Key learnings of managing COMPETEsupported Venture Capital funds

Key learnings of managing COMPETEsupported Venture Capital funds FIN-EN Meeting in Lisbon 26 th September 2013

Espírito Santo Ventures in brief 1 • Solidity and experience • • Venture Capital funds management company, with 13 years industry experience Integrated in BES Group, with full autonomy in investment and divestment decisions Over EUR 250 million in assets under management, in 5 active funds A seasoned team of experienced professionals 2 • Clear investment focus and strong expertise • Focus on areas of great challenge and growth: Clean. Tech, Information Technology and Healthcare & Well-being • Clear investment criteria and strong investment selection capabilities 3 • Global reach • Global deal flow, with no geographic restrictions • Strong global VC partnership, reinforcing the flow of attractive investment opportunities, attracting foreign investment to Portuguese companies and opening doors for all portfolio companies 4 • Commitment to value delivery • Investments in 53 companies, 8 trade sales, 2 IPOs • Strong engagement in the management of the portfolio companies • Active investor relationships Lisbon 26 th September 2013 1

13 years experience in Venture Capital investment Over € 250 m under management Solidity and Experience 1 2000 … 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ESTV ESV III Inovação e Internacionalização ISTART I New fund • The inception: Espírito Santo Tech Ventures – ESTV • Organized as a VC holding company in 2000 • € 70 m invested in 12 companies, between 2000 and 2004 • Our core global VC funds, ESV II and ESV III • ESV II – € 88. 5 m, 18 investments, working on divestment phase (3 exits to date) • ESV III – € 75. 3 m, 17 investments, closing in on the end of its investment period (2 exits to date) • Funds for early stage investment in Portugal attracting investments with strong potential • “Inovação e Internacionalização” – € 10 m for growth companies, 5 investments to date • “ISTART I” – € 3 m for seed financing, 7 investments to date • Planning for new international funds and initiatives • Structuring new international VC fund, with initial closing in 2014 Lisbon 26 th September 2013 2

Clear investment criteria for Espírito Santo Ventures’ Funds Clear investment focus and strong expertise 2 The company must: • Be the best in its field, with a unique business model or technology Companies that can only deliver incremental change can not create a significant value • Have a global addressable market of at least USD $ 1 billion Companies addressing a local or a small niche market will remain local or small in their impact • Have knowledgeable, honest and resilient managers An outstanding technology is not sufficient to drive a company’s success if it isn’t led by the right people • Offer a valuation potential of at least 5 x, in the medium term A very significant return to our investors is key to the success of our venture investment activity Lisbon 26 th September 2013 3

A clear focus on three areas of great challenge and potential growth Clear investment focus and strong expertise 2 Our funds invest in areas that are closely related with what we believe to be the XXIst century global challenges Environment, demography and global development Information technology Clean. Tech Global warming is raising awareness about the need to preserve and recover air, water and soil quality We invest in technologies that can support a sustainable and environment-friendly development • New / renewable energy sources • New efficient and non polluting industrial / agricultural processes • Energy efficiency • Desalination and water efficiency • Natural resource efficiency Lisbon 26 th September 2013 Technologies to facilitate the communication and optimize the business relations and processes will play an important role in global development We invest in technologies and processes that can create significant value in bridging individuals and organizations • • • Information technologies Communication technologies New payment solutions Semiconductors Electronics Healthcare and Well-being The increase in lifespan and the aging of the population are creating new healthcare needs We invest in technologies to solve these problems and increase the wellbeing and quality of this extended life • Diagnosis and therapeutic procedures and devices to increase the quality of the modern extended life expectancy • Healthy food and beverages 4

Extensive experience in investing worldwide – portfolio companies Global reach 3 Long standing experience in investing and coinvesting with some of the best VCs in different markets provides a rare knowledge of best-in-class venture practices Lisbon 26 th September 2013 5

A consistent growth in national investment opportunities, with no loss of quality Number of Investment Opportunities directed to ESV by geography 670 532 488 233 70 52 2006 2007 110 Source: Espírito Santo Ventures’ deal flow database Lisbon 26 th September 2013 316 2008 Portugal 377 2009 Europe 2010 North America 2011 427 2012 Other 6

A unique knowledge of the Portuguese startup community By Region – predominance of tech centers in Lisbon and the Northern regions Deal flow by region 2010/2013 By Stage – Even distribution with preponderance of seed/early stage Classified deal flow from Portugal – 2010/2013 (simplified) Minho Trás-os-Montes E Porto Alto Douro Late stage 15% Aveiro Beira Viseu Interior Seed 30% Coimbra Leiria Ribatejo Madeira Growth 31% Lisboa Setúbal Early stage 24% Alentejo Açores Algarve By Area – More than half of the deal flow is IT-related Classified deal flow from Portugal – 2010/2013 (simplified) Biotech & Drugs 4% Therapeutic Lifestyle 3% 4% Diagnostic 5% Food & HC & Nutrition Well-being 5% Environment 21% IT and waste 51% 6% Clean. Tech Software 28% Materials & Hardware/Co Construction mms/Semico 8% Energy n efficiency 13% 6% Renewable Services energy 9% 8% <3, 0% << 10, 0% << 15, 0% << 33, 0% >33, 0% Source: ESV deal flow database Lisbon 26 th September 2013 7

