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CONFIDENTIAL
New Investment Model to Enable
Energy Technology Entrepreneurs
CONFIDENTIALCONFIDENTIAL
• Headquartered in the Energy Capital of the world (Houston, TX)
• Focused on revenue generating companies that emerge out of
exclusively owned SURGE venture program
• Partners with leading energy companies that serve as Investors,
Customers, and Mentors to our portfolio
• Recruits globally and invests locally into Houston based Energy
Service focused entrepreneurs using technology as advantage
• Owns exclusive ecosystem of top industry experts and entrepreneurs
in energy technology
• Develops loyal bench of talent through large alumni base and deep
industry connections
“The premier destination for Energy Entrepreneurs”
2
INTRODUCING SURGE VENTURES
CONFIDENTIALCONFIDENTIAL
Executive Summary
Investment Thesis
History
Operating Model
Market Overview
Investment Scope and Strategy
People and Partners
Track Record
CONTENTS
3
CONFIDENTIALCONFIDENTIAL
SURGE FUND V OFFERING
$50M FUND DEDICATED TO EARLY STAGE ENERGY TECHNOLOGY
4
§ Located in the Energy Capital
(Houston); vertically focused on
Energy technology.
§ Leveraging SURGE, top energy
investment program and proprietary
global deal flow.
§ Partnering w/ leading energy
companies that serve as advisers and
co-investors.
§ Targeting revenue producing energy
entrepreneurs using capital efficient
technologies (software and ‘smart’
hardware) for market advantage.
§ Becoming the first institutional investor
(Pre-Seed, Seed, and Series A) with
follow-on investments to maintain
ownership position.
INVESTMENT FOCUS AND MODEL OVERVIEW OF FUND STRUCTURE
Fund Size $50M
First Close $15M (Fall 2015)
Fund Life 10 years
Commitment
period
4 years
Management Fee 2.5% (life of fund avg.)
Carried Interest 20% to GP
GP Commitment Minimum of 1%
Minimum LP
Commitment
$250,000 individual;
$1M institutional
Executive Summary
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FUND THESIS
SURGE FUND V ADDRESSES A GAP IN THE ENERGY TECH VC SPACE
SURGE IS A
NATURAL OWNER
§ COMPETITIVE ADVANTAGE: SURGE has created a hard to replicate network of corporate
partners/sponsors/investors/ mentors to help its portfolio companies; CVCs actively look to
us as a pipeline for later stage investments
§ TRACK RECORD: SURGE has raised four funds in Houston with continued early success
(even in low oil prices) of portfolio tracking to venture returns.
§ UNCAPTURED VALUE: Fund V is a natural extension of previous funds as it monetizes the
value created by the Accelerator. The fund will only co-invest to maintain the ecosystem
with broader access to exit options within and outside the energy industry
GREAT MARKET
§ ENERGY DISRUPTION: The Oil & Gas industry is experiencing dramatic changes driven by a
broad shift to unconventional resources (e.g. shale, deepwater). Legacy utility businesses
also appear poised for large changes, as demand stagnates and distributed generation gains
ground.
§ SOFTWARE EATING THE WORLD: VC investment is fueling rapid innovation in digital
technologies, leading to dramatic cost improvements and changes in business models
across industries. There has been limited disruption in energy to date until now.
§ CREW CHANGE AND COST PRESSURE: Generational turnover, coupled with ongoing cost
pressures, are driving faster adoption of low cost digital innovation
WITH A GAP
§ COASTAL VCS AREN’T IN THE GAME: VC powerhouses on the coasts have never invested
in traditional energy, and don’t have the local presence or relationships needed to be
successful
§ MATURATION OF LOCAL ENERGY VC FUNDS: Successful energy VCs in Texas have moved
to bigger check sizes, focusing primarily in Series B/B+ or growth capital investments
§ CORPORATE VC AND ANGELS ARE ONLY A PARTIAL SOLUTION: Angels make very early
stage investments, but lack the supporting ecosystem and process to support (not only
finance) young companies. Corporate VC is active in energy, but only has capacity for later
stage investments (Series B+)
5
Investment Thesis
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IMPACT OF OIL PRICES
LOW OIL PRICES SPURS INVESTMENT INTO ENERGY TECHNOLOGY
Urgency to Reduce Costs
Increased Speed of Acquisitions
Opportunistic Valuations
Acceleration of Crew Change
Through emerging technological
solutions
§ Engineered fracking
§ Drilling automation
§ Predictive maintenance
Large service companies that have
access to cash will acquire
technological capabilities at lower
prices
Early stage investors will be in a better
position to negotiate valuations with
companies
Forced retirements drives the on-
boarding of tech-savvy leadership who
will demand vs. resist technology
adoption
Slow Buying Decisions
