October 20, 2015

Caroline PanTechnology Advisor & Angel Investor

Access to Finance

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Tremendous demand for start-up capital in China in the sub-$500,000 range as China’s entrepreneurs seek capital to grow their innovative startups

Strong Demand

Lack of sufficient value-adding angel investors, larger VC/PE funds focused on later-stage opportunities

Limited Supply

Funding gaps in the China start-up environment…

Institutionalized angel investing is just beginning in China, with AngelVestrepresenting the largest, most diverse and international angel group in China

No Institutionalized Angels

Lack of effective government incubators…

Entrepreneurs in need of mentorship…

• Often, young entrepreneurs lack broad business skills and perspective

• Entrepreneurs many times focused on product or technology

• Entrepreneurs can benefit tremendously from the right mentorship

Providing a combination of capital and mentorshipto help entrepreneurs grow their businesses

China

US2010 Reported Figures

Angel VC

$28B$19B

$7B

$144B

$16B

PE

< $1B

US: VC is only 1.5X more than Angel

China: VC is 7X more than Angel…

Room for growthIn China…

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8+ years since organization was founded

100+ members with senior-level experience

4 cities: Shanghai, Beijing, Hong Kong, Singapore

2,000+ business plans reviewed

30 companies funded to date

Deals By Sector

19%

14%

14%11%

9%

8%

7%

5%

5%

4%

3% 2% e-commerce

B2B

Mobile

Education

SNS

Other

Health

Media/Advertising

Finanical services

Technology

Cloud

Travel

“The largest organized

angel and cross-border investment group

in China”

Established in 2007, AngelVest was founded with the

mission to help its members invest in compelling

early-stage businesses in China and in global special

situations opportunities (e.g., outbound)

56%

22%

18%

6%

8%

2%2% 2% TMT

VC/PE

Consulting

Other FinancialServicesLegal

Executive Search

Education

Membership Demographics

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Strategy

Focus on seed and early-

stage companies in non-

capital intensive industries

with high-growth potential,

high quality management

and demonstrated value

proposition

Sectors

TMT, Consumer Retail, Clean-

tech, among others including

traditional non-tech

industries

M&A

Achieve sale to strategic

acquirers either from

domestic or international

Partial Exit via Future Funds

Sell (partial or all) existing

shares to future VC/PE

investors

Initial Public Offering

Pursue IPO with help of local

or international underwriting

and investment banking teams

Investment Strategy

ExitStrategy

Mentorship

Provide portfolio companies

guidance and mentorship,

providing them with strategic

thinking and other resources

Other Value Add

Provide vast network of

relationships & experience

through AngelVest Group

members in regards to

business development, hiring,

financing for future funding,

among others

Mentorship & Operational Experience

http://www.angelvestgroup.com/

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Caroline Pan

• China-based Technology Startup Advisor & Angel Investor• Active member of AngelVest and mentor for Chinaccelerator• Industry expert for Gerson Lehrman Group and Frontier Strategy Group• Former Global VP, Emerging Markets @ Hewlett-Packard, PC/Printing Group• Former Senior Director, China Strategy Office @ Intel Corporation• 20 years operating experience in automotive & high-tech sectors• 10 years on the ground in China

Feel free to contact me via:• LinkedIn: https://cn.linkedin.com/in/carolinepan• WeChat: caropan• Email: caropan@yahoo.com

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Backup Slides

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Funding Criteria for Different Asset Classes

Angel Venture Capital Private Equity

Stage Early, pre-VC stage Post-early to growth stage Growth stage to pre-IPO

Funding Range US$50K – 1M US$2M – 5M US$5M and higher

Key Criteria

(not exhaustive)

Team and relevant backgrounds

Product or service, and business model

Market size and competitive advantage

Execution and capital efficiency

Has good potential to become dominant player

Risk factors of future funding

Established team

Proven product or service

Demonstrated market and Customers

Strategic partnerships

Evidence of scalability

Revenues and plan for profitability

Funding requirements to monthly cash flow breakeven

Established company with full team, product, market penetration

Evidence of good revenue growth and profitability

Can achieve exit (IPO or M&A trade sale) in the 12-18 month timeframe

History of funding emphasizing capital efficiency

Recommendations for Seeking Angel Funding

Conduct Research

• Understand the market, competition, and policies

• Analyze research in context of specifics regarding your company

Develop Strategy and Goals

• Develop China strategy and entry plan based on research and company positioning

• Articulate goals and milestones

Seek Funding

• Prepare investor materials

• Identify the right potential investors

• Meet potential investors through networking and introductions

Develop Execution Plan

• Develop execution plan and continually update

• Identify and acquire resources needed especially team and capital

Success in Fund Raising is achieved after a solid understanding of your own positioning…