NEEDHAM GROWTH CONFERENCE - 180 Degree Capital Corp.€¦ · including but not limited to the risks...
Transcript of NEEDHAM GROWTH CONFERENCE - 180 Degree Capital Corp.€¦ · including but not limited to the risks...
TRANSFORMING THE FUTURE
NASDAQ : TINY
FIRST. TRANSFORMATIVE. PROVEN.
NEEDHAM GROWTH CONFERENCE
SAFE HARBOR STATEMENT
This presentation may contain statements of a forward-looking nature relating to future events. Statements contained in this presentation that are forward-looking statements are intended to be made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company’s current beliefs, and a number of important factors could cause actual results to differ materially from those expressed herein. Please see the Company’s Annual Report on Form 10-K, as well as subsequent filings, filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company’s business, including but not limited to the risks and uncertainties associated with venture capital investing and other significant factors that could affect the Company’s actual results. Except as otherwise required by Federal securities laws, Harris & Harris Group, Inc. undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.
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HARRIS & HARRIS GROUP
• NASDAQ: TINY
• NAV/Share: $3.85(1)
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(1) NAV/Share as of September 30, 2014
CORPORATE MISSION
Harris & Harris Group Builds Transformative Companies
from Disruptive Science
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COMPANY HIGHLIGHTS
• 30-Year History Building Companies
• Holds Equity in Over 20 Transformational Companies
• Value Not Yet Realized
• Focused Strategy for Accelerated Growth
• Strong Interdisciplinary Team
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Invest
Build Value Return
BUSINESS MODEL
Evergreen Structure Facilitates Growth
• NAV Growth • Company Building • Board Participation • Partnerships
• Early Stage • BIOLOGY+
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Liq
uid
Early-Stage, Active Involvement
Late-Stage Passive Involvement
Illiq
uid
Investing in Disruptive Science
OUR COMPETITIVE POSITION
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Public VC Firms
Public Holding Companies
Private VC Firms
WHY EARLY-STAGE
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• Opportunity to Generate Outsized Returns
• Addressing Unmet Needs of S&P 500 Corporations
• Limited Competition
• Ability to Influence Company Strategy & Execution
Unique Skillset for Investing in BIOLOGY+
RECOGNIZED LEADERSHIP IN EARLY-STAGE
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#1 Venture Capital Investor in High-Technology
As measured by GrantIQ’s SBIR Source in February 2014: www.sbirsource.com/sbir/investors
Interdisciplinary innovation is required to address these healthcare challenges.
HEALTHCARE TECHNOLOGY
SOLUTIONS BIOLOGY
Electronics
Physics
Materials Science
Chemistry
IT
Engineering
Mathematics
DISTINCTIVE APPROACH
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BIOLOGY ENABLES H&H PORTFOLIO COMPANY
Engineering Single Cell Analysis
Physics Non-Invasive, High-Resolution Imaging
Mathematics High-Quality
Molecular Diagnostics
Material Science Targeted
Bio-Compatible Drug Delivery
Electronics Personal Genomics
Analytics Protein Structure
Analysis
A DECADE OF BIOLOGY INVESTMENTS
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WE HAVE EXPERIENCE BUILDING COMPANIES
(Amgen, 2011) (NASDAQ:SZYM, 2011)
(CordenPharma, 2013)
(Asahi Kasei, 2011)
(Carl Zeiss, 2013)
Xradia Ancora
BioVex Crystal IS Solazyme
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(Canon, 2014)
Molecular Imprints
Examples of recent Biology+ exits
A PORTFOLIO IN THE RIGHT AREAS
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HZO
UberSEQ
TARA
Mersana Promuc
AgBiome
Enumeral
Nantero
Adesto
Metabolon
EchoPixel
D-Wave
Quantum Computing
Deep Learning Regenerative
Medicine AgTech
Immuno-Oncology
Microbiome Internet of Things
Clean Water
ABS
PWA
METABOLON
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Metabolon’s mission is to provide researchers and health care providers unparalleled, actionable knowledge of the phenotype to prevent, diagnose and treat disease quickly and accurately.
Molecular phenotyping actively measures disease-related changes suggested by genomics, as opposed to merely measuring a genetic predisposition or assessing risk of disease.
