New Opportunities for Direct Investment: - PowerPoint Presentation

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New Opportunities for Direct Investment: Life Beyond VC

Jon Medved

CEO, OurCrowd

Prepared for DC Finance Annual Family Office & Wealth Management Conference

Slide2

Massolution

: Crowdfunding

portals will raise

$5.1 billion in 2013 – nearly double the amount raised in 2011Consumer LendingRewards-basedDonationsVenture Capital

2

Market Disruption: Crowdsourcing in Finance

Source:

Deloitte TMT Predictions 2013 “

Let's get together:

crowdfunding

portals bring in the bucks”

“Venture capital-type

crowdfunding

is the wild card for 2013. It could raise more than a billion dollars …”

Source:

Massolution

Crowdfunding Industry Overview 2013

Slide3

3The recent acquisition of Oculus raises questions

Rew

ard-based

crowdfunding: Where is the Reward?

Now investors are asking why do I only get a

tshirt

?

Andreesen

, Spark, Matrix Partners back Oculus Rift with $75M Series B… then Facebook acquires the company for $2B

December 2013 … March 2014

After raising $2.4M from

Kickstarter

, Oculus Rift gets the attention of major investors

Naturally, this plays into the rise of equity crowdfunding platforms

Pays $2B for company and

Original crowd funders get nothing

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Angel Investing

Venture Capital

4

Legal issues/termsheets handled by firmExposure to top dealflowProfessional due diligencePreemptive/other rights

Independence, self-selection

Low fees

No large upfront commitment

Relative speed and ease

Large

Commitment

Hefty

management feesCarried

interest feesNo control, no choice

Very limited dealflow

Term sheet negotiations

Limited due diligence capabilitiesNo protection, no rights

OurCrowd

offers the professionalism and experience of a venture fund,

plus

the flexibility and choice of

angel investing

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Global leader in equity crowdfunding, just 15 months after launching

Raised

over $50M

for 40 companies20 companies with over $1m raised, 2 deals over $3MFirst follow-on deal funded in 4 hours, 14 follow-on deals on OurCrowd, with 16 of our portfolio doing follow-ons totalHigh-quality, continually improving pipeline of new & international deals5000 Accredited investors, 500 activeAverage active investor committed to almost $100K on siteExperienced investment team - 150 years combined VC experience

Portfolio companies doing very well

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OurCrowd Overview

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“Crowdfunding for real investors” (TheStreet.com)Growing Differentiation from the rest of the pack

Currently Selecting 2

% of

the deals we are pitchedWe always Co-invest with crowdAccredited investors onlyManaged investments via SPVGood for companies (one check), Good for investors (protections, rights)Truly International ( active investors from 26 countries)Focus on Follow-on rounds bearing fruitMentors program is uniqueTaking Board seats in 65-70% of companies“Crowdbuilding” resonates and worksCo-investor list is indeed impressiveOur goal is to be the “smart money” in crowdfunding

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OurCrowd’s Investment Model

7

Accredited Investors



Management

OurCrowd

International

(GP)

OurCrowd

management company

OurCrowd

investment vehicle

GP

Special

Purpose Vehicle

Control

Portfolio Company

Investment

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OurCrowd’s Portfolio

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Enabling paraplegics to walk

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Paraplegics face immense social and medical difficulties living wheelchair-bound. Israeli entrepreneur Dr.

Amit Goffer developed the ReWalk for over a decade to produce a device uniquely capable of alleviating key medical complications that come from a paraplegia and allowing paraplegics to walk, climb stairs, and even complete marathons.Argo – advanced robotics allowing paraplegics to walk again

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Feeding the world: water

Farmers waste hundreds of millions of dollars worth of water – driving up prices and reducing supply for those most in need of affordable water – because they’re spraying water uniformly across their fields. A mobile app that enables farmers to finely control where their water goes is already saving countless cubic meters of water internationally.

Varigate

– the world’s most affordable waterIsrael recycles 75% of its water, #1 in the world. By comparison, #2, Spain, recycles just 11% of its water.“Israel should be proud of being at the forefront of green innovations for water management; these innovations can be decisive in managing scarce water resources” – Angel Gurria, OECD Chair

Israeli water tech impact

Did you know that Israel is recognized by the OECD, WWF, and UN for being a water tech powerhouse?

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Fighting the most deadly killer: malaria

Malaria has killed millions in the past decade and is among the diseases with the highest toll on human life and economic activity worldwide. Despite this, diagnostics tools used in the prevention and treatment of malaria worldwide remain expensive, slow, and insufficiently accurate for mass implementation.