Reduced Investment Capital
Customers who are cash constrained
will procrastinate new technology
implementation
Non-O&G investors will become
increasingly cautious to invest in
industry startups during times of
uncertainty
6
Investment Thesis
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SURGE VALUE PROPOSITION
BRIDGING BOTH SIDES OF THE ENERGY TECHNOLOGY CHASM
History
PROPRIETARY & GLOBAL
DEAL FLOW
1,000+ Companies Annually from
Proprietary Sources:
§ Industry Network (partnerships with
top Super Majors, NOC’s, Service Co’s
and Independents)
§ SURGE Brand + Global Rankings
§ SURGE Alumni Network
§ SURGE Accelerator Applications
Process
§ Oil Country Partnerships (Canada,
Norway, Brazil, Middle East)
§ McKinsey Partnership
§ University Energy Clubs
§ Proprietary Search Methodologies
DEEP INDUSTRY PARTNERSHIPS
Validation of SURGE Value Proposition:
Major Industry players Serve as Advisers,
Investors, and Customers
Right Ideas,
Right teams
Internal
Champions
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KEY LESSONS LEARNED
TRACKING TO VENTURE RETURNS,BELIEVE CAN SUBSTANTIALLY IMPROVE
History
• Invest into what we know
• Engage industry partners earlier
• Focus on later staged entrepreneurs
• Retain pro-rata rights
• Focus has allowed us to see bigger
patterns
• Develop long-term capital partners
that know energy
• Early stage venture model is best
entry point, but not the only way
• Be exclusive
• Build a great team
KEY LESSONS KEY ACTIONS
S4 portfolio focused on key themes
Send deals, screen, and sit on IAC
S4 portfolio is revenue generating
Investing S5 into portfolio winners
Creating investment strategies that
align for multiple roll-up / PE plays
New fund and corporate partners
help fill gap in funding landscape
Working with capital partners not
required to force early venture exits
Exclusive McKinsey & Energy Industry
corporate partnerships
Team has deep industry expertise,
experience in larger roles, & fit values
CONFIDENTIALCONFIDENTIAL
SURGE SELECTION PROCESS
RIGOROUS AND INDUSTRY-DRIVEN
9
AUG 2014
SEP 2014
1,000 COMPANIES
8 COMPANIES
CUSTOMER REVIEWNOV 2014
FEB 2015
100 COMPANIES
40 COMPANIES
MENTOR REVIEW
SURGE REVIEW
Operating Model
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THE SURGE BUSINESS MODEL
BUILD & MAINTAIN
PROPRIETARY
INDUSTRY
ECOSYSTEM
§ Corporate
Partners Serve as
Experts,
Customers,
Investors
§ 200 Exclusive
Industry Experts
MODEL BUILT FROM INSIDE THE INDUSTRY
DEVELOP & FOCUS
ON KEY THEMES
Driven by…
§ Corporate
Partners Use
Cases
§ Library of 3,000
companies
reviewed since
SURGE inception
MAKE GREAT DEALS
§ SURGE only co-
invests in Venture
Program graduates
in order to ensure
market discipline
§ SURGE receives 4%
- 8% equity into all
companies
participating into
Venture Program
(initial deal provides
10x return on
invested capital
from day 1).
§ SURGE receives a
right to invest into
next round to keep
pro-rata and/or $1M,
whichever is
greater.
§ SURGE has largest
benchmark of
priced deals in
Energy Tech to
know best terms
Operating Model
DEVELOP DEEP
BENCH OF LOYAL
ALUMNI
Alumni Provide…
§ Feedback Loop on
What Works and
Lessons Learned
§ Insight into the
Customer
§ Relationships and
Connections
10
Subsurface Operations
PowerIOT &
Hardware
FIND & ASSESS “A”
PLAYER
ENTREPRENEURS
§ Review 1,000
companies
annually from all
over the world
Due Diligence
Includes:
§ Industry Partners
§ 4 – 12 month
intensive program
§ 200 Industry
Experts serve as
Advisors
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FUND V VALUE PROPOSITION
WHY THIS FUND WILL SUCCEED WHILE OTHERS FAILED
11
DEVELOP & FOCUS
ON KEY THEMES
O&G VCs
MAKEGREAT
DEALS
FIND & ASSESS “A”
PLAYER
ENTREPRENEURS
DEVELOP DEEP
BENCH OF LOYAL
ALUMNI
X
BUILD & MAINTAIN
PROPRIETARY
INDUSTRY ECOSYSTEM
X
X
X X
X
X
X
X
X
X
X
X
X
Market Overview
WEST
COAST
VC’s
SURGE
TEXAS VC’s
SCF
PARTNERS
GENERIC PE
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COMPETITIVE LANDSCAPE
HAVING 1ST POSITION GIVES SURGE FLEXIBILITY
12
SEED/SERIES A SERIES B/C GROWTH & LATER STAGE
FINANCIALSSTRATEGICS
ENERGY VCs
CORPORATE
R&D
ENERGY VCs
CORPORATE VCs
TRADITIONAL PEs
OIL FIELD SERVICE AND SOFTWARE
ACQUIRERS
Some opportunistic investmentsin
Seed/Series A by later stage investors
Market Overview
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OUTSOURCING INNOVATION
COMPANIES ARE LOOKING OUTSIDE TO SOURCE INNOVATION
13
Market Overview
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O&G LAGS IN TECHNOLOGY ADOPTION
A VIEW FROM 10 YEARS AGO
14
Market Overview
SOURCE: McKinsey analysis
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NEW INDUSTRY DYNAMICS REQUIRE COST CONTROL
OIL PRICE BAND
Price floor
driven by OPEC
countries’ fiscal
requirements.
