When seeking finance for an IP based SME beauty is in the eye of the beholder. For European Patent Office

1. Problems faced by SMEs when seeking finance lessons to learn Iain C Shirlaw, Tranziger, Director Equity Financing Venice, November 2008

2. Tangible and Intangible Book Value

3. IV as % of Market Capitalisation, 2005

4. IV as % of Market Capitalisation, 1975

5. “Beauty is in the Eye of the beholder” Greece, 3rd Century BC The Inventor of IP The Financier The Manager

6. The Inventor Typically a public sector employee Expert (Knows a lot about a specialised niche) Funding is usually a grant Idea is worth billions

7. The Financier Typically an accountant Non Expert (Knows a little about many things) Funding is based on a specific target return Idea is worth nothing unless it has EBITDA

8. The Manager Typically used to work for a large company Has been a functional specialist Funding is something to pay his salary Idea will make millions for somebody!

9. The Industry Has shareholders to satisfy Has a traditional perspective Investors don’t want risk Need Proof the idea is worth anything! And have a lot of cash!!!!

10. The Business Model Invest 20x$25m in R&D to get 20 candidates ($25m each) Invest $20m in pre-clinicals – Lose $10m Invest $25m in Phase 1 – Lose $12.5m Invest $25m in Phase 11 – Lose $16m Invest $50m in Phase 111/1V – Lose $25m Invest $50m in FDA and market Approval – Lose $25m Win!!!! Generate $120m per year for 10 years

11. Bridging The 7 Stages of SME Growth

12. The Lesson to be learned Aim for value at each stage Learn and Build your capability Know your buyer - Pharma? Be ready for change! Get your timing right!! Iain C Shirlaw, Venice November 2008

13. Seven Ages of Man Senility Old Age Adult Young Adult Adolescent Child Infant

14. As You Like it Act 2, Sc 7 Shakespeare "All the world's a stage, and all the men and women merely players;They have their exits and their entrances;and one man in his time plays many parts,His acts being seven ages. At first the infant, mewling and puking in the nurse's arms;And then the whining school-boy, with his satchel And shining morning face, creeping like snail unwillingly to school. And then the lover, Sighing like furnace, with a woeful balladMade to his mistress' eyebrow. Then a soldier, full of strange oaths, and bearded like the pard, jealous in honour, sudden and quick in quarrel, seeking the bubble reputation even in the cannon's mouth. And then the justice, in fair round belly with good capon lin'd, with eyes severe and beard of formal cut, full of wise saws and modern instances; and so he plays his part. The sixth age shifts into the lean and slipper'd pantaloon, with spectacles on nose and pouch on side; His youthful hose, well sav'd, a world too wide for his shrunk shank; and his big manly voice, turning again toward childish treble, pipes and whistles in his sound. Last scene of all, that ends this strange eventful history, is second childishness and mere oblivion;Sans teeth, sans eyes, sans taste, sans everything." )

15. Iain Shirlaw Contact details: tranžiger international corporate and transaction advisor life sciences and healthcare shirlaw@tranziger.com