SightDX’s

computer vision technology reduces the time to diagnose from several hours to minutes, while being more accurate and substantially cheaper.The story of SightDX being founded and built by a diverse group of people pooling their personal intellectual strengths is the archetype of the Israeli startup. Israel’s interdisciplinary strengths

Sight Diagnostics represents the convergence of two key Israeli strengths: life sciences/biology and machine vision/advanced algorithms

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Slide12

Israel's unique demand for the fastest, most innovative technologies in emergency alerting forced eVigilo to produce the world’s leading mass alerting system that is now used by governments around the world as a core part of their disaster preparedness plans.

Chile’s 2010 earthquake and tsunami took over 520 lives as millions were left without means to communicate or be alerted to the post-quake tsunami for up to 12 hours. In the minutes after the 2014 earthquake, Chile activated

eVigilo’s

newly-implemented system and effectively alerted several million people in tsunami zones to evacuate.Saving lives by learning from Israel’s experienceCase study: Chilean earthquake ‘14

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Slide13

VocalZoom

Semicon

/components company whose product enables effective voice communication and recognition in even the

most noisy environments

. “Optical microphone” monitors vibrations on speaker’s throat and face, helping to isolate speech from background noise.

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Technology implementation update

Yechiel

Kurtz, CEO, held a successful meeting with President of

Samsung Mobile R&D group

.

VocalZoom

will be running tests with engineers in Korea in May 2014.

Strategic investments at this stage in the company’s development are an

open potential

.

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Consumer Physics (SCiO)

Miniaturized near-IR spectrometer, allowing for first hand-held molecular sensor. Applications: measuring nutritional information in foods, identifying allergens, authenticating precious metals and leathers, etc.

Co-investors:

Khosla

Ventures,

Dov

Moran

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Product launch - $1.2M in preorders

Product launch on

Kickstarter

at $200 price point saw

over $1.2M in pre-orders within a week

.

Rave reviews in media:

VentureBeat

,

Validation of strong demand for consumer-friendly health-focused devices at ~$200 price point.

Slide15

Zula

Revolutionizing team communications with cross-platform mobile messaging application. Called “

Whatsapp

for business”,

Zula’s

core value is its focus on consolidating communications for teams into one location and focusing on team-centered functions above those offered by existing consumer solutions.

Co-investors:

Microsoft Ventures, Mort

Meyerson

(EDS)

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Founders are giants in the comm. space

Above: Jeff

Pulver

, Chair & Jacob

Ner

-David, CEO

Jacob

Ner

-David

founded and exited three communications companies, the largest of which was Delta Three, which he took to IPO on NASDAQ with a market cap of ~$1.8B.

Jeff

Pulver

was the co-founder of Vonage and pioneer of VOIP technology and early legislation.

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Highcon

Moving conventional packaging production from analogue (die-cutting) to digital process (one-button operation). Opens new possibilities for packaging – short and medium runs, high-value packaging in small quantities, labor savings, etc.

Co-investors:

Benny Landa (Indigo, $800M acquisition by HP)

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Israeli expertise in digital printing

Israeli entrepreneurs brought

Scitex

,

Jemtex

Printing

,

Objet

,

XMPie

, and

Indigo

to the world market, securing major exits to multinationals like HP and Eastman Kodak. Indigo, which HP acquired for $800M to absorb its digital printing technology, was started by Benny Landa, a Highcon investor.

Current opportunity:

Raising $15M for expansion. Strategic investment possibilities.

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17MUV

Pioneering solution for interacting with multiple screens through touch, gestures, and voice input. Proprietary integration of optics and wireless tech makes its product the highest accuracy, most versatile and substantially cheaper than any options available today.

A look at MUV’s product

CEO Rami Parham demonstrates MUV’s fine-detail control over a projected image. MUV’s solution is both available in a small, unobtrusive add-on, as well as a sensor capable of being embedded within projectors by OEMs.

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18Takes

Advanced, patent-protected camera app eliminates the need to choose between taking a photo and video. Takes captures video and metadata including accelerometer inputs, allowing the user to take still images but to produce a full-motion video after-the-fact from the moments captured while photographing.

Israeli expertise in computer vision

CEO

Amit

Man is an expert in computer vision and machine learning and lead algorithm and core development at Israel’s

Briefcam

. Israeli companies like

Briefcam

,

Mobileye

, Rafael,

Elbit

, and more.

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19Curiyo

Lightweight application (browser plugin or embedded into websites) allowing content publishers to deliver in-context information to users when they ask for it.

Founded by Bob

Rosenschein

, serial entrepreneur who founded

Answers.com

– top 20 web property in the US.

Early traction with major publishers

Curiyo

launched its first major publisher partnership with USA Today, running its application embedded into the Life section online – a top 10 US news property online.

