Successful Start-Ups: Successful Job Creators Tell Their Story Loudon Owen Managing Partner, McLean Watson Capital MaRS Innovation Summit October 28, 2010

1. VC Story
Oct 28, 2010

2. 2 McLEAN WATSON
MCLEAN WATSON HISTORY
• 1820 Trading Company (Asia)
• ….---…---…
• 1972 School friends
• 1987 – 1994 Softimage Financing & IPO
• 1994 Sale to Microsoft
• 1996 – date: 2 VC funds
• Canada & Asia

3. 3 McLEAN WATSON
Loudon F. McLean Owen
-

4. 4 McLEAN WATSON44
LEADERSHIP & INNOVATION
1st Quebec IPO on Nasdaq 1992 - Softimage
1st Software only fund in
Canada
1996
1st VC in natural resources
technology
Only Canadian VC in this area - 2000
Only Canadian VC in
Singapore/Asia
Since 1999
Unique Asian Investor Links Singapore Government (1999) & Brunei Investment Agency
1st Canadian VC lead IPO in
Singapore
Ntegrator (2005)
1st Canadian VC patent
enforcement/monetization
i4i (2004-2009)

5. 5 McLEAN WATSON55
GROWTH RECORD
Company Stage of Investment MW Role Result
FloNetwork
(email marketing)
2 founders, 1 emp, no product
Lead investor, Chair
Largest investor
Sold to DoubleClick
Fortiva
(data management)
FloNetwork founder incubated
in MW office
Lead investor, Director,
Largest investor
Sold to Proofpoint
i4i
(XML software)
2 founders, no emp or
product
Lead & majority investor, Chair
drove IP strategy
Awarded US$300M &
injunction vs. Microsoft
SkyWave
(satellite M2M, asset
tracking)
4 founders, introducing
product
Lead investor, Chair
MW partner now CEO
Inmarsat - #1 satellite
Telemetry
Softimage
(3D animation SW)
1 founder, 2 emp, no product,
concept only
Lead investors, 2 directors, Co-
COOs for 1 yr
IPO on Nasdaq; sold to
Microsoft for $200m
CTL Immunotherapies
(cancer vaccines)
Incubated in MW office, 1
founder, no emp
Lead investor, Director
Merged to form Mannkind
Now Mannkind pubco -
$800M mkt cap

6. 6 McLEAN WATSON
Asset Management and Security via Satellite

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Integrated Mobile Broadband Network: Wi-Fi, WiMAX and Cellul

8. 8 McLEAN WATSON
Resistivity MT
Unconstrained
Isoclinal View
Looking North
100
Resistivity
Log10
500
1000
5000
10000
35000
Rhyolite Contact
Massive Sulphide
Intersection
Graphitic Argillite
Drillhole Intersection
Points
MT L108
800m
North Rhyolite
Massive Sulphide
IntersectionsChance Mineral Occurrence
Massive Sulphide with Graphite
176,900 tonnes grading 12.8% Zn, 3.24% Pb,
and 178g/t Ag
IT Applied to Geophysics – Underground Snapshot

9. 9 McLEAN WATSON
INVESTING IN PEOPLE
• Success is all about people
• Active role – Chair/lead
• Balance

Vision/operations

Urgency/patience

Energy/maturity

Upside/risk mitigation

Idea/opportunity

10. 10 McLEAN WATSON
i4i

11. 11 McLEAN WATSON1313
Michel Vulpe - Co-Inventor

12. 12 McLEAN WATSON
1994 FILED US patent 5,787,449
• Tweed jackets and
blackboards
• Evangelists
• uncorrelated to the
capital markets in an
inefficient, poorly
understood yet very
important asset class

13. 13 McLEAN WATSON1616
Future Looks Bright…

14. 14 McLEAN WATSON1515
GROWTH

1998 Patent Issues

USPTO – 30,000 seats

9/11: White/Green Papers

15. 15 McLEAN WATSON1717
Tough Times

16. 16 McLEAN WATSON
SURVIVAL?

2002 - massive change in sales pipeline

Internal adjustments

Every second light bulb removed

Refocus on pharma industry

Then more focus...on labels

17. 17 McLEAN WATSON
Tuesday, January 27, 2004 11:24 AM
Loudon Owen
From: mvulpe [mvulpe@i4i.com]
Sent: Tuesday, January 27, 2004 11:24 AM
Subject: patent issues with microsoft
To be very serious here - MS has filed a patent application in the
EU that
appears to be what we are doing in x4o and have been for many
years
- it may also be an infringment on our core patent - the implications
are somewhat obvious
i would think??

18. 18 McLEAN WATSON
May 20, 2009 - 2:35 PM
From: Thomas L. Crisman
[tcrisman@McKoolSmith.com]
Sent: Wednesday, May 20, 2009 2:35 PM
To: Loudon Owen
Subject: RE:
We won 200M
Tom

19. 19 McLEAN WATSON
Verdict - May 20, 2009

20. 20 McLEAN WATSON
Final Judgment
August 11, 2009
• Increased damages
for willfullness, post
verdict infringement,
pre & post verdict
interest
• Damages = $290M
• Permanent Injunction,
Microsoft to remove
Custom XML feature
within 60 days

21. 21 McLEAN WATSON

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23. 23 McLEAN WATSON2828
Twitter, Conan…Apocalypse Word

24. 24 McLEAN WATSON
NEXT STEP

MSFT filed cert application, US Supreme
Court

Amici, $1.3 trillion, 3 million employees

Stay tuned