DNA RNA
Risk of Disease Genes suggest what might be
Actionable Information
to prevent, diagnose & treat disease
Proteins Small Molecules
Disease Treatment and Mechanism
A cornerstone of human health
METABOLON: A CORNERSTONE OF HUMAN HEALTH
Personalized Medicine
NGS monitoring technology
Diagnostics & biomarker discovery
Began IEM screening Sign up 10
concierge clinics 25 clinics 50+ clinics
2014 2016 2015 2017
• Fewer diagnostic panels needed • More cost-effective • Greater impact & better health
outcomes
UK Italy France
China Target group centers:
Harvard Partners UCLA
Mayo Clinic Stanford
Clinical standard of care – individualized care reaches every patient
METABOLON: PERSONALIZED MEDICINE
Metabolomics becomes the monitoring technology for next-gen sequencing and must-have insight to phenotype
Signed agmts with major organizations
NGS/WGS projects
Expand globally
(esp. Pacific Rim)
2014 2016 2015 2017
CTTV Genomes BC
Chan Soon-Shiong Inst. Major acad. centers:
Broad/MIT GWU UWA
METABOLON: NEXT GEN SEQUENCING
New diagnostic tests become a major player in preventing and treating metabolic disease
Signed agmts with leading clinical labs &
organizations
LDT partners Regulatory
submissions Quantose IR –
CE mark accuGFR (LDT)
Quantose IR FDA approval &
CE mark Quantose IGT –
CE mark Fatty liver (LDT)
Quantose IGT regulatory approvals
Metdia Biotech
2014 2015 2016 2017
METABOLON: DIAGNOSTICS
METABOLON
• Leader in Metabolomics: 3,000+ Studies, 60+ Patents, $96+ Million Cumulative Revenue
• 2013 Released Three Diagnostic Tests Targeting Diabetes & Cancer
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Actionable Diagnosis
• Initial Investment: 2006
• Capital Invested: $ 7.2 Million
• Voting Ownership: 10-15%
• Late Stage
Metabolomics Measure
Disease Status
DNA
RNA
Proteins
Disease/ Treatment
Mechanism
Biochemicals
Genetics Show Disease Risk
D-WAVE
Founded in 1999
Raised over $130M in venture funding and
government grants since incep2on
Premier First Customers
High margin, high growth system sales, service and cloud services business
100 US patents granted; over 60 scien2fic papers published
D-WAVE: WHY BUILD A QUANTUM COMPUTER?
• Solve high-value commercial and scientific problems that can’t be solved today
• Solve complex problems orders of magnitude faster
• D-Wave has demonstrated 10,000 – 100,000x speedups
D-WAVE: MISSION
D-‐Wave helps solve the most challenging computing problems in the universe.
Mission planning
Cancer research
Systems Optimizatio
n
Anomaly detection
Search for exoplanets
D-WAVE: THE MOST ADVANCED QUANTUM COMPUTER IN THE WORLD
10,000
1,000
100
10
1
Number of
Qubits
D-Wave One 128 qubit
D-Wave Two 512 qubit
28 qubit
16 qubit
4 qubit
2002 2006 2010 2014
D-WAVE: RANKED FOURTH IN PATENT POWER FOR COMPUTER SYSTEMS BY IEEE
D-Wave patents cover broad range of domains
• superconducting qubits
• quantum processor • magnetic shielding • cooling • software • algorithms
D-WAVE
• Only Commercial Quantum Computer in the World
• Demonstrating 10,000-100,000x Faster Problem Solving
• Partnered with Lockheed, Google, and NASA
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• Initial Investment: 2006
• Capital Invested: $5.8 Million
• Voting Ownership: 2.5-5%
• Late Stage
ADESTO: EVOLUTION OF TECHNOLOGY
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1990’s 2000’s 2010’s 2020’s
Era of Computing
Era of Communication
Era of Mobility
Era of Autonomy
Speed (GHz)
Capacity (Gbits)
Technology Drivers and
Requirements
Ultra Low Power
Secure
Connected
Connected Computers
Connected People
Connected
Everything
ADESTO: GROWTH OPPORTUNITY
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10 years
1 year
1 month
1 week
1 day
10 hours
1 hour
0
1980's 1990's 2000's 2010's 2020's
DRIVE TOWARDS AUTONOMOUS CONNECTED SYSTEMS
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Bat
tery
Lif
e
Low Energy Consumption
IoT Requires CONVERGENCE of Low Energy Consumption + High Intelligence
Source: CISCO
ADESTO: CRITICAL REQUIREMENT FOR REALIZATION OF INTERNET OF THINGS
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LOW POWER
“Ability To Use Energy Harvesting as Power Source: Light/Solar, Thermal, RF Scavenging, Vibration”
Sources:
“Low Power is the number 1 priority for IoT and battery-operated mobile devices”
“…cost of installing new wiring to power these devices is prohibitive…”
“…best-in-class low-power non-volatile memory/flash memory technologies…”
“…for a simple system with a small ARM M0 core, the flash memory could conceivably consume 70% of the power…”
“…Power efficiency is critical since these devices are often not connected to power and have to operate using energy harvesting sources or a single battery for several years without maintenance or battery replacement…”
“We measure the chance of success based on being light weight (in terms of code footprint), low power consumption, open and suitable to a multi-platform environment.”
