Twenty years ago, in 1993, Peter Drucker commented on a coming era of information & knowledge work in his book, The Post-Capitalist Society. The implications of a post-capitalist economics, in which information & knowledge serve as core value units may not yet be understood, but we can look to some emerging trends in technology & its funding structures. This presentation seeks to isolate & explain certain variables that impact valuation & finance in an ecosystem of bits rather than capital goods. An attempt is made to frame the subject in the context of markets & themes of sector convergence that shape the CoRise thesis. This presentation is not a comprehensive review of sector activities or a survey of competitors. Nor is it an analysis or set of recommendations for purposes of assessing any investment, public or private.

2. VALUE & FINANCE IN
THE INFORMATION AGE
UNIT, SYSTEM & CAPITAL FORMATION
MAY / 2013
Twenty years ago, in 1993, Peter Drucker commented on a coming era of
information & knowledge work in his book, The Post-Capitalist Society. The
implications of a post-capitalist economics, in which information & knowledge
serve as core value units may not yet be understood, but we can look to some
emerging trends in technology & its funding structures.
This presentation seeks to isolate & explain certain variables that impact valuation
& finance in an ecosystem of bits rather than capital goods. An attempt is made to
frame the subject in the context of markets & themes of sector convergence that
shape the CoRise thesis. This presentation is not a comprehensive review of sector
activities or a survey of competitors. Nor is it an analysis or set of
recommendations for purposes of assessing any investment, public or private.

3. THE VALUE UNIT
THE INFORMATION ASSET &
ITS CHARACTERISTICS
MAY / 2013

4. 4
IN AN ERA OF CONVERGENCE*, PREVIOUSLY DISPARATE
FIELDS ARE COMBINING INTO & AROUND INFORMATION
TECHNOLOGY & SYSTEMS
MAY / 2013
TRADITIONAL
MEDIA HARDWARE
COMMERCEFINANCIAL
MARKETS
INFRASTRUCTURE
HEALTHCARE ,
EDUCATION,
OTHERS
* See CoRise presentation on
Convergence as a Long-Term Trend,
March 2013
INFORMATION
&
INFO SYSTEMS

5. 5
IN THIS CONVERGENCE OF FIELDS, THE COMMON LINK IS
INFORMATION & ITS FLOWS, SHARING TECHNOLOGY-
ENABLED FEATURES AKIN TO LANGUAGE
MAY / 2013
ACCESSIBILITY
TRANSFERABILITY DYNAMISM
COMMUNICATION
UNIVERSALITY
REPLICABILITY
IMMEDIACY
AUTOMATION

6. 6
INFORMATION CAN HAVE A VARIETY OF MEANINGS - GENERALLY
(BUT NOT NECESSARILY) RELATED TO KNOWLEDGE*; OR IN THE
MEDIA SENSE, CONTENT - NOW TYPICALLY MEASURED IN BITS
MAY / 2013
* In Peter Drucker’s meaning of an economy based on
knowledge work
DATA
NEWS
RESEARCH
SPECIALIZED
KNOWLEDGE
ENTERTAINMENT
MEDICINE
FINANCE /
ACCOUNTING
LAWARTS
COMMERCE
ENGINEERING
MANUFACTURE**
** Information systems are increasingly
converting manufacture & other capital-intensive
fields to service segments (of which 3D printing &
open-source hardware have been visible symbols)

7. 7
IN ISOLATION, INFORMATION IS A DEPLETING ASSET THAT
REQUIRES RENEWAL, REINVENTION & REPLENISHMENT
MAY / 2013
(INFORMATION IS VALUABLE ONLY
WHEN IT IS OF INTEREST)
REPLENISHMENT
REINVENTION
RENEWAL
CULTURE
TIMESUPPLY
RELEVANCE
IPCORRECTION