Price ceiling
driven by
competition
from natural gas,
solar, etc.
COST OF
PRODUCTION
(2014)
SMALLER
DISCOVERY
SIZE
HARSHER
LOCALES
ENVIRONMENT/
SAFETY COSTS
LABOR
COSTS
LEARNING
CURVE/
STANDARDIZATION
TECHNOLOGY COST OF
PRODUCTION
(2030)
CONCEPTUAL
*Statoil’s Helge Lund and Samir Brikho, head of UK-based services company AMEC, at the 21st World Petroleum Congress
“Return on capital for major oil companies has
decreased by a third in the last decade even
though the oil price has tripled in the same
timeframe.”
- Statoil’s Helge Lund and AMEC’s Samir Brikho*
INDUSTRY DEPENDENT ON TECHNOLOGY
15
Market Overview
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CREW CHANGE TO ACCELERATE ADOPTION
RETIREMENT APPROACHING FOR LARGE COHORT OF MGMT
Likely to retire in the
next 5-10 years
• A cohort of very traditional
leaders will retire, putting
decision making power in the
hands of younger employees
demanding technology solutions
• Current leadership will seek to
mitigate talent and knowledge
gaps through the transition with
automation
• Higher prices for scarce talent will
further drive cost efficient
solutions
ROUGHLY 40% OF OIL & GAS EMPLOYEES WILL
BE UP FOR RETIREMENT IN 5-10 YEARS
WE EXPECT THIS TURNOVER ACCELERATE
THE PACE OF INNOVATION
Sources: Schlumberger, McKinsey Insights, Industry press
16
Market Overview
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“SOFTWARE EATING THE WORLD”
OIL & GAS IS STARTING TO CLIMB THE DIGITAL INNOVATION LADDER
DIGITAL INFRASTRUCTURE
DIGITAL TRANSPARENCY
DIGITAL INSIGHT
The oil and gas industry is predicted to spend over $33 billion by 2022 on oilfield
intelligence solutions to address key industry challenges such as managing labor
shortages, maintaining license to operate, reducing capital expenditure, and
increasing efficiency and production.
Current oilfield intelligence solutions are expensive, dependent on communication
technologies that can be antiquated and may soon be retired, and often include a
software interface that can be difficult to use and are limited with regard to
interoperability and scale.*
*SOURCE: WellAware Press Release 2014
Example companies driving adoption of digital
solutions in the energy space...
17
Market Overview
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DATA IS THE FASTEST GROWTH FOR O&G
INCLUDES IT, DATA, AND ANALYTICS
18
Market Overview
EBITDA	Margins
<15% 15-25% >25%
>8%5-8%<5%
Market	growth
38.3 32.3
36.0
17.6
60.0
46.1
30.0
87.8
8.7
LNG	plants	&	
equipment
Pipe,	Fittings	
and	valves	
(PVF)Onshore	
construction	
services
Rig	con-struction
yards
Facility	inspection	
and	maintenance
Land	contract	
drilling	rigs
Onshore	
logistics
Other	
operational	
services
Insulation	and	
surface	
services
1.3
0.1
0.3
0.4
1.5
9.8
14.7
9.7
11.1
38.0
0.5
7.7
Geoscience	
software
Well	design	
software
Production	
operations	
software
Flow	optimization	
software
Oil	&	Gas	
data
Completion	
equipment
Subsea	
equipment SURF
Artificial	lift
Offshore	
construction	
services
Coring
Subsea	
intervention	
and	IMR
16.9
Siesmic data	acqui-
stion and	processing
0.8 Geoscience	
consulting
2.5
Geophysical	
equipment
21.2
Drilling	
systems
3.7Drilling	
tools
4.9Drilling	
bits
27.0
Drilling	&	
completion	fluids
17.3Chemicals
21.1
OCTG
6.1
Surface	equipment
1.8
Subsea
installation
6.7
Facility
leasing
17.9
Engineering	design
5.8
Other	construc-
tion services
55.0
Offshore
contract
drilling	rigs
16.0
Supply	
vessels
3.4 Floating	produc-
tion services
6.5
Petroleum
aviation
3.8
Base	
logis-
tics
3.5
Casing	&	tubing
8.0
Fishing	&
re-entry
9.5
Cementing
14.3
Wireline
logging
1.2
Surface	
data	
logging
3.6
Logging	while
drilling	(LWD)
13.2
Directional
drilling	services
4.8
Production
testing
5.7
Coiled	
tubing	
services
34.7
Hydraulic
fracturing
2.5
Compression
7.0
Well
servicing9.9
Automation/
Electro-
maintenance
SOURCE:	Rystad Energy;	Spears	&	Associates;	Barclays	E&P;	IHS Herold;	McKinsey;	Team	analysis
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ENERGY TECHNOLOGY INVESTMENTS
FOCUS ON SOFTWARE AND CAPITAL EFFICIENT HARDWARE
19
Subsurface Operations
Hardware Power/Utilities
* Prospective SURGE IV companies included
Investment Scope & Strategy
AUTHOR ADMINISTER AUT
Terrabotics
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SURGE TEAM
GENERAL PARTNER WITH ENTREPRENEURIAL AND DOMAIN EXPERTISE
KIRK COBURN
20
BACKGROUND:
§ Founder of SURGE Accelerator
§ Lead SURGE Investor
§ 3X Successful Entrepreneur
§ Led Pricing & Supply Chain at Dell
§ MBA and BBA in finance and
accounting from UT Austin.