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20NextPeer

Fastest growing mobile multiplayer network for Android and

iOS

with over 70M users.

Provides back-end for developers to quickly deploy their games as full-blown multiplayer games in 10 lines of code, without the headache of maintaining server load themselves.

Evaluating

NextPeer’s

virality

NextPeer’s

user adoption rates surpassed 1.5M per day during recent peak periods, as reported in a

VentureBeat

article looking at the network’s explosion. By providing the backend for game developers to make engagingly multiplayer products,

NextPeer

is able to “latch onto” the growth of viral games like 2048n or Candy Crush and grow as the games pick up gigantic user bases.

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21Parko

Mobile app with proprietary, protected algorithms analyzing 8 inputs from phones to predict parking behavior of users, passively inserting users into an ecosystem of drivers looking for and leaving parking spaces.

Parko

continually monitors streets to build a map of parking availability likelihoods for each street at any given moment.

Technology’s applications

Parko’s

unique behavioral analysis and motion recognition engines are being licensed to 3

rd

party applications, branded as

Motionize

.

Parko

is also pioneering the next generation of “ETA” – mapping applications that tap into

Parko’s

predictive map to include estimated parking time.

Slide22

22Nativeflow

Complete enterprise data security solution for BYOD IT setups. Nativeflow secures

any data on any device and inside of any application being used by employees.

It

runs invisible to the end-user, allowing employees to enjoy the “native” user experience that motivated them to bring their personal devices into the workforce in the first place.

The deep technology behind their solution is protected and patent-pending.

Experienced, successful management team

Nativeflow’s

management team has a history of success in the security space. CEO

Eitan

Bauch

was co-founder of and sold Navajo Systems to

Salesforce

, was CEO of

Magnifire

, which was sold to F5.

Slide23

23Co-investing with leading investor groups

Top-tier funds and institutional investors

Slide24

24Co-investing with leading investor groups

Top-tier funds and institutional investors

* Investor opting for anonymity

Slide25

OurCrowd’s Leadership Team

25

Jon Medved

Co-Founder & CEOWashington Post: "one of Israel’s leading high tech venture capitalists”12 exits >$100MCo-founder, CEO of VRNGFounder & GP Israel Seed Partners, $260M AOMElan Zivotofsky General Partner Investments

15yrs experience in Israeli investing

Managing Partner at Prelude Israel

Former Head of Technology Banking, Lehman Brothers IsraelTop-ranked Israeli tech research analyst for Goldman Sachs

Steven Blumgart

Co-Founder & Chairman

Co-director of Glencore's aluminum division

Senior executive, management committee at Glencore 1998-2012

Pini Lozowick

General PartnerGeneral Partner at Alta BerkeleyAmong first employees at Broadcom, Dir. Marketing

Chairman of Provigent

Founder and GM of Verisense

5 exits; total value $3B

Geoff Levy

Chair of Advisory Committee

Extensive experience in law, banking and investing

Non-Executive Chairman of Monash Private Capital, Specialty Fashion Group and Cromwell Property Group

Non-Executive Deputy Chairman of Investec Bank (Australia) Limited

Gadi

Mazor

General Partner & CTO

Serial entrepreneur in

mobile/wireless

US Senate Advisory Board

RIM entrepreneur of the year 2013

Ex-8200

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OurCrowd’s Leadership Team

26

Evelyn Rubin,

BizDev PartnerJVP, Senior Editor @ SeekingAlphaZack Miller, Investor CommunityVP Biz Dev @ SeekingAlphaRobbie Citron, CFOPartner @ Jerusalem Global VenturesJay Kalish, SVP & General CounselVP IR @ Allot, CEO Patir Tech

Audrey Jacobs,

VP BizDevM3 Marketing

Danna Mann, Biz. Strategies PartnerBiz Dev at JVP

David Stark, dealflow

BlackstoneDavid Arnovitz,

COOFounder of S1 and Secureware

Slide27

27Mentor Program

Eli Campo

- GM Israel @

LivePerson (NASDAQ LPSN)- SVP @ Shopping.com/Ebay IsraelRaanan Gewirtzman- CEO Broadlight (sold to Broadcom $200M)

Profile

Role

Role in companiesRelationship- seasoned entrepreneurs

- experience with board seats

- active role in diligence- pre-funding review of companies

- directors in OC companies- also availability for consultation

- biannual mentor-company event started June 27th

Some recently joined mentors

Dov

Rubin

- Co-founder of NDS (sold to Cisco, $5B)

- CEO

Itamar

Medical

Ron Moritz

- GM @Microsoft

- SVP CTO @Symantec- SVP Chief Security Strategist @CA

Mike Berman- President Cardiology @ Boston Scientific- Serial entrepreneur in medical device space

Warren Adelman

- CEO GoDaddy

- VP at McAfee

- VP at Bigfoot International

Slide28

286 Key Investment Criteria

1. Great

team

: Successful startups are founded by great people.We pay special attention to successful serial entrepreneurs.2. Market: The startup must address huge market growing like a weed. No arcane ideas addressing niche markets.

