Upside Ventures back new ventures as well as technology startup. At the same time, we also invest and build special and lucrative investment assets. It's because the upside potential is much higher than conventional investment or stock markets with transparent and manageable model with low risk and initial capital. This is a more long-term profitable path. We seek qualified business and investment partners to join the venture.

1. Biz Network as an Asset
UPSIDE VENTURES
1

2. １ Overview: BNaaA
２ Learning: Power of Network
3 Upside: Linear vs. Multiple
4 Opportunities: Invest vs. Create
5 Strategies: Horizontal vs. Vertical
2

3. OVERVIEW: BNAAA
3

4. Overview: BNaaS
Biz Network as an Asset (BNaaA)
 “Investment Properties” (e.g. Ichiba shop)
 Focus on building the network as an entity
People to People (P2P)
 Ongoing value growth while network expands
to regenerate exponential return
 Leverage existing and established business
infrastructure and ongoing profit share model
4

5. LEARNING: POWER OF NETWORK
5

6. Power of Network
Billion Business – all built on a network
6

7. Power of Network
Social Network is about people, not Facebook which is just a platform
Facebook
Amazon
Rakuten
Professional
Social
Retail
Retail
24B
115B
157B
14B
User base
245M
1B
137M
100M
Revenue
972M
1.584B
61B
4.74B
Profit/Loss
21.6M
-64M
-39B
208M
Linkedin
Comparison
Valuation
Revenue/PL is based on FY2012 // Market Cap – Nov 8, 2013
7

8. Globalization Power of Network: Rakuten (Global)
More…
8

9. Power of Network: Rakuten (ecosystem)
・Shopping mall
・Auction
Common ID
Customer Flow
Rakuten Super Point
E-Commerce
E-Money
eBook
・Credit Card
・Advertisement
・Streaming
・Downloading
・Recruitment
・Marriage
Portal
&
Content
Card
Rakuten
Membership
Database
Banking
Travel
・Payment
・Consumer Loan
Securities
Telecom
・Stocks
・Bonds
・Trust Funds
・FX
・Hotels and Facilities
・Air Tickets
・Dynamic Packages
・Fixed IP Telephony
・Mobile IP
Telephony
9

10. Power of Network: Rakuten (empowerment)
[Major Global
E-commerce
Competitors]
Product Centric
[Rakuten Ichiba]
Shop Centric
The Rakuten “Empowerment” model is
very unique and difficult to replicate
10

11. Power of Network: Rakuten (empowerment)
Japan’s largest and the World’s 3rd* Largest Internet Mall
Merchants
39,000 stores*
Products
100 Million
2011 Sales
1 Trillion+
楽天会員数
78 Million+
(as of June 30, 2012, in Japan*
Global numbers higher)
11

12. Power of Network: Rakuten (empowerment)
• Fashion is the largest genre on Rakuten Ichiba
• Top Genres: Bag, Shoes, Ladies Fashion
• In JP-only, 80M members
Rakuten Ichiba
1 Trillion Yen
Fashion Ichiba’s
Largest Genre
Global Strategy Vertical Expansion:
- Biggest business
potential
- Most “portable”
- Expand
horizontially
12

13. Power of Network: Rakuten (empowerment)
B2C vs. B2B2C
B2C
R
- Linear growth
- Hard to scale
B2B2C – Scalable on a network
key factor: highly driven merchants network
Sales 1 Trillion Yen
R
<1K Account Mgr
40K Driven Merchants
Massive 80M users
13

14. How to win
Replicate the business model
 Simplify and adjust to different context
 Leverage existing infrastructure / setup
 Focus on building network across different
regions
14

15. UPSIDE: LINEAR VS. MULTIPLE
15

16. Upside: Linear vs. Multiple
Business / career path
One-time ($$$)
Most services and retail
businesses are based on 1:1
relationship with the clients or
consumers. That demand
much resources and time to
grow and scale
Investment
Banking
Consulting
Linear
Multiple
Business
Network
Retailing
Recurring
16

17. Upside: linear vs. multiple
Business / career path
Linear
Retailing
Multiple
Consulting
Investment
Banking
Business
Network
17

18. OPPORTUNITIES: INVEST VS. CREATE
18

19. Opportunities – Invest vs. Create
Ways to capture value (e.g.)
Open Stock Market
Private Investment
Create
Facebook
SNS
VC / PE
Startups
Rakuten
Marketplace
Real Estate
SMB
Linkedin
network
Invest
Franchise
Return
“System” that generates value
19

20. Return: Linear vs. Multiple
Benchmark with S&P 500 Index Total return (12.06%) vs Apple (175.6%)
http://ycharts.com/analysis/story/ten_biggestcap_stocks_just_two_outperform_the_sandp_500
20

21. Return: Linear vs. Multiple
Highest S&P 500 Return is 15.96%; vs FB and Apple of multiples
http://ycharts.com/analysis/story/ten_biggestcap_stocks_just_two_outperform_the_sandp_500
21

22. Investor: Value Proposition
Long Term Value
Risk / Stress
Return (Upside)
Scalability / Self-sustaining
(High quality products with
Self generating business model)
Min Risk / Stress free
(Managed by top professionals;
Full tranparency
Profit / multiple
(Low startup cost,
Highly profitable by multiple)
Team / Network
Elite team and network
(Highly selective elite network from
top schools and professionals)
22

23. STRATEGIES: HORIZONTAL VS. VERTICAL
23

24. Strategies: Horizontal vs. Vertical
Retail
Horizontal
Shops
Singular
Vertical
Investors
Linear
DON’T focus on
“Warm network”
- Make this as a rule
Exponential
Grow the network
Horizontal
X
Vertical
24

25. Retail: Product Strategy and Channel
Product Strategy
Selective Merchandising
Online Channels
Lifestyle Social EC
Salesforce
Global Distribution
Partnerships
Alliance / Community
(Unique, high turnover and Vol,
Strong Messaging)
(Targeted & Mass Vol at Wholesale
e.g. Fab, Birchbox, Clozette )
(Hire local “business dev associate”
e.g. Philipines, Jamaica, East EU)
Freshii / Forever Living
25

26. Horitzontal: (retail) Product Strategy and Channel
Fab – designer lifestyle product social commerce
26

27. Horizontal: (retail) Product Strategy and Channel
Birchbox – membership subscription ecommerce
27

28. Horizontal: (retail) Co-branding items
Co-branding merchandising opportunities – additional revenue/marketing
28

29. Vertical: Network building
Investor
Invest microfund
(Form business entity by funding
new shops network and sales)
Shop Owner
Operate and build
Biz Developer
Manage and build
(New shop for retail and expand
The network
(Expand downline network)
Retail Sales
Focus on retail sales
(Through strong salesforce,
Convert them into new downline)
29

30. Vertical: Network building
Establish strong foundation with highly motivated achievers and network
US
AP
JP
30

31. Vertical: Network building
Win-win-win
Initial
Capital
Biz Dev /
Owner
Fund / Share Profit
Investor
Convert into
downline
Ivy
League
Elancer
Build
Business
Entity
Retail
Sales
Identify
downline
UPSIDE
VENTURE
Drive
Retail
31

32. Investment / Return
Invest
Define profit
target (30%48%)
Develop
Identify
market
Expand
Identify high
potential
sales
Hire Sales
Define
resources
Invest initial
capital
Develop
network
Concert into
Downline
Drive sales
growth
Build/Hire
Re-Invest
profit to hire
sales
(hands off)
Or take over
to grow
network
asset
32

33. Q&A
33