RELEVANT EXPERIENCE:
§ Houston native with entrepreneurism in his blood.
Kirk’s Grandfather ran West Texas oil fields during
WWII, and Kirk’s father founded/exited an Energy
IT Services Firm sold to Carlyle Group
§ Founded SURGE Accelerator and has led 34
investments during 2012-14
§ Active Angel Investor in Energy Technology with
40+ investments
§ Developed deep relationships with the technology
investment community (Angels, VCs, Corporates)
§ Founder and CEO of Chief Outsiders (acq. 2010),
a Houston-based company with offices in Texas,
Florida, Georgia, and New York
§ Launched The PGA TOUR Network on Sirius XM
(acq. by SIRI) with successful 12X Cash on Cash
return in less than 4 years.
People & Partners
ROBERT REDFORD
BACKGROUND:
§ Actor
§ Entrepreneur
§ Cool Dude
§ Looks Similar to Partner on Left
§ Other Cool Stuff
RELEVANT EXPERIENCE:
§ Does it really matter?
CONFIDENTIALCONFIDENTIAL21
SURGE ADVISORS
KEY PARTNERS SERVING TO HELP GUIDE SURGE STRATEGY
People & Partners
LEADERSHIPADVISORS CORPORATEADVISORS
VIP
Director & Board
XXXXXXX
VIP
Board Member
XXXXXX
VIP
CEO
XXXXXX
TBA
Managing Director
Oil & Gas Private Equity
VIP
Largest Energy Operator
VIP
Largest Company
in Energy
VIP
Large Oilfield Services
VIP
Large National Energy Co
VIP
Large Customer
TBA
VIP
VIP
VIP
VIP VIP
VIP VIP
VIP
CONFIDENTIALCONFIDENTIAL
EXTENDED NETWORK OF MENTORS
72
57
21
Oil and Gas
Cleantech/Other
Power
• Upstream
• Downstream
• Midstream
• Water
• Generation
• T&D
• Renewable
• Energy Efficiency
• Energy Storage
• Risk Management
• Other
72
108
59
67
Services
Technical
Business
Investment
• HR
• Legal / IP
• IT
• Marketing
• Finance
• Management
• CEO / C level
• Pricing
• Supply Chain
• Private Equity
• Venture Capital
# OF MENTORS BY SECTOR # OF MENTORS BY JOB FUNCTION
• Engineering
• Software
• CTO
• Cyber Security
36 Entrepreneurs, 114 Executives
>200 EXPERTS VOLUNTEER FOR DUE DILIGENCE & BOARD ADVISORY
People & Partners
22
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GOVERNANCE
3 COMMITTEES PROVIDE STRATEGIC INPUT AND FUND GOVERNANCE
Provides strategic direction
on portfolio, partnerships,
and funding
Provides critical input on
individual investment
decisions
Provides fund governance
and resolves potential
conflicts of interest
CORPORATE
ADVISORY BOARD
INVESTMENT
ADVISORY COMMITTEE
LP
ADVISORY COMMITTEE
GENERAL PARTNERS
FAMILY OFFICES
PRIVATE EQUITY
OTHER ADVISORS
VENTURE CAPITAL
CORPORATE PARTNERS
LIMITED PARTNERS
GENERAL PARTERS
23
People & Partners
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VC & PE / SYNDICATE RELATIONSHIPS
EXPANSIVE NETWORK OF FOLLOW-ON CAPITAL PARTNERS
SURGE continues to build out a vast network of capital providers and strategic partners
suitable for Series A-B co-investments and later stage funding.
24
People & Partners
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TRACK RECORD
Vintage Years 2012, 2013, 2014
Actual Performance at 12/31/2014 | On Track for 5x Return by 2020
25
Track Record
$ MILLIONS
Cash on Cash
5.09x
TVPI
9.53x
Program	Expenses	/	Reserved	Capital
Cash on Cash
.94x
TVPI
1.76x
Removed	Logos	to	
Protect	Alumni
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CASE STUDY – Molecule Software (SURGE 1)
A SaaS Cloud based ETRM (Energy and Trading Risk Management)
solution that replaces the existing inflexible legacy software with
long and costly installation and integration costs
Molecule + SURGE in 2015
Molecule founders had a simple
“idea” that incumbent ETRM
solutions are archaic.
