Skolkovo Innovation Center

1. Skolkovo Innovation Center Verona, October 2011

2. Current Russian Situation • The “Gap”: • Research not linked to market • Little early-stage financing or services • Result: little commercialization Private Equity IPOs Large Corporates Commoditization of Technology Technology maturity / market acceptance Entrepreneurs VC Mid Early Basic Research Applied Research Late Time

3. Skolkovo Ecosystem Goal: Close the Gap with Tools for Efficient Commercialization Core Elements Large Corporates Commoditization of Technology Skolkovo Institute Technology maturity / market acceptance • Innovation Center • 5 clusters • Technopark • R&D Centers Entrepreneurs VC Mid Basic Research Applied Research Early Late City Infrastructure Time

4. The Mission of Skolkovo Skolkovo is a strategic development initiative designed to: Diversify and Grow the Russian economy through innovation and entrepreneurship Fully-Integrate Russian science and technology into the global economy Develop human capital through world-class research and education Create globally-competitive knowledge-based companies

5. What is Skolkovo? Skolkovo Innovation Center is to become an innovation hub that will stimulate innovative entrepreneurship • Focused on building an innovative ecosystem and populating it with start-ups • Total Skolkovo Center will have 31,000 employees and 21,000 residents • Innovative ecosystem developed for 3 communities – Skolkovo Institute of Science and Technology (SkiTech) in cooperation with MIT (1,200 students, 500 professors and PhD’s), R&D centers of blue-chip corporations (~50) and start-ups (~1,000) • Skolkovo campus operating as a nearly tax free economic zone (no profit tax, no VAT, reduced social tax rate) Skolkovo Foundation is a development agency focused on growing high technology companies in Russia

6. What Skolkovo is, what Skolkovo is not We are not an investment fund; we do not invest, take equity stakes or board seats We do not finance production or advanced commercial operations We are not a sales agent We are not limited to only Russian technology ; in fact our mandate is to enhance 2-way tech transfer We provide financial grants We are not-for-profit We finance and support R&D and early-stage companies We are a platform for international collaboration in R&D and technology transfer We support and finance innovative R&D and technologystart-ups

7. Key advantages of becoming a Skolkovo resident 1. Increase your capital efficiency: a) Tax benefits (No profit tax, no VAT, 14% Social taxes) b) Apply for non-dilutive financing from the Skolkovo Foundation 2. Enjoy lower administrative burden: a) Quota-free recruitment of foreign employees b) No import duties on hi-tech equipment 3. Technopark services: a) Access to Centers of Shared Facilities and Applied Research Centers b) Consulting services (accounting, legal, intellectual property, business trainers services) 4. Obtain better access to markets: a) Tight links to global leaders (= information on future technology requirements) b) Help in accessing international financial markets 5. Information and PR support

8. Resident status assignment Applicant Skolkovo Foundation Expert Board Registration on the website: http://app.i-gorod.com Application evaluation on formal grounds Consideration by Expert Board 1 2 3 10 Experts selected randomly from the database in the relevant research area (currently 571 experts) • Criteria: • Completeness of documents; • A legal entity founded in accordance with the legislation of the Russian Federation; • Fits cluster priority areas (available at Skolkovo website). • Criteria: • Competitive advantages over worldwide benchmarks; • High potential of commercialization; • Technical feasibility; • Project team has knowledge and experience for success. Filling out an electronic form ~ 20 days

9. Fast and transparent grant-making process Investment Office Applicant Grant Committee Relevant Cluster Reviews project and prepares Grant Committee recommendations Submit Document Package Makes Grant decision (and/or required project changes) Prepares document package for Grant Committee 3 1 4 2 • 10 committee members including 5 independent; • 2 times a month in-person meetings; • Applicant participates in project presentation • Selection Criteria: • Skolkovo residents only; • Convincing business case (market potential; enterprising team) • Co-investor • External technical expert review; • Market review; • Use of funds review; • Review of team and technology • Investment Memo; • Project Execution Plan & Timetable; • Financial Plan; • Technical Description ~ 2 months

10. Key corporate partnership activities Key Partners – industry leaders typically create and operate an R&D center in Skolkovo, co-invest in promising Skolkovo start-ups or offer early commercialization opportunities to Skolkovo startups Strength of Relationship Regular venture activities Regular research activities Equity &/or R&D collaboration with start-ups Company type of business in Skolkovo Current status: 9 R&D centers with total no. of employees of ≈ 540, budget of ≈ $200M Current status: 26 start-ups supported, the sum of attracted investments is about $42 million Current status: Volume of corporate venture investments is $30 million Character of collaboration with Skolkovo • Information exchange regular protocol • Investment processes coordination • Physical placement in Skolkovo • Participation in project management • Systematic joint legislative initiatives • Lobbying (GR) • Standard Skolkovo procedures

11. Skolkovo Value Proposition for key partners Seeing corporations as a major vehicle to build and launch “ecosystem” mechanisms, Skolkovo is tailoring its value proposition as an answer business long-term needs and concerns. • Alignment with business strategic issues • IP Protection • Ensuring demand • Strategic business promotion hub • Education • HR • Research • Start-ups infra • Connecting to ecosystem • Cross border (monetary, customs, visas) • Facilities (living, transport, telecoms, etc) • Infrastructure • Tax benefits • Co-financing with Skolkovo • Incentives

12. Key partners International companies Russian companies

13. Key results achieved Executive summary as of 20 October, 2011: • Preselected 204 start-ups as residents of the free economic zone • Grants for $150 million approved • Agreements with 18 venture funds for $234 million of co-funding have been signed. • Agreements on creation of 9 corporate R&D centers signed: 540 people, total budget over $200 million