8. 8
ISSUES OF DEMAND, QUALITY & CONTEXT IMPACT ITS
ECONOMIC “LIFE” IN VARYING DEGREES
MAY / 2013
PROCESSES & TECHNOLOGY EXTEND OR SHORTEN
THE LIFE OF INFORMATION, WHICH IS SOMETIMES
MOMENTARY
THEORY DATA
RULESPROFILES
TRENDS INTELLIGENCE

9. THE OPERATING SYSTEM
STRUCTURES THROUGH WHICH
INFORMATION FLOWS
MAY / 2013

10. 10
SYSTEMS & PLATFORMS (SEPARATE FROM THE VALUE UNIT)
EXIST TO GATHER, PROCESS & DISTRIBUTE INFORMATION
MAY / 2013
MEDIA
DATA MINES
INFLUENCERS
MARKETS
NETWORKS
ANALYSTS

11. 11
TECHNOLOGY EVOLUTION HAS CREATED AN ENVIRONMENT
OF DEFLATIONARY ECONOMICS FOR MANY OF THESE
MAY / 2013
MOORE’S
LAW
OPEN-
SOURCE
SHARED
STORAGE
LOW
BARRIERS
CUSTOMER
EXPECTATIONS
WEB
DISTRIBUTION

12. 12
INFORMATION BUSINESSES STRIVE TO BUILD & PRESERVE
VALUE - AGAINST THE NATURAL PULL OF DEFLATION & THE
VALUE UNIT’S DEPLETING NATURE
MAY / 2013
TECH UPKEEP &
IMPROVEMENT
SCALE
ECONOMIES
FEATURE
INTEGRATION
NETWORK
EFFECT
BRAND
PRESENCE
SECURITY

13. 13
THE BALANCE BETWEEN THE TWO OPPOSING DYNAMICS
DETERMINES BUSINESS VALUE & OPPORTUNITY FOR
GROWTH
MAY / 2013
SECURITY
BRAND
PRESENCE
TECH UPKEEP &
IMPROVEMENT
FEATURE
INTEGRATION
NETWORK
EFFECT
SCALE
ECONOMIES
WEB
DISTRIBUTION
SHARED
STORAGE
OPEN-
SOURCE
LOW
BARRIERS
CUSTOMER
EXPECTATIONS
MOORE’S
LAW

14. THE VALUE OF THE BUSINESS
THE SUM OF WHAT EXISTS &
WHAT WILL BE
MAY / 2013

15. 15
BROADLY, AN ENTERPRISE CONTAINS TWO VALUE ELEMENTS:
THE CORE ASSET & ITS POSSIBILITIES, (OR A BUSINESS BASE
& ITS OPTIONALITY)
MAY / 2013
CORE
POSSIBILITIES

16. 16
IN THE DISCOUNTING OF FUTURE ECONOMICS (DCF), A
THEORETIC FUTURE VALUE (OR TERMINAL VALUE, OR EXIT)
USUALLY COMPRISES THE BULK OF THE PRESENT OPPORTUNITY
MAY / 2013
CORE
POSSIBILITIES
PROFIT
/LOSS
PROFIT
/LOSS
PROFIT
/LOSS
THIS IS BASED ON THE ASSUMPTION OF
LONG LIFE (PERPETUITY) & A SERIES OF
WILLING FUTURE BUYERS
PRESENT
VALUE
FUTURE

17. 17 MAY / 2013
THESE FUTURE POSSIBILITIES PRESUPPOSE CONTINUING
REINVENTION, RENEWAL & OUTGROWTH FROM THE CORE...
CORE
OPTIONALITY

18. 18
THE UNIQUE TRAITS OF INFORMATION SYSTEMS FORM A
BUSINESS BASE & OPTIONALITY THAT IS PARTICULAR TO
THESE TRAITS...
MAY / 2013
DEPLETING
ASSET
DEFLATIONARY
ECONOMICS
SECURITY
BRAND
PRESENCE
TECH UPKEEP &
IMPROVEMENT
FEATURE
INTEGRATION
NETWORK
EFFECT
SCALE
ECONOMIES
OPTION VALUE
CORE BUSINESS
BASE
... & SHOULD BE EVALUATED ACCORDINGLY