A SURGE mentor referred Molecule
to SURGE as a potential investment
SURGE was impressed by the
depth of founders’ hands-on
knowledge in this space compared
to other startups in this space
ETRM industry is a $1B market. 4
players own 2/3 of the market.
None provide SaaS solutions
Dynamic acquisition market
• PE buys Triple point ($900M)
• Brady buys Viz Risk ($15M)
• Eka buys EnCompass ($20M)
• OpenLink buys SolArc ($150M)
§ PRODUCT DEVELOPMENT: SURGE provided the original
capital to incubate the idea and launch the first product
§ FUNDING: SURGE helped raise $2M led by Mercury Fund
§ TEAM: SURGE helped surround the founders with a board
composed of leaders in BP Trading and Houston Federal
reserve
§ SUCCESS TO DATE:
• Has grown to 10 people
• In less than 3 years, approaching feature parity with
incumbents
• Has participated in competitive bids against incumbents
such as OpenLink and Triple Point and won
• Expecting to reach $250K ARR by Q1, 2015
§ EXIT PROSPECTS: Starting to receive soft offers in the range
equivalent to EnCompass acquisition ($15-$20M)
Molecule in 2011
26
Potential return multiple of 20-30X on initial investment
Keeping	this	Data	Private	to	Protect	the	Innocent
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CASE STUDY – Meshify (SURGE 2)
The IOT for Oilfield Services. Integrated hardware and software
company that connects distributed assets (oilfield equipment and
other devices) to key distributed decision makers on any device in
any location.
Meshify + SURGE by 2018
Meshify provided home automation
equipment focused on energy
efficiency.
The SURGE team met the two
founders at a Houston
entrepreneurship networking event.
SURGE was impressed with the team’s
NOV background and technical
knowledge of the hardware & software
stack in IOT.
50 Billion devices are expected to
come online over next 10 years. There
was no clear player focused in Oil &
Gas (largest asset base for IOT).
Acquisition Market very strong:
• Controls Company = 10x Revenue
• M2M Ecosystem = 15x Revenue
• Vertical Market = 8x Revenue
• Strategic Acquisition = 25x Revenue
§ LANDED MARQUEE CUSTOMER: SURGE introduced Meshify
to its first marquee customer which is shaping the revenue
model and competitive advantage.
§ GENERATED RECURRING REVENUE: Company generated
$250k in recurring revenue in 2014 with a run-rate to exit
2015 of over $1.3M based upon SURGE introductions.
§ RAISED ADDITIONAL CAPITAL: Company has run a lean and
a capital efficient business with the support of SURGE
investment. Company has raised a $1M bridge round with the
support of SURGE to extend its runway prior to a capital
raise at a higher valuation.
§ SUCCESS TO DATE:
§ Landed large oil field service company as marquee
customer and other key pilot customers
§ Team has grown to 10 people & recruited star insider
§ Visibility to $30M in revenue by 2018 w/ subset of
industry customers. Other non-energy IOT companies
have exited between 8x – 25x revenue.
Meshify in 2012
27
Current run-rate equates into 6X return for SURGE Investment
Keeping	this	Data	Private	to	Protect	the	Innocent
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CASE STUDY – SEE Forge (SURGE 3)
Collect, automate and visualize field-based paperwork
to improve profits. A complete mobile cloud-based
solution to automate all field based paperwork by using
a simple FatFinger™ app.
SEE Forge+ SURGE in 2015
SEE Forge was founded in 2012 in
Perth, Australia.
Won 2nd place for best mobile
technology in Australia judged by
ZAPP Awards in February 2013.
Founder initially moved to California to
meet investors, but customer inquiries
were coming from Houston.
Company was referred to SURGE by
investors and energy entrepreneurs
and arrived with a beta product in
place.
SEE Forge was the poster child for
data capture and crew change
solutions. Company secured $1M
financing round in the first week of the
SURGE Venture program.
§ PRODUCT DEVELOPMENT: SURGE mentor and investor, Raj
Singal, joined as CTO to lead a rebuild of its beta product.
Integration into any system (QuickBooks, ERP, SAP etc.) with
robust real time reporting and dashboard analytics.
§ FUNDING: SURGE helped the company to an immediate $1M
funding round.
§ TEAM: Recently poached Tibco’s Global Energy Director
(champion of its Spotfire Oil & Gas roll out) to lead business
development. Team is now 11 strong.
§ SUCCESS TO DATE:
• $250k recurring revenue in 2014 (6 mo’s) with strong $1M+
pipeline for 2015.
• Landed first enterprise customer
• POC launched with major integrated operator.
