John Cook Executive Director – WJ Hopper & Co. Limited

1. Raising Venture Capital: An Entrepreneurial & GP/LP Perspective April 2 & 4, 2008 John Cook Executive Director – WJ Hopper & Co. Limited Chairman – Thunderbird Private Equity Center Executive Advisory Board

2. WJ Hopper & Co. Limited • www.wjhopper.com • Boutique Investment Bank – with global representation • London, Zurich, San Francisco, Brussels • Tokyo, Tel Aviv, Sao Paolo, Reykjavik • Focus: International Private Placements • Clients: Leading Private Equity Firms and Private Companies • Investors: Institutional, Government and Private Investors • John Cook: Purdue University BS; Thunderbird MBA; International Harvester, Merrill Lynch, Security Pacific Bank

3. What are effective strategies and tactics to raise capital, both for entrepreneurs and fund managers? Vision, strategy, tactics… and lessons learned…

4. Importance of Fundraising “Raising a new fund is an event of singular strategic importance for a private equity fund. The firm’s future is, in effect, placed into the hands of institutional investors…whose capital allocation decisions…are a key influence in shaping the private equity industry. These investors will, by choosing whether or not to participate in the fund, either provide a mandate for continued growth or cast a collective vote of no confidence from which very few managers will ever recover.” Source: “Fundamentals of Private Equity” - PEI 2008

5. Fundraising Ecosystem

6. Three Layer Cake (USA / EUROPE / ASIA / LATAM / MIDEAST) Sovereign Wealth Funds Banks Limited Partners Insurance Family Offices Corporations Governments Endowments Secondaries Foundations Pension Funds Fund of Funds USA / EUROPE/ ASIA/ LATAM/ MIDEAST General Partners CARLYLE GOLDMAN NEA CVC Portfolio Companies A H B G E F C D

7. Stakeholders Audit Regulatory Legal LPs Europe LPs ASIA Acct LPs USA LPs LATAM Advisor $500 MM Thunderbird Private Equity Partners GP=Cabrera Mgt LLC EXIT IPO TRADE SALE CUSTOMERS SUPPLIERS EMPLOYEES LENDERS A C E D B ENTREPRENEURS

8. Fundraising Process

9. Five Step Process Total Time 12-24 Months Strategy Formulation Pre-Marketing Marketing Road-shows DD/Closing Understand and articulate market opportunity • Initial formulation of fund strategy and tactics • Internal and external review and evaluation: resources, competition, market opportunity, team • General agreement on fund strategy, terms, team, process and documentation • Preparation of documents/DD material • Select key advisors • Work with advisors to create suite of documents. • Map universe of LPs, decide on who to approach and when and by whom • Finalize LPA, PPM, PPT, overview, diligence package, subscription agreements. • Develop communications strategy • Form new fund entity • Contact potential LPs and distribute Fund marketing material • Send overview / teaser to initial targeted parties • Send PPM to requesting parties • Set up conference calls or face-to-face meetings for road-show period • Complete LP Questionnaires • Invite LPs to visit HQ • On-site presentations and meetings with interested LPs • Various formats possible depending on size of team and geography: Individual visits to LPs combined into a tour or LP group invited to luncheon or other event hosted by GP • LPs with decision-making process move forward. • Due Diligence documents sent to LPs • LPs visit manager’s office • LPs agree to commitments • Communicate closings to remaining LPs Proceed with final closing process Begin to get signed subscription agreements Decision to Proceed Prepare to go to market Manage process and monitor feedback Identify and interview advisors Marketing strategy agreed Incorporate feedback from market Monitor objections, make refinement in process Begin investment process First, interim and final closings Retain Advisors, Form Team Completed Marketing Docs Face-to-face meetings with LPs Road-show set up with LPs

10. Documents Marketing Package Due Dilligence Package Overview Flip chart presentation Private Placement Memorandum • Subscription agreement • Summary of all contracts • Actual contracts (only if requested) • Names of advisors to the fund • Sample reports to investors • Estimated timelines • Asset allocations • Curricula vitae • Attribution analysis • Investment transactions • Management references • Pipeline of deals • Articles of incorporation • Risk mitigation

11. Private Placement Memorandum • Executive Summary • Investment Thesis and Rationale • Investment Strategy, USPs and Value Add • Sector and Geographic Focus • Investment Process, Diligence Process, Use of Debt, Exits • Team Members and Advisory Board • Track Record with Attribution Analysis • Deal Sourcing and Pipeline • Key Terms of the Fund • Risk Factors and Conflicts of Interest • Legal and Regulatory Matters • Appendices

12. Standard Limited Partnership Terms Objective = Alignment of Interests Fund name: Thunderbird Private Equity Partners LP Legal structure Delaware Limited Partnership Manager: Cabrera Capital Management LLC Fund size: $500 Million Minimum: $5 Million Term: 10 years + Two Extensions Management fee: 2% during investment period then declining Carried interest: 20% with 8% Hurdle Rate GP contribution: 2% of Committed Capital Co-investments: Yes for Large Commitments

13. Vision, Strategies • and Tactics

14. What is the Fundraising Vision? • To raise the right size fund • With the right team • With the right strategy • On the right terms • With the right mix of LPs • At reasonable time and cost

15. Strategic Questions • Blanket The Market Or Be Selective? • Geographic Target: Local, Regional, National, Global? • Types of Target: Corporate Venture, Active Passive, Govt? • Which Staff Should Undertake The Task? • Documents – Who, What, When, Where, How? • Selecting Advisors: Legal, Accounting, Communications • How Much Time and Money Will It Take? • Use Placement Agents Or Go It Alone?

