Ventures - Team:  Open Prairie Ventures - Team J.M. “Jim” Schultz - Managing Partner President and co-founder of Open Prairie Ventures. Serial entrepreneur, operator, angel investor with 20 year veteran of early-stage investments. Personal investments in early stage ventures prior to Fund I yielded an IRR of 80% and an average realized return on investment of 5.0x. Prior fund board of director activities – Epiworks, MedVenture, TomoTherapy, ISSI, Kodeos. Operational Experience: Chairman and CEO of Physicians Clinical Laboratory. CFO of Agracel, Inc. Chairman of the Board of Prime Banc Corporation. Plays an active role in the Illinois business community: Served as the Chairman of the Board of the Illinois State Chamber of Commerce. Served on the Small Business Advisory Council of the Federal Reserve Bank of Chicago. Awarded the State of Illinois “Small Business 100” Award in 1996 by Governor Jim Edgar. Continues as the President of two charitable foundations that he started — The Cross Foundation and The Effingham County Community Foundation. Northwestern (Kellogg) MBA, DePaul Law JD, SMU Entrepreneurship. Open Prairie Ventures - Team:  Open Prairie Ventures - Team Michael Peck - General Partner Managed $17M portfolio at the Kansas Technology Enterprise Corporation (KTEC). Completed over twenty-seven transactions that included venture-ready technology and biotechnology investments, and economic development projects. 5 board director positions and 6 advisory roles in prior fund. Currently active on ISSI, Cernium, PanCel and kozoru (prior fund). Prior operational and entrepreneurial experience includes: Executive Vice President of Operations for C-Tribe, an Internet start-up in San Francisco - responsible for building the Company’s operational structure and raising angel and institutional venture capital. Executive Vice President with eCompanies, a business incubator in Los Angeles, and helped launch one portfolio company’s proprietary M&A platform. Manager of Accenture Strategic Management Consulting group in Chicago and San Francisco. Played an integral role in developing Kansas’ capital formation legislation and a statewide network of angel investors. Was the member representative to National Venture Capital Association and Mid-America Healthcare Investors Network. Served on the board for the Invest Midwest Venture Forum. Judge at the MOOT Corp business plan competition at the University of Texas. Co-hosts a local Kansas City radio show on entrepreneurship, leads the Kansas City Kellogg Alumni Association, Named Ingram’s “40 Under Forty 2006”, Board member for the Johnson County Library Foundation. Dual Degree - Northwestern (Kellogg) MBA, Northwestern Masters Engineering Management, University of Kansas – Engineering. Open Prairie Ventures - Team:  Open Prairie Ventures - Team Dennis Beard – General Partner and Chief Financial Officer General Partner and CFO of Open Prairie I. Serves on the Board of Directors of TomoTherapy. Adjunct Lecturer for the College of Commerce at the University of Illinois – finance for emerging businesses. Operational experience includes: Controller for SLM Instruments, Inc., a manufacturer of research instrumentation. Chief Financial Officer for Segno Communications, Inc., a provider of wireless communications products and services. Audit Manager for Pricewaterhouse Coopers, where he performed duties involving auditing, financial reporting, public stock and debt offerings, acquisitions, government compliance and SEC reporting for a range of clients including several Fortune 100 companies. CEO/CFO of Home Recovery Companies, a provider of home healthcare services in the Mid-Atlantic. Industry and Business Service includes: Service as President of Board of Directors of Virginia-based statewide home health providers industry association. Served as judge for multiple business plan and business simulation competitions for University of Illinois MBA program. Presentations on small business finance and venture capital for China Executive Leadership Program at the University of Illinois. Masters of Business Administration from the University of Illinois, Urbana-Champaign; and Bachelor of Science in Accounting from Millikin University, Decatur. Open Prairie Ventures - Team:  Open Prairie Ventures - Team Jason Wrone – Associate Early-stage operational