3. Easy

to understand: a simple value proposition.

Easily understood by us AND by “our crowd”.

4. Traction

: Investing in early stage companies, but not just ideas or pre-prototype.

Early product, users, customers, partners & revenues

5. Sponsorship: Investing in startups/building early stage companies is a team sport.

Board, advisors, smart investors

6. We seek “deals” and are value-sensitive.

Slide29

29Serial Entrepreneurs/Strong Backgrounds

Bob Rosenschein

Founded Answers.com ($127M exit), Accent Software ($400M on NASDAQ)

Dr.

Amit

Goffer & Larry

Jasinski

Founded Odin Medical Technologies (acquired by Medtronic)CEO Soteira

(acquired by Globus), Cortek (acquired by Alphatec

)

Jeff

Pulver

& Jacob

Ner

-David

VoIP pioneer, founded Vonage, VOX, FWD, investor in Twitter and Foursquare

Founded Delta Three ($1.8B NASDAQ), founded

Nomadiq

Benny

Landa

& Aviv

Ratzman

Indigo, major global force in digital printing; HP acquisition ~$800M

Slide30

30Serial Entrepreneurs/Strong Backgrounds

Richard

Demb

Founded GC Zone, Founded Popcorn Indiana (acquired by Goldman Sachs)

Eitan

Bauch & Avi Yehuda

Collectively sold startups to Intel, F5, Salesforce.com

Zvi

Schrieber

Founded

TradeUM

($500M exit), Unicorn (acquired by IBM),

Lightec

(acquired by GE)

Benny Rosenbaum

Co-Founder Magic Software (Nasdaq: MGIC)

Isaac

Bentwich

Founded Rosetta Genomics (Nasdaq: ROSG),

Pegaus

Medical (acquired by McKesson)

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31

Not just capital – we’re creating opportunities

“I am excited about the value that OurCrowd brings to early stage investors who invest in startup companies. Not only did we raise our seed round on OurCrowd in a week, but we had people from all over the world invest in Zula thanks to this platform

”

Jeff

Pulver

Co-Founder, Zula

Slide32

32Co-investing with leading angel investors

Gigi Levy

888

AmdocsMoshe LichtmanMicrosoftRami LipmanMicrosoft IsraelBenny LandaIndigo

Yigal

Jacoby

Allot Communications

Ajay Shah

Silverlake

Sumeru

Shah Capital Partners

Gideon Ben

Zvi

Briefcam

Tzachi

Sultan

Clal Underwriting

Mort

Meyerson

Dell

EDS

Slide33

33Announcing Strategic Co-Investment Agreement with General Electric Ventures

Sue

Siegel, GE Ventures CEO :“

OurCrowd has created a unique platform for dynamic early stage origination and funding. They offer a quality investment environment and the partnership will give GE increased access to early innovation.” GE will co-invest with OurCrowd in select early stage companies in the areas of energy, healthcare, software and advanced manufacturingInvesting on the same terms as our members/investors.

First time major corporation has made such a commitment to an equity

crowdfunding platformHuge validation for

OurCrowd.

Slide34

34Press Coverage

“The 5 Most Important New Companies You Need to Know

”

Forbes Online“An Israeli company trying to change the way startups are funded”CNN Business 360

“

Medved's

latest mission is to blow up the exclusivity around tech

fundraising”

Bloomberg BusinessWeek

"The most interesting investment of the week

goes

to OurCrowd”Wall Street Journal

“The

platform has been an enormous success…the ultimate win-win-win situation, brought to you by an new and improved Israel –

innovative

& confident.”Haaretz

“Crowdfunding for real investors”

thestreet.com

Slide35

35Press Coverage in 2013

South African Business TV

Slide36

36Press Coverage in 2014

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Summary

Meeting a demand for a better online way to invest in startups

Platform works—Raised record

sums ($50M+) for 40 companies online Industry-leading performance to date – worldwide leadership Strong Israeli base, global investor reach into 60 countries, 30 active countriesOver a third of our recent deals originate from outside IsraelRecruited industry-leading teamStrong and impressive initial portfolio16 companies have completed additional funding rounds after initial funding Have provided real value-add for our startupsAchieving strong traction in a gigantic market

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