16. What General Partners Need… • HIGH QUALITY, VALUE-ADD INVESTORS • Good Relationships with LPs • Strong LPs with Patience, Understanding, Insights and Trust • LPs with Sophisticated Approach to the Asset Class • Low Turnover of LP Investment Managers • Global Diversification of Investor Base • Value Added LP Base – Advisory Board Members, Co-Investors • No Interference in Running the Fund – Little Friction • Help with Exits, M&A Opportunities, Company Building • Help with Secondary Market for LPs Who Need to Sell

17. What Limited Partners Want? • DIVERSIFICATION, HIGH RETURNS, LOW RISK • Attractive Market Opportunity Over Long Time Horizon • Broad and Deep Pipeline of Deals – Systematic Approach • High Quality Team with Cohesion, Credibility, Balance, Stability • Prefer to Back Strong Teams – No One-Man-Band • Portfolio Diversification Across Sectors, Stages, Geography • Special Terms: Co-Investments, Technology Window, M&A or IPO Rights • Stable Investment Environment: Regulatory, Economic, Fiscal • Controlled and Manageable Risk Parameters • Clear Value Creation Strategy of the Team • Serial Relationship with GPs • Clear Exit Routes via M&A, IPO, Strategic Sales • Lower Fees – Equitable Risk Sharing

18. Target Investors – LP Decision Process • Insurance Companies = Institutional Model • Commercial Banks = Institutional Model • Investment Banks = Strategic / M&A / IPO • Pension Funds = Institutional Model • Corporate Investors = Strategic Drivers • Foundations = Opportunistic / Strategic • Endowments = Opportunistic / Strategic • Fund of Funds = Institutional Model • Governments = Strategic / Social Objectives • Private Investors = Opportunistic / Personal

19. Sovereign Wealth Funds: $2.5 Trillion Problem • Abu Dhabi Investment Authority $875 billion • Government Pension Fund of Norway $350 billion • Government of Singapore GIC $330 billion • Saudi Arabia $300 billion • Kuwait Investment Authority $250 billion • China Investment Corporation $200 billion • Singapore Temasek $159 billion • Stabilization Fund of Russia $158 billion • Canada Pension Plan $119 billion • Australian Government Future Fund $ 61 billion • Qatar Investment Authority $ 50 billion • Alaska Permanent Fund $ 40 billion • Libyan Investment Authority $ 40 billion • Brunei Investment Authority $ 30 billion • Korea Investment Corporation $ 20 billion • Malaysia Kazahana National $ 18 billion

20. Wrong Attitude • This is a Piece of Cake • My Fund Was Made In Heaven • Every LP Will Want My Fund • Raise as Much Capital as Possible • This Will Take No Time At All • LPs Are Real Dummies • Target All LPs Of All Types In All Categories Everywhere • No Need For Personal Visits • No Need For Professional Advisors

21. Right Attitude • My Fund Must Have Its “Issues”And Problems • Only A Few LPs Will Be Interested In My Fund • Better To Pace Myself, Do This In Stages • Work My Network Personally • This Will Take 5 Times Longer Than I Planned • This Will Cost 5 Times More Than I Planned • LPs Are Pretty Experienced Folks • Target Specific LPs Of Specific Types • Be Prepared For Travel • Good Advisers Add Value

22. Fundraising Trends

23. Big Picture • Explosion of Private Equity Globally • Greater Acceptance of Asset Class by Stakeholders • Larger Fund Sizes, Larger Institutional Allocations • Top Firms Produce Best Returns - Persistence • Growth of Secondary Market – but at a price • Greater Sophistication at GP and LP Levels • More Transparency, Better Investor Relations • Standardization of Terms & Conditions • Greater Value Added Role of GP • Better Governance and Regulatory Environment • Better Risk Measurement and Control • However --- Much More Criticism of the Industry

24. Current Environment • Buyout boom of 2003-2007 has come to an end (or paused) • Buyout firms paid too much for deals at the 2006-2007 peak • Debt market closed for larger deals, more equity to complete deals • Recession is fully underway – may be long recovery • Dollar at all time low and dropping • Mortgage market in turmoil with subprime mess • Stock markets increasing volatility • Financial sector Bear Stearns, UBS, Merrill Lynch, Northern Rock • Sovereign Wealth Funds coming on stream big time • Fed and White House taking emergency steps to provide stability • AND YET --- private equity allocations are increasing!!