19. FUNDING STRUCTURES
MATCHING ASSET TYPES
WITH CAPITAL SOLUTIONS
MAY / 2013

20. 20
IN THE DESCRIBED CONTEXT, THE BALANCE OF A CORE
BUSINESS BASE & ITS OPTIONALITY WILL VARY ACCORDING TO
STAGES OF THE ENTERPRISE LIFECYCLE...
MAY / 2013
VOLATILITY STABILITY
SPECIALIZATION
EARLY-STAGE /
PURE OPTION
MID-STAGE /
GROWTH
LATE-STAGE /
ASSET
COVERAGE
SCALE
VENTURE
GROWTH
EQUITY
BUYOUT /
DEBT
... TO DETERMINE THE MOST APPROPRIATE
FUNDING FORM...

21. 21
... & THE MOST APPROPRIATE FUNDING TERM TO MATCH THE
THEORETICAL DURATION OF THE UNDERLYING BUSINESS ASSET
MAY / 2013
SHORT-TERM LONG-TERM
TECHNOLOGY NETWORK
INFORMATION SYSTEM PLATFORM

22. 22 MAY / 2013
VENTURE
CAPITAL
BUYOUT
EQUITY
DEBT
CAPITAL
EXIT
MID-
STAGE
REFINANCE
INFORMATION
&
INFO SYSTEMS
TRADITIONAL
MEDIA HARDWARE
COMMERCE
FINANCIAL
MARKETS
INFRASTRUCTURE
GROWTH
EVOLUTION
REINVENTION
OPTION CORE
ASSET
COVERAGE
HEALTHCARE ,
EDUCATION,
OTHERS
IN AN ERA OF CONVERGENCE & TRANSFORMATION, DISTINCTIONS
BETWEEN BUSINESS STAGES & CATEGORIES ARE BLURRING...

23. 23
... WHICH IS ALSO REFLECTED IN A GROWING OVERLAP
BETWEEN FUNDING SOURCES & FINANCING FORMS*...
MAY / 2013
VC /
PRIVATE
EQUITY
BANKS /
FINANCE
CO’S
HEDGE
FUNDS /
INDIVIDUALS
STRATEGIC
CAPITAL
* See CoRise presentation on
Convergence as a Long-Term Trend,
March 2013, for specific examples

24. 24
... INCREASINGLY A PART OF THE SAME INFORMATION &
TECHNOLOGY DYNAMIC BEING FUNDED*...
Principal Principal
Issuer
Builder
Seller
Borrower
Investor
Buyer
Lender
Consumer $ $
$$
MARKETS
MAY / 2013
* See CoRise presentation on
Convergence of Finance & Media,
updated March 2013
INFORMATION
INFORMATION INFORMATION
INFORMATION
INFORMATION INFORMATION
SERVICES
ANALYTICS RESEARCH
RISK TRANSFER
ACCESS
TOOLS

25. 25
... & DEFINED BY THE SAME ECONOMICS & BUSINESS
FUNDAMENTALS
MAY / 2013
DEPLETING
ASSET
DEFLATIONARY
ECONOMICS
SECURITY
BRAND
PRESENCE
TECH UPKEEP &
IMPROVEMENT
FEATURE
INTEGRATION
NETWORK
EFFECT
SCALE
ECONOMIES
OPTION VALUE
CORE BUSINESS
BASE

26. WHERE ARE YOU IN
THIS LANDSCAPE?
WHERE ARE YOU
HEADING?
MAY / 2013

27. 27 MAY / 2013
CORE
OPTIONALITY
DEPLETING
ASSET
DEFLATIONARY
ECONOMICS
VALUE CAPTURE
CAPITAL
FORMATION

28. 28
www.coriseco.com
CoRise Co., LLC
535 Fifth Avenue, 4th floor
New York, NY 10036
Telephone: (646) 532-6690
email: info@coriseco.com
TO DISCUSS FURTHER:
CONTACT INFORMATION
MAY / 2013