management. Chief Operating Officer of an outdoor advertising company, Dusty’s Outdoor Media, LLC. Chief Financial Officer of a retail consumer rental franchise. Co-founded Fieldcrest Development, LLC, a real estate development company based in Champaign, Illinois. Operated an independent insurance agency business which he divested profitably in 2004. Eli Lilly pharmaceutical representative. Recipient of a Kaufmann Foundation Social Entrepreneurship Grant at the University of Illinois and was intimately involved with the Office of Strategic Business Initiatives (OSBI). Intercollegiate swimmer at the NCAA Division I level and was named both a Scholar Athlete and a captain of the team during his senior season. University of Illinois MBA –finance & entrepreneurship, Eastern Illinois Finance & Marketing. Open Prairie Ventures has leveraged a best-in-class deal screen and fund formation team.:  Open Prairie Ventures has leveraged a best-in-class deal screen and fund formation team. Ramez Naam Director, Microsoft MSN Search. Author: More Than Human. Recently published in March 2006 edition of Fast Company. Computer Scientist, Entrepreneur. University of Illinois - BS Computer Science. Dave Samuel Chairman, Grouper and Brondell. Grouper was recently sold to Sony for $65 million. Founder of Spinner.com (sold to AOL in 1998 for $320M). Red Herring “20 Outstanding Entrepreneurs under 35”. Other Advisors Pending – The Fund will add 3 to 5 additional members. Fund Legal Counsel: Ropes & Gray (New York) Co-lead by William McCormack and Morri Weinberg. Deal Sourcing and Screening Fund Formation TomoTherapy: Midwest efficient capital creates a low cost environment and attractive valuations.:  TomoTherapy: Midwest efficient capital creates a low cost environment and attractive valuations. TomoTherapy - Cutting edge targeted radiation treatment (IMRT) medical system to deliver conformal radiation therapy to cancer patients. Image registration allows the system to adjust patient radiation to account for changes in shape and position of tumor by comparing planning image with current image, thus delivering a much more effective treatment. Recognized as cutting edge therapy in cancer therapy. Awards include the “2005 Red Herring Top 100” innovative technology companies and the Frost & Sullivan “Radiotherapy Solutions Excellence in Technology Award”. Open Prairie’s early stage investment at pre-revenue, pre-FDA approval. Total invested - $3.4 Million plus $0.9 Million of limited partner co-investment. Current PEIGG value - $15.5 Million. 2005 revenues of $76 Million, 2006 revenue of $156 Million 2007 estimated revenue of $250 million. 10% global market share with a target of 20% - 25% by 2009. Exceptional growth - current enterprise value is $265 Million. Portfolio Update Filed for IPO to Raise $201.25M Open Prairie I Partnership projects return of $33.5M. Infoblox: Disruptive innovations, built in the Midwest, grown through collaborative partnerships.:  Infoblox: Disruptive innovations, built in the Midwest, grown through collaborative partnerships. Portfolio Update Infoblox - Develops and markets server appliances for identity management solutions for computer networks. Market leader in appliances for DNS, DHCP, authenticated DHCP, IPAM and RADIUS for identity driven networks. Recognized as leading information technology company. Awards include the “2006 Red Herring Top 100” innovative technology companies. Open Prairie’s seed investment developed company from University of Illinois-Chicago technology. Partnered with Sequoia Capital to grow company to next level. Total invested - 3.3 Million. Current PEIGG value - $8.6 Million. 2006 revenue of $28 Million (fiscal year – July 31) 2007 projected revenues of >$40M. Contact Information:  Contact Information J.M “Jim” Schultz Founder & Managing Partner Michael Peck Founder & General Partner For further information, please contact: www.OpenPrairie.com Open Prairie Ventures 400 East Jefferson Effingham, IL 62401 USA Jim@OpenPrairie.com Direct: 217.347.1017 Mobile: 217-821-9000 Office: 217-347-1000 Fax: 217-347-1001 Open Prairie Ventures 7300 West 110th St., Suite 700 Overland Park, KS 66210 USA Mike@OpenPrairie.com Direct: 913-317-1548 Mobile: 913-219-7860 Office: 217-347-1000 Fax: 217-347-1001 02262007

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