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Russian Venture Company Fund of venture funds

Russian Venture Company Fund of venture funds. Basic terms Ministry of Economic Development and Trade Russian Federation. Russian Venture Company How it operates. Venture fund. Venture fund. Venture fund. Venture fund. Venture fund. Venture fund. VC. VC. VC. VC. VC. VC.

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Russian Venture Company Fund of venture funds

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  1. Russian Venture CompanyFund of venture funds Basic terms Ministry of Economic Development and Trade Russian Federation

  2. Russian Venture CompanyHow it operates Venture fund Venture fund Venture fund Venture fund Venture fund Venture fund VC VC VC VC VC VC FUND OF FUNDS LEVEL Russian Venture Company Privately Managed Venture Funds VENTURE FUNDS LEVEL STARTUP LEVEL Microelectronics Telecommunications Biotechnologies Nanotechnologies  Information technologies Medicaltechnologies Alternativeenergy      Å

  3. Russian Venture CompanyBasic structure Investment Fund of Russia RUB 27 ~ US $ 1 RUB 15 billion ~ US $ 550 million RUB 0.6 billion ~ US $ 22 million RUB 1.5 billion ~ US $ 55 million Buyout right for RVC fund units (5-year vesting option) RUB 15 billion 100% Venture Capitalists †    Buyout price: Original RVC money + 3-5% annual interest  JSC Russian Venture Company  Buyout price: Original RVC money + 3-5% annual interest RUB 0.6-1.5 billion Buyout right for RVC fund units 49% manage Private VC fund limited partners 10 or more venture funds 51% Fund Management companies manage RUB 0.6-1.5 billion Venture funds (closed-end mutual funds *) Return on investment (~80%) Carried interest (20% max) Management fee (2,5% max) † employees of the management company charged with managing the fund; must contribute at least 1% of capital to the fund as physical persons * tax transparent, licensed management company required, some regulatory requirements apply; in process of deregulation for qualified sophisticated investors similar to U.S. Reg D Investments Early stage innovative startups

  4. Russian Venture CompanyDecision process Board of directors Criteria State directors (public officials)    Venture directors (external professionals)   • External director = • Venture fund executive experience or • experience in venture promotion policies (national or international) • Funding decisions = independent directors can jointly veto the government choice General director  Official decisionmaker Organizes competitions Signs checks Interfaces with bureaucracy RVC Staff (5-6 people)       All figures and terms are provisional and subject to further change

  5. Russian Venture CompanyIndependent Director Rights and Duties Duties Rights Directors together can veto any investment decision as inappropriate based solely on their judgment Directors must review all proposals for funding; any associates help might be enlisted but director must make a personal decision Directors can meet the venture capitalist teams, ask questions and make inquiries Directors have to attend board sessions in person once a quarter to review the venture team presentations Directors receive monetary compensation and have all their trip related expenses fully paid Expected time commitment – about 1-2 days and 5 to 15 presentations (Normally end of quarter, weekends are possible) Directors do not have to participate in daily matters of the company; they will be asked to take part only in investment decisions Directors enter into a contract with Russian federal agency to act as directors, agreement is construed under Russian law

  6. Russian Venture CompanyLeverage Government will cap its return from VC funds at 3% per annum! • RVC funds will be refundable but at a very low effective interest rate (starting from 3%) • If a fund is successful, limited partners can buy out the government's share in the fund at a 3% effective annual yield to the government • This way the government will out some of the investment risk • Our goal is not to make money but to create Russian hi-tech sector • WE GIVE FUND • YOU GROW STARTUPS • YOU KEEP NEARLY ALL NET INCOME Extra IRR For 5, 7 and 10 years of fund life RVC share 49%, IRR to RVC 3% Management fee and carried interest are not factored in All figures and terms are provisional and subject to further change

  7. Russian Venture CompanyThe Message For limited partners and VCs: Hire the best teams Seek most promising startups We want to work with you For mass media: Tell everyone who dreams of building a new Google или Intel, but does not dare – Start founding startups now unless you want to be late for money. It's time. Money for new success stories is on the way.

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