25. Popular Sectors / Trends • Traditional: TMT, Life Sciences, Healthcare • Mid-Market Buyouts / Expansion / Growth • Specialized: • Clean Tech Sector • Energy: the hydrocarbon problem • Infrastructure: electric grid, telecoms, ports, transportation • Emerging Markets: BRICS + N11 • First Tier: India, China, Central & Eastern Europe • Second Tier: Latin America, CIS, Middle East, Africa • Increasing Interest in Venture & Growth versus Buyouts • Globalization / Regionalization Opportunities

26. Predictions for 2008 • Slow Down in Mega Buyouts (credit crunch/recession/falling markets) • Pick Up in Late Stage Venture & Other Sectors (less leverage) • Non-US Markets to Stay Strong (less mature, still growing) • Secondaries & Distressed =Strong Growth, Tighter Pricing • Sovereign Wealth Funds & Petro Dollars Make Bigger Splash • Think Contrarian - Take Advantage of the Carnage • Biggest Challenge: Build the Case for Value Add • Greater Convergence of Asset Classes Source: Dow Jones Private Equity Analyst “Review & Outlook”

27. Survey of Institutional Investors : 2008 • Plans to Increase / Decrease Allocations: • 78% plan to maintain or increase allocations to private equity • 22% plan to reduce or terminate allocations to private equity • Areas of Increasing Interest: • Distressed debt, mezzanine, secondaries, co-investments, venture capital, growth equity, small and mid-market buyouts, cleantech, China, India, Russia, Western and Eastern Europe, Latin America • Biggest Areas of Concern: • Credit crunch, economy, recession, exit markets, massive fund sizes, manager selection, tax law changes Source: Dow Jones Private Equity Analyst “Review & Outlook”

28. Where Does The Money Flow? Institution type and geographical split of investors in private equity funds Source PEI: 1600 active LPs worldwide

29. Sector Allocations: Who Gets Most? Top 50 US pension fund’s current average allocation breakdown by fund type. Source PEI: 1600 active LPs worldwide

30. Regional Allocations: PE Stays Close to Home Global plus North America, Europe, Asia/Pacific based LPs average geographical split of Investments Source PEI: 1600 active LPs worldwide

31. Source: Probitas Partners

32. Source: Probitas Partners

33. Source: Probitas Partners

34. EMPEA’s 2007 fundraising statistics show that private equity funds investing in emerging markets raised US$59 billion in fresh capital in 2007, a 78% increase over the US$33 billion raised in 2006. Fund sizes broke records, with 19 funds raising US$1 billion or more. The average size of closed funds grew dramatically, from US$272 million in 2006 to US$426 million in 2007. Source: Emerging Markets Private Equity Association

35. Source: Emerging Markets Private Equity Association

36. Source: Emerging Markets Private Equity Association

37. 2007 REVIEW & 2008 OUTLOOK – USA Changes in Capital Commitments Source: Dow Jones Private Equity Analyst

38. Lessons Learned: Tips & Tricks

39. The Marketing Push • New LP Relationships are the Hardest to Cement • Start Pre-Marketing Two Years Ahead of Fundraising • Be Prepared for the Long Journey! • Assemble All Documents Before Fundraising • Document Everything, Especially Track Record • Get Local Anchor Investors in First • Think of Every Question Ahead of Time • Designate One Senior Partner As Point Person • Brief Your References, Keep Them Informed • Use Professional Advisors • Use Technology – Video OK – But Face to Face Better

40. The Marketing Push • Determine Priorities: Close To Home LPs First • Leverage Your Secret Sauce: Why Are You Unique? • Spoon Feed LPs What They Need – No Big Push • Use of Virtual Data Room • Learn From Each Presentation: Adopt and Adapt • Do Not Push LPs for Early Decisions (Court a Negative) • Deal Attribution Critically Important • Track Record Is 90% of the Game – Present it Well! • Answer Each LP Question Carefully • Must Involve Most Senior Team Members • Must Have “Market Terms” (For Your Fund-Type)

41. The Marketing Push • Keep in Front of LPs – Send Stuff Regularly • Must be a Good “Fit” with LP Strategy and Timing • Talk About the Mistakes and Lessons Learned • Show Succession Plan is in Place • Think Long Term -- Ten Year Marriage • Be Anecdotal, Personal Relationships Matter • Two Way Conversation – Learn to Listen and Question • Lighten the Atmosphere – Be Relaxed • Send Thank You Notes for Meeting and Advice • Get used to it -- Fundraising is a Life Style!

42. Conclusion: What it Takes? • Takes Time – 12-18 months to raise new funds • Takes Skill – It is an art, not a science • Takes Luck – External events impact success • Takes Money – $1 million per launch • Takes a Team – Cohesive, hungry, smart, dedicated • Takes a Story – who, what, how, when, where, why • Takes Persistence – Must turn over many rocks!

43. Happy Ending: Thunderbird Private Equity Partners Closes Fund at $600 million… 20% Over-Subscribed!

44. Thank You! john.cook@wjhopper.com