§ EXIT PROSPECTS:
• Already recognized by top investment banks as an emerging
player in competitive landscape.
• Partnerships with Microsoft, NOV, Sonim, Box.net and Siemens.
SEE Forge in 2013
28
Comparable SaaS Exits in the 6X-8X LT Revenue
Keeping	this	Data	Private	to	Protect	the	Innocent
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CASE STUDY – Guard 1 (SURGE 4)
Turning a security staffing company to a technology provider at the
oilfield gate guard
Guard 1 + SURGE by 2018
Guard 1 provides manned security
services at the gate guards
#2 Player in the market
Recently developed an App that
runs on Guard 1 IPads and enables
digital data capture and remote
and instantaneous access to the
information
The value add from the data opens
a few tangible applications:
• Reduction of billings when
compared with actual delivery of
services at the gate
• Reduction of waiting times/fees
for the trucks at the gate
• Improved safety and security by
recording who is in the field
§ TECHNOLOGY KNOW-HOW: Guard 1 approached SURGE to
leverage our experience in building technology companies.
§ TEAM: SURGE in-house CTO (Raj Singal) acting as interim
CTO to develop a 3 year technology road map
§ STRATEGY: SURGE helping to position Guard 1 as “itunes of
the oilfield apps” due to its physical access to customers
§ ACQUISITIONS/PARTNERSHIPS: In discussions with SURGE
portfolio companies (Greasebook, SEEForge, NeoTreks) to
acts as distributor of others “apps” to the oilfield
§ ACCESS TO CUSTOMERS: SURGE is making introductions to
CFO level customers (partially through partnership with
McKinsey & Company), to land more customers
§ GROWTH
Guard 1 in 2014
29
Implies potential return multiple of 45X on initial investment
$Million
Existing manned
services
Unmanned
Cameras
Platform for
other Apps
Licensing to
non-oilfield Total
Revenues 2014 12 0 0 0 12
Revenues 2018 18 2 4 1 25
Valuation increase 3.5 10 20 5 39
Keeping	this	Data	Private	to	Protect	the	Innocent
CONFIDENTIALCONFIDENTIAL
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the Fund, and is not to be reproduced or used for any other purpose. This Presentation and the
information contained herein may not be reproduced or distributed nor may its contents be disclosed to
persons not directly involved with the prospective Investor’s decision regarding the purchase of the
offered securities without the prior written consent of SURGE Venture Partners.
DISCLAIMER
30

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SURGE Ventures Series Seed & "A" Fund Pitch Deck

  • 1. CONFIDENTIAL New Investment Model to Enable Energy Technology Entrepreneurs
  • 2. CONFIDENTIALCONFIDENTIAL • Headquartered in the Energy Capital of the world (Houston, TX) • Focused on revenue generating companies that emerge out of exclusively owned SURGE venture program • Partners with leading energy companies that serve as Investors, Customers, and Mentors to our portfolio • Recruits globally and invests locally into Houston based Energy Service focused entrepreneurs using technology as advantage • Owns exclusive ecosystem of top industry experts and entrepreneurs in energy technology • Develops loyal bench of talent through large alumni base and deep industry connections “The premier destination for Energy Entrepreneurs” 2 INTRODUCING SURGE VENTURES
  • 3. CONFIDENTIALCONFIDENTIAL Executive Summary Investment Thesis History Operating Model Market Overview Investment Scope and Strategy People and Partners Track Record CONTENTS 3
  • 4. CONFIDENTIALCONFIDENTIAL SURGE FUND V OFFERING $50M FUND DEDICATED TO EARLY STAGE ENERGY TECHNOLOGY 4 § Located in the Energy Capital (Houston); vertically focused on Energy technology. § Leveraging SURGE, top energy investment program and proprietary global deal flow. § Partnering w/ leading energy companies that serve as advisers and co-investors. § Targeting revenue producing energy entrepreneurs using capital efficient technologies (software and ‘smart’ hardware) for market advantage. § Becoming the first institutional investor (Pre-Seed, Seed, and Series A) with follow-on investments to maintain ownership position. INVESTMENT FOCUS AND MODEL OVERVIEW OF FUND STRUCTURE Fund Size $50M First Close $15M (Fall 2015) Fund Life 10 years Commitment period 4 years Management Fee 2.5% (life of fund avg.) Carried Interest 20% to GP GP Commitment Minimum of 1% Minimum LP Commitment $250,000 individual; $1M institutional Executive Summary
