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Tuesday, February 28, 2006

Sequell Process

Our Startup funding / VC consulting process

Our investment process is optimized to realize substantial returns from early-stage firms developing high valued-added core technology. Our process phases are:

1. Deal Flow
2. Evaluation
3. Selection
4. Decision
5. Value Creation
6. Liquidity Planning

These phases provide timely responses to entrepreneurs, ensure quality portfolio companies, and set the stage for our value-added model post-investment.

1. Deal Flow comes from our entrepreneur network, syndication partners, and later stage venture capital firms. These deal flow sources are attracted to us by our ability to perform due diligence and assist portfolio firms in achieving critical time-to-market milestones. Obtaining most of our deal flow from such qualified sources frees up more resources for building portfolio value.

2. Evaluation begins with the introduction of a business plan through one of the members of the our network followed by a face-to-face meeting and subsequent investigation. We assesses the strength and completeness of the team, the company's technology, competitive advantage, target market, marketing plan, financial history and projections, and capital needs. The due diligence will include reference checks with customers, industry experts, and management references.

3. Selection is based on input from our Advisory Committee and analysis of team industry knowledge, technology development capabilities with a "deep science" orientation, portfolio fit, time-to-market focus, target market sizing and dynamics, competitive landscape and entry points, capitalization table, revenue projections and sales cycles, and recruiting capability.

4. Decision rests on discussions on perceived valuation, roles of both current and potential co-investors, and deal terms. A unanimous decision by the managing members is required to proceed with each investment.

5. Value Creation is achieved by assisting the portfolio company's management team in implementing and utilizing methodologies that manage and monitor time-to-market strategies using proven process models. Important ingredients in these models are a strong emphasis on early and frequent customer involvement in product development, concentration on differentiators, and recruitment of key contributors (advisors, executives, strategic partners).

6. Liquidity Planning is approached as a continuous process integral with value creation that provides multiple options. All management decisions are analyzed for strategic impact on liquidity paths with the intent of maximizing investor returns

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