Venture Capital investment plays an important role in society Successful Venture-backed companies show evidence of superior economic importance and greater resilience through the downturn Through the downturn: 2008 -10 21% Employment growth – VC-backed companies vs. US private employment -2. 0% 11% -3. 1% Revenue growth – VC-backed vs US Sales 0% US VC investment as % Jobs in US VC-backed of GDP companies as % of Private Sector employment Revenue at US VCbacked companies compared to GDP 1. 6% -1. 5% Other benefits, at a domestic level, include aspects like catalyzing knowledge and IP, creating qualified jobs, capturing wealth (through exports), or attracting foreign investment Source: National Venture Capital Association – Venture Impact - The Economic Importance of Venture Capital-Backed Companies to the U. S. Economy Lisbon 26 th September 2013 8

Our portfolio is proof of that role Growing business of our portfolio companies. . . impacting their respective employment numbers Sales volume of ESV portfolio companies (M€) All companies Portuguese companies 632 Number of employees in ESV portfolio companies All companies 8. 741 200 Portuguese companies 3, 556 445 5. 396 56 118 94 217 90 865 1, 719 2, 391 135 32 35 69 315 38 89 At the time of investment 4. 528 2012 At the time of investment 295 2. 418 3, 466 817 1, 320 2012 At the time of investment 1, 165 Dec 2012 515 583 1, 320 At the time of investment 3, 366 Dec 2012 ESV III - investments between 2008 and 2012 ESV II - investments between 2006 and 2008 "Fundo I" - investments between 2000 and 2002 Source: Espírito Santo Ventures, portfolio companies Lisbon 26 th September 2013 9

ESV is managing two funds participated by COMPETE ISTART I proving the concept of seed financing in Portugal In 2009 ESV was approached by IST’s Management Board to establish a financial instrument to promote entrepreneurship in the University • Coincided with the launch of the COMPETE process and matched the objectives of its Seed investment component Innovation and Internationalization (“I+I”) Fund supporting early stage companies The application to a COMPETE-supported fund was born of a joint will between ESV and BES in late 2009 The € 10 m fund was established in early 2012 to support early stage companies with a strong focus on internationalization • Up to € 1, 5 m per company, per year The € 3 m fund was established in early 2012, aiming to support technology-based projects by researchers from any Portuguese university or research institute • Up to € 300 k investment per company 50% 35% 45% 50% Private investors 20% Lisbon 26 th September 2013 10

Seven ISTART I investments, to date, from several sources of deal flow ISTART I Main deal flow source institutions for ISTART I Institutions with an ISTART I portfolio company Lisbon 26 th September 2013 11

I+I Fund supporting early-stage companies with ambitious internationalization plans Innovation + Internationalization Lisbon 26 th September 2013 12

Investment from these funds has helped unlock investment from other investors, including foreign Co-investors in ISTART I and I+I portfolio companies Corporates Foreign investors Lisbon 26 th September 2013 VCs Business Angels/ Institutional investors ISTART I / I+I assumed a lead/co-lead role in almost all deals 13

Improving the effectiveness of the capital to be deployed means maximizing…. . . the attractiveness to private investors, including international Ensure that investors' best interests are protected by minimizing any limitations that in any way limit the ability of the funds to provide financial returns Lisbon 26 th September 2013 . . . the attractiveness to the best fund managers . . . the economic impact of selected companies Ensure that fund managers are rewarded in line with the market, so as to attract the best fund managers, those who offer the capacity to adequately deploy the funds Ensure that only (and most of) the companies who offer a large potential of impact are supported, and they are supported to the fullest extent possible 14

A few practical suggestions to improve current practices 1 Review strictness of the geographic limitation • Supporting “Portuguese companies”, is about supporting companies created in Portugal that create and retain value in our country • Often, as part of their development process and for the best reasons, the best companies will be motivated to move HQ abroad • Preventing investment or imposing exits in those cases is not in the company’s or the investors’ best interests 2 Recognize the need and gain the ability to support the best companies through their development • Inability to provide support past a certain stage or amount (including across funds) is not in the company’s or the investors’ best interests 3 Strive to incentivize good deployment, not necessarily fast deployment • Current fee structure creates the incentive to quickly call and deploy the capital 4 Ensure competitiveness of the offer to funds managers • A competitive fixed and variable fee structure • Trust and verify, rather than imposing disproportionate reporting requirements Lisbon 26 th September 2013 15

In short, experience in investment supported by COMPETE has been positive and should be amplified It has enabled the creation of Venture Capital funds, vital to the development of the economy It has succeeded in attracting private investors into those funds It has been deployed in a number of high potential companies • Successfully making the transition between academia and the business world • Helping highly innovative companies grow internationally It has succeeded in attracting foreign investment into these companies A positive experience that should be amplified Which is in line with the rise in demand in investor interests Still, there are opportunities to improve the effectiveness of the capital to be deployed Lisbon 26 th September 2013 16