  • 5. CONFIDENTIALCONFIDENTIAL FUND THESIS SURGE FUND V ADDRESSES A GAP IN THE ENERGY TECH VC SPACE SURGE IS A NATURAL OWNER § COMPETITIVE ADVANTAGE: SURGE has created a hard to replicate network of corporate partners/sponsors/investors/ mentors to help its portfolio companies; CVCs actively look to us as a pipeline for later stage investments § TRACK RECORD: SURGE has raised four funds in Houston with continued early success (even in low oil prices) of portfolio tracking to venture returns. § UNCAPTURED VALUE: Fund V is a natural extension of previous funds as it monetizes the value created by the Accelerator. The fund will only co-invest to maintain the ecosystem with broader access to exit options within and outside the energy industry GREAT MARKET § ENERGY DISRUPTION: The Oil & Gas industry is experiencing dramatic changes driven by a broad shift to unconventional resources (e.g. shale, deepwater). Legacy utility businesses also appear poised for large changes, as demand stagnates and distributed generation gains ground. § SOFTWARE EATING THE WORLD: VC investment is fueling rapid innovation in digital technologies, leading to dramatic cost improvements and changes in business models across industries. There has been limited disruption in energy to date until now. § CREW CHANGE AND COST PRESSURE: Generational turnover, coupled with ongoing cost pressures, are driving faster adoption of low cost digital innovation WITH A GAP § COASTAL VCS AREN’T IN THE GAME: VC powerhouses on the coasts have never invested in traditional energy, and don’t have the local presence or relationships needed to be successful § MATURATION OF LOCAL ENERGY VC FUNDS: Successful energy VCs in Texas have moved to bigger check sizes, focusing primarily in Series B/B+ or growth capital investments § CORPORATE VC AND ANGELS ARE ONLY A PARTIAL SOLUTION: Angels make very early stage investments, but lack the supporting ecosystem and process to support (not only finance) young companies. Corporate VC is active in energy, but only has capacity for later stage investments (Series B+) 5 Investment Thesis
  • 6. CONFIDENTIALCONFIDENTIAL IMPACT OF OIL PRICES LOW OIL PRICES SPURS INVESTMENT INTO ENERGY TECHNOLOGY Urgency to Reduce Costs Increased Speed of Acquisitions Opportunistic Valuations Acceleration of Crew Change Through emerging technological solutions § Engineered fracking § Drilling automation § Predictive maintenance Large service companies that have access to cash will acquire technological capabilities at lower prices Early stage investors will be in a better position to negotiate valuations with companies Forced retirements drives the on- boarding of tech-savvy leadership who will demand vs. resist technology adoption Slow Buying Decisions Reduced Investment Capital Customers who are cash constrained will procrastinate new technology implementation Non-O&G investors will become increasingly cautious to invest in industry startups during times of uncertainty 6 Investment Thesis
  • 7. CONFIDENTIALCONFIDENTIAL7 SURGE VALUE PROPOSITION BRIDGING BOTH SIDES OF THE ENERGY TECHNOLOGY CHASM History PROPRIETARY & GLOBAL DEAL FLOW 1,000+ Companies Annually from Proprietary Sources: § Industry Network (partnerships with top Super Majors, NOC’s, Service Co’s and Independents) § SURGE Brand + Global Rankings § SURGE Alumni Network § SURGE Accelerator Applications Process § Oil Country Partnerships (Canada, Norway, Brazil, Middle East) § McKinsey Partnership § University Energy Clubs § Proprietary Search Methodologies DEEP INDUSTRY PARTNERSHIPS Validation of SURGE Value Proposition: Major Industry players Serve as Advisers, Investors, and Customers Right Ideas, Right teams Internal Champions
  • 8. CONFIDENTIALCONFIDENTIAL8 KEY LESSONS LEARNED TRACKING TO VENTURE RETURNS,BELIEVE CAN SUBSTANTIALLY IMPROVE History • Invest into what we know • Engage industry partners earlier • Focus on later staged entrepreneurs • Retain pro-rata rights • Focus has allowed us to see bigger patterns • Develop long-term capital partners that know energy • Early stage venture model is best entry point, but not the only way • Be exclusive • Build a great team KEY LESSONS KEY ACTIONS S4 portfolio focused on key themes Send deals, screen, and sit on IAC S4 portfolio is revenue generating Investing S5 into portfolio winners Creating investment strategies that align for multiple roll-up / PE plays New fund and corporate partners help fill gap in funding landscape Working with capital partners not required to force early venture exits Exclusive McKinsey & Energy Industry corporate partnerships Team has deep industry expertise, experience in larger roles, & fit values