Weeks to Years
ADESTO: IOT MARKET OPPORTUNITY FOR ADESTO
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Semiconductor Revenue Content of IoT Gartner forecasts almost 30 percent growth [CAGR] through 2020 for IoT semiconductor revenue
Source: IDC, Applied Materials "As product designers dream up ways to exploit the inherent connectivity that will be offered in intelligent products, we expect the variety of devices offered to explode," added Middleton. Gartner estimates the incremental IoT supplier revenue related to IoT in 2020 – hardware, software and services – to be worth $309 billion.
2016 $15B $1.5B $600M 2017 $19B $1.9B $750M 2018 $25B $2.5B $1B 2019 $33B $3.3B $1.3B 2020 $44B $4.5B $1.7B
IoT IoT Non-Volatile Adesto’s Semi Content Memory Content IoT SAM
Assumes 10% of semi content is memory Assumes 40% of memory content is low density
ADESTO TECHNOLOGIES
• Fabless Ultra Low Power, Non-Volatile Memory Producer
• Multiple Design Wins in Internet of Things (IoT) Market
• 100x Reduction in Power Consumption Compared to Competitive Offerings
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• Initial Investment: 2007
• Capital Invested: $10.5 Million
• Ownership: 10-15%
• Late Stage
Enabling IoT with Ultra Low Power Memory
Technology Platforms
Company Building
Market Access
Scale & Manufacturing
Corporate Partner
Corporate Partners are Highly Complementary
Technology Platforms
Company Building
Market Access
Scale
PARTNERING EARLY IS BENEFICIAL
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PORTFOLIO PARTNERS
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H&H Portfolio
Public Sector
Private Sector
Note: Includes corporate partnerships since 2002, which is when the first of the current Managing Directors joined the firm.
NIST
DOE
NSF
NIH
DARPA
ONR
Sephora Crucell
BOSCH
3M
Celgene
syngenta
Microsoft Health Diagnostic Laboratory, Inc.
LIFE Technologies
NASA
Bristol Myers Squibb
Bunge
Chevron
Coherent
Dow
Genentech
Hitachi Chemical
Illumina
Intel
LG Innotek
Lockheed Martin Metter Toledo
Mitsui
Panasonic
Samsung
Sanofi-Aventix
Synaptics Unilever Tyco
Novartis
Boehringer Ingelheim
Oxford Biosciences
Pfizer
Corporations currently add value to Harris & Harris Group and our portfolio companies in multiple ways.
CURRENT EXAMPLE OF OUR PARTNERING STRATEGY
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STRONG INTERDISCIPLINARY TEAM
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Doug Jamison Managing Director, CEO
Daniel Wolfe, PhD Managing Director, President
• 90+ Years of Experience* • 55+ Companies • 150+ Rounds of Financing • 30+ Exits for $2.5 Billion+**
• $270 Million+ in Revenue Generated By Portfolio Companies in 2013
Alexei Andreev, PhD Managing Director, EVP
Misti Ushio, PhD Managing Director, CSO
Blake Stevens, PhD Senior Associate, VP
*Includes Investing and Industry experience ** Total value of portfolio companies at time of exit without milestone
payments since 2002, when first deal team member joined
Note: Equity-focused portfolio companies, year of first investment and stage classifications as of September 30, 2014, not including 1) our publicly traded shares of Solazyme; 2) our rights to milestone payments associated with the acquisitions of BioVex Group, Nextreme Thermal Solutions and Molecular Imprints; and 3) portfolio companies currently in the process of being liquidated, have ceased or are in the process of ceasing operations and/or are seeking a sale of their assets, including Laser Light Engines, Ultora, Synglyco and Cobalt.
PORTFOLIO BY STAGE
LATE EARLY MID
Mersana
Enumeral
ABS
Senova
AgBiome
EchoPixel
ProMuc
Nantero SiOnyx
OpGen
HZO
Bridgelux
Nanosys Cambrios
Adesto
PWA
Ensemble
Champions
D-Wave
Metabolon
BIOLOGY+
Other
Molecular Imprints
UberSeq
Accelerator
TARA Biosystems
GAME PLAN FOR ACCELERATED GROWTH
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• Realize Value in Current Portfolio
• Invest in BIOLOGY+
• Partner for Resources & Expertise
• Return Value to Shareholders
COMPANY HIGHLIGHTS
• 30-Year History Building Companies
• Holds Equity in Over 20 Transformational Companies
• Value Not Yet Realized
• Focused Strategy for Accelerated Growth
• Strong Interdisciplinary Team
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