Subject: RSTP Strategy Insight/Talking Point
From: "Neil Callahan \(Rosemont Seneca\)" <[email-masked]>
To: "John DeLoche" <[email-masked]>, "'William Lee'" <[email-masked]>, <[email-masked]>, "'Hunter Biden'" <[email-masked]>, <[email-masked]>, "'Rob Walker'" <[email-masked]>, "Sebastian Momtazi" <[email-masked]>
Date: Tue, 1 Apr 2014 12:06:06 -0400

Hey guys - 

There is one insight from our Juilliard meeting from their CIO I thought was
interesting and relevant to our story and I'd never heard it or thought
about it before.

His comment that our track record shows growth equity investments with
companies that have enormous market potential.  Companies that are entering
huge markets and have the potential to become huge companies and it makes
sense how our value added financial, operating and business development
capabilities can accelerate the growth of those companies.

Mid-market growth equity, generally speaking, focusing on companies no one
has ever heard of or will hear of - small, niche, regional plays that maybe
have a regional focus on a niche use case focus or single industry focused.
The market size and potentially is usually limited and a successful exit is
usually selling to bigger strategic company in the space and many times
there is only one or two buyers in the space, so the price upside is
limited.

Counsyl, Medabiota and Cataphora all have the potential to be market leaders
in their respective spaces, which are huge and growing, and have the ability
to seek an IPO as an exit or exist as a standalone operating company that
can be a #1 or #2 player.  And there are multiple potential buyers across
various industries both domestically and internationally which sets the
stage for a potential competitive bidding process = high exit price.

I think this is an important insight - we are doing growth equity in
technology, but not with your typical portfolio company profile that our
competitive GPs are used to targeting (for example - look at mainsail's
portfolio:  http://www.mainsailpartners.com/portfolio-list/).  So our exit
profiles can be much bigger and much more interesting to our LPs.  And our
ability to use our skills and global network to impact our portfolio
companies makes sense in terms of proportionality - we are not using a
bazooka to enter the Kalamazoo market, we are using a bazooka to open up big
global markets and opportunities. 

Best,

Neil

PS - I am I get a golf clap for using two words with "zoo" in them in the
same sentence.

 

Neil Callahan

Rosemont Seneca Technology Partners

Carnegie Hall Tower

152 West 57th, 47th Floor

New York, NY 10019

212-933-9965 (o)

917-945-9516 (m)

866-749-8879 (f)

 <http://www.rstp.com/> www.rstp.com

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