Invest in What, and Why* A presentation to the RESEAU CAPITAL VC Conference October 29, 2004, Quebec City Dr David H Jacobson 416 814 5800 [email protected] Transaction Advisory Services, PricewaterhouseCoopers LLP 145 King St West, Toronto, ON M5H 1V8

*connectedthinking

What I do

• Director Technology, Transaction Advisory Services, PricewaterhouseCoopers LLP (PwC), Toronto, Canada. Assists PwC and its clients with technology-business strategy and development, and the evaluation of emerging technologies and their commercial prospects. • Member of the PwC international technology network which includes the PwC Global Technology Centres in California, UK and Europe. • Contributing Editor, PwC Technology Forecast: 2002-2004, and Advisor to the Global Technology Centre. • Board Member, Canadian Photonics Consortium. 2

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Some Quebec foundations of excellence in technologies and markets

• Digital media • Optics and Photonics • Sensors • Nanoscience and Nanotechnology • Wireless • Healthcare technologies • IT systems & services 3

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Digital Media: New Market Opportunities + Quebec Excellence = Investment Potential

• Digital audio and video content to consumer digital platforms*— ”digital media on the go”. • Customer-centric enterprise-content applications—not just “POTS or Website” customer service. *(Note: 1” tiny very high capacity disk drives available now for consumer applications.)

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Optics & Photonics: New Market Opportunities + Quebec Excellence = Investment Potential

• FTTx evolution, 10Gig+ Ethernet + 1Gig Ethernet + Copper Mb/s access • Light emitting materials and devices (eg PLEDs) for displays and consumer goods. • Optical interconnect of high-speed semiconductors and backplanes. • Optical/electronic conversion→optically switched networks. (Note: JDSU has been grooming tiny acquisitions)

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Sensors, RFID & Zigbee: New Market Opportunities + Quebec Excellence = Investment Potential

• Sensor + RFID combinations for retail, manufacturing, maintenance and pharmaceutical applications—and customs clearing. • Sensors + Zigbee (802.15.4b) for building, home automation and consumer applications. • Communicative networks of micro-miniature, self-powered sensors—the emergence of electronic “smart dust”.

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Sensors, RFID & Zigbee: New Market Opportunities + Quebec Excellence = Investment Potential “Hitachi RFID Tags White objects are grains of rice”

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Sensors, RFID, Zigbee: New Market Opportunities + Quebec Excellence = Investment Potential “ Smart Dust ‘Motes’ ”

UC Berkeley 8

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Nanotechnology: New Market Opportunities + Quebec Excellence = Investment Potential

• Molecular assembly processing techniques. • MRAM (magneto-resistive), FRAM (ferro-magnetic), holographic memory, ovonic unified memory (compound semiconductor phase change), molecular memory, nanotube RAM, MEMS-based memory and polymer memory. • Tiny nuclear solid state/MEMS energy sources (emerging from R&D Labs, eg at Cornell Univ)

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Nanotechnology: New Market Opportunities + Quebec Excellence = Investment Potential “Tiny Nuclear Electricity Source”

IEEE Spectrum 10

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Broadband Wireless: New Market Opportunities + Quebec Excellence = Investment Potential

• 802.11n WiFi for ultra-fast wireless HDTV and for corporate and retail wireless networks with speeds of up to 500Mbits/sec. • WiMAX system architectures and implementations--- “WiFi on steroids”. • High speed downlink packet access (HSDPA) cellular and 3.5G→4G enhancements. • 802.20 (See Nextel!) • Ultimately, being “well connected”.

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Broadband Wireless: New Market Opportunities + Quebec Excellence = Investment Potential “Well Connected”

Alcatel 12

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Broadband Wireless: New Market Opportunities + Quebec Excellence = Investment Potential “Well Connected”

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Intel

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Healthcare Technologies: New Market Opportunities + Quebec Excellence = Investment Potential

• Assistive technology and devices for greater mobility and self care of aging populations. • Wireless personal health monitoring and alert systems.

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Healthcare: New Market Opportunities + Quebec Excellence = Investment Potential “Personal Health Monitoring”

[email protected] 15

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IT Systems & Services: New Market Opportunities + Quebec Excellence = Investment Potential

• Interior security—data-centric protection.

• Customer-centric enterprise content/media management in a single view and in real time. • OSS/BSS for IP based networks (converged telecommunications and computer networks), ensuring performance, security and autonomic behaviour—and QoS, especially for VoIP, video. • Eavesdropping on VoIP.

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VC Criteria – fundamentals count in investment success

• Track record and entrepreneurial flair of team. • Uniqueness and daring of value proposition and of IP. • Ability to reach a sizeable, growth market. • Barriers to entry for competitors. • Technology & market risks—mitigated by staged deal and milestone-payment structuring. • Timely exit. • The VC’s sphere of influence.

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The Beginning, not the End…..

…Thank you!

© 2004 PricewaterhouseCoopers LLP, Canada. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, Canada, an Ontario limited liability partnership, or, as the context requires, the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent 18 *connectedthinking is a trademark of legal entity. PricewaterhouseCoopers LLP.

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