Maayan Ventures The Leading Incubator in Israel March, 2012

1. Maayan Ventures The Leading Incubator in Israel March, 2012

2. The Motivation The initial motivation for establishing the incubators by the Israeli government: • Encouraging growth of certain industries, developing high-tech industries • Decreasing dependency of certain areas in one industry (such as: automotive, steel, defense) • Increasing activities in “weak” sectors – poor population, development areas • Increasing cooperation between the Academia / Research Inst. and the industry – commercializing new technologies • Creating new employment opportunities, especially for new immigrants • The two main reasons for business failure of new start-ups are lack of managerial experience and funding problems. The incubators professionalize in these areas.

3. The Business Model • The main principle: leveraging government money for early stage venture capital investments. • Basic funding for each new company: $600K: • ~$500K (85%) is given by the OCS as a non-recourse loan that is returned from future earnings. • ~$100K (15%) is invested as equity by Maayan Ventures. • Maayan Ventures receives 40% of the company. OCS Maayan Ventures 85% - Non-Recourse Loan 15% - Equity Portfolio Company

4. PRIVATIZATION (2002) Technological Incubators in Israel • Established by the government in 1991 • Overseen by the Office of the Chief Scientist of Israel’s Ministry of Industry and Trade • After 7-8 years, became a government investment channel, and a decline commenced: • Economic depression, burst of the high-tech bubble • Regarded as “heavy” and bureaucratic government institutions • High failure rates of graduate companies

5. The Current Situation • 24 active technological incubators • 15 of them operate in peripheral areas • 23 are privatized • More than 200 companies / start-ups operate in the various incubators (at least 100 of them are new) • The total incubators budget during 2010 – 177M NIS • Since 1993 until today – more than 1200 companies graduated from the incubators • In 2010 there were 57 graduates – 68% of them managed to raise additional funds

6. Maayan Ventures • The largest early stage investment company in Israel • Two “incubators” franchises from the Office of the Chief Scientist of the State of Israel (OCS) enabling leverage of government funds • Over 30 portfolio companies in three main fields: Software, Medical Devices and Materials Rotem Ventures Industry and Materials Maayan Ventures Medical Devices Iris Ventures Software and IT

7. The Business Model • The main principle: leveraging government money for early stage venture capital investments. • Basic funding for each new company: $600K: • ~$500K (85%) is given by the OCS as a non-recourse loan that is returned from future earnings. • ~$100K (15%) is invested as equity by Maayan Ventures. • Maayan Ventures receives 40% of the company. OCS Maayan Ventures 85% - Non-Recourse Loan 15% - Equity Portfolio Company

8. Typical Investment Cycle 48 Maayan’s Holdings 20%<Maayan<40% M&A or EXIT 36 Reality Check Maayan invests only with lead third party Series B End of Incubator Period 24 Series A 18 15% Supplementary Funding by Maayan 85% Government Grant Seed Stage Maayan > 40% 0 Months What do we do to get there?

9. 1st Stage: Selecting The Right Companies Deal Flow Sources: Refer a friend Leading funds Tech transfer orgs Patent attorneys Maayan’s investors Due Diligence Technological Innovation Entrepreneurs Legal Financial • Internal Inv Comm • Leading professionals • Expert opinions from the field • Examining worthiness of investment Appointed examiner On behalf of the OCS – Government screening Process Incubatur Over 400 Opportunities per year Initial Screening Internal Investment Committee OCS Committee 5-10 companies enter the incubator every year

10. 2nd Stage: Providing Added Value • Close Accompaniment • Recruitment of Key Executives • Financial Backing • Business Development • Strategic Consulting • Administration Backing • Legal Services • Coaching Company Entering Maayan Incubator

11. 3rd Stage: Opening The Market • Door Opening • Exposure to Market • Connections with Relevant Players • Exposure to Strategic Partners • Leading Negotiation with M&A Partners • Legal and Financial Advice • Bringing Additional Investors

12. Strategy • Rich, balanced, high-quality portfolio • Focus on three market segments • Value creation while creating exits along the way • Deep involvement in portfolio companies • High-quality, professional and dedicated management • Low operational costs • Maintenance of high equity stake in key portfolio companies • Leverage of the connection with IDB and Infinity China • Social awareness - promotion of the Negev

13. Portfolio – Communications & IT

14. Portfolio – Medical Devices

15. Portfolio – Materials & Industrial Eq.

16. Key Portfolio Companies Industrial/Material Medical Devices Software/IT 37% 43% 34% Aespira Breathing New Life Into Healthcare 42% 35% 46% 46% 29% 48% 21% Major Holdings in Leading Companies

17. Gizmox • Gizmox has developed a unique transposition technology for complex enterprise software applications from client server architecture to new architecture of cloud/web/mobile/HTML5 • The company had completed the development for Microsoft Applications and is now developing its JAVA based solution • Team: • Navot Peled- Founder, CEO- vast experience in product marketing • Guy Peled- Founder, CTO- vast development experience in MS architecture • Itzik Shpizen- VP R&D • Doron Libstein- Chairman- Over 15 years at MS, founder of MSN Israel and Head of MS Europe • Major Achievements • Convertible loan and strategic agreement of $2.5m with Citrix • Two major agreements with Microsoft • The company is currently in advanced negotiation with a number of potential clients in the financial sector and others for applications transpositioning projects based on Gizmox technology

18. B-Nano • B-Nano is revolutionizing the microscope world - has introduced the first electronic microscope to operate in atmospheric pressure. This development has tremendous implications in the medical and metrology fields • Team • Dubi Shachal, Founder- Dr. of Chemical Physics from Weizman institute, Held senior management positions at Applied Materials as system engineer, development manager, and product manager of an over $1b revenues product • Rafi De Pichoto- Chief Physician, Dr. of Physics from Weizman Institute, over 10 years of research experience at Bell Labs in the US. • Major Achievements: • The company has signed a $4.4m NRE agreement with a Korean Company • Sales agreements with additional Korean companies as well as interest from international semiconductor companies • Entrance to the labs market by installations at major labs across the globe, specializing in life sciences and nano technology

19. The company is revolutionizing the hair transplant field- moving from the operation room to a Botox like procedure • There are over a billion people globally suffering from balding. The potential is huge, but has not materialized commercially with existing procedures due to high costs and poor results • Hair Esthetics offers a revolutionary procedure for “hair injection” which will enable every balding person to enjoy great results for low cost • Hair Esthetics is the first company to offer a multiple hair implementation procedure enabling the transplanting of a group of hair versus single hair line in a click of a button, making it the lowest cost, fastest, easiest procedure on the market. • The company has received a lot of interest from strategic partners and leading investment institutions: • Approval for clinical trials/ completion of clinical prototypes • Signed a TS after reviewing several from a leading investment fund at an up round valuation • Interest expressed from strategic partners such as AmorePacific (Korean Giant) • The Vision: Hair Esthetics will revolutionize hair transplant in the same way Botox has revolutionized wrinkles removal

20. Thank You