  • 9. CONFIDENTIALCONFIDENTIAL SURGE SELECTION PROCESS RIGOROUS AND INDUSTRY-DRIVEN 9 AUG 2014 SEP 2014 1,000 COMPANIES 8 COMPANIES CUSTOMER REVIEWNOV 2014 FEB 2015 100 COMPANIES 40 COMPANIES MENTOR REVIEW SURGE REVIEW Operating Model
  • 10. CONFIDENTIALCONFIDENTIAL THE SURGE BUSINESS MODEL BUILD & MAINTAIN PROPRIETARY INDUSTRY ECOSYSTEM § Corporate Partners Serve as Experts, Customers, Investors § 200 Exclusive Industry Experts MODEL BUILT FROM INSIDE THE INDUSTRY DEVELOP & FOCUS ON KEY THEMES Driven by… § Corporate Partners Use Cases § Library of 3,000 companies reviewed since SURGE inception MAKE GREAT DEALS § SURGE only co- invests in Venture Program graduates in order to ensure market discipline § SURGE receives 4% - 8% equity into all companies participating into Venture Program (initial deal provides 10x return on invested capital from day 1). § SURGE receives a right to invest into next round to keep pro-rata and/or $1M, whichever is greater. § SURGE has largest benchmark of priced deals in Energy Tech to know best terms Operating Model DEVELOP DEEP BENCH OF LOYAL ALUMNI Alumni Provide… § Feedback Loop on What Works and Lessons Learned § Insight into the Customer § Relationships and Connections 10 Subsurface Operations PowerIOT & Hardware FIND & ASSESS “A” PLAYER ENTREPRENEURS § Review 1,000 companies annually from all over the world Due Diligence Includes: § Industry Partners § 4 – 12 month intensive program § 200 Industry Experts serve as Advisors
  • 11. CONFIDENTIALCONFIDENTIAL FUND V VALUE PROPOSITION WHY THIS FUND WILL SUCCEED WHILE OTHERS FAILED 11 DEVELOP & FOCUS ON KEY THEMES O&G VCs MAKEGREAT DEALS FIND & ASSESS “A” PLAYER ENTREPRENEURS DEVELOP DEEP BENCH OF LOYAL ALUMNI X BUILD & MAINTAIN PROPRIETARY INDUSTRY ECOSYSTEM X X X X X X X X X X X X X Market Overview WEST COAST VC’s SURGE TEXAS VC’s SCF PARTNERS GENERIC PE
  • 12. CONFIDENTIALCONFIDENTIAL COMPETITIVE LANDSCAPE HAVING 1ST POSITION GIVES SURGE FLEXIBILITY 12 SEED/SERIES A SERIES B/C GROWTH & LATER STAGE FINANCIALSSTRATEGICS ENERGY VCs CORPORATE R&D ENERGY VCs CORPORATE VCs TRADITIONAL PEs OIL FIELD SERVICE AND SOFTWARE ACQUIRERS Some opportunistic investmentsin Seed/Series A by later stage investors Market Overview
  • 13. CONFIDENTIALCONFIDENTIAL OUTSOURCING INNOVATION COMPANIES ARE LOOKING OUTSIDE TO SOURCE INNOVATION 13 Market Overview
  • 14. CONFIDENTIALCONFIDENTIAL O&G LAGS IN TECHNOLOGY ADOPTION A VIEW FROM 10 YEARS AGO 14 Market Overview SOURCE: McKinsey analysis
  • 15. CONFIDENTIALCONFIDENTIAL NEW INDUSTRY DYNAMICS REQUIRE COST CONTROL OIL PRICE BAND Price floor driven by OPEC countries’ fiscal requirements. Price ceiling driven by competition from natural gas, solar, etc. COST OF PRODUCTION (2014) SMALLER DISCOVERY SIZE HARSHER LOCALES ENVIRONMENT/ SAFETY COSTS LABOR COSTS LEARNING CURVE/ STANDARDIZATION TECHNOLOGY COST OF PRODUCTION (2030) CONCEPTUAL *Statoil’s Helge Lund and Samir Brikho, head of UK-based services company AMEC, at the 21st World Petroleum Congress “Return on capital for major oil companies has decreased by a third in the last decade even though the oil price has tripled in the same timeframe.” - Statoil’s Helge Lund and AMEC’s Samir Brikho* INDUSTRY DEPENDENT ON TECHNOLOGY 15 Market Overview
  • 16. CONFIDENTIALCONFIDENTIAL CREW CHANGE TO ACCELERATE ADOPTION RETIREMENT APPROACHING FOR LARGE COHORT OF MGMT Likely to retire in the next 5-10 years • A cohort of very traditional leaders will retire, putting decision making power in the hands of younger employees demanding technology solutions • Current leadership will seek to mitigate talent and knowledge gaps through the transition with automation • Higher prices for scarce talent will further drive cost efficient solutions ROUGHLY 40% OF OIL & GAS EMPLOYEES WILL BE UP FOR RETIREMENT IN 5-10 YEARS WE EXPECT THIS TURNOVER ACCELERATE THE PACE OF INNOVATION Sources: Schlumberger, McKinsey Insights, Industry press 16 Market Overview
  • 17. CONFIDENTIALCONFIDENTIAL “SOFTWARE EATING THE WORLD” OIL & GAS IS STARTING TO CLIMB THE DIGITAL INNOVATION LADDER DIGITAL INFRASTRUCTURE DIGITAL TRANSPARENCY DIGITAL INSIGHT The oil and gas industry is predicted to spend over $33 billion by 2022 on oilfield intelligence solutions to address key industry challenges such as managing labor shortages, maintaining license to operate, reducing capital expenditure, and increasing efficiency and production. Current oilfield intelligence solutions are expensive, dependent on communication technologies that can be antiquated and may soon be retired, and often include a software interface that can be difficult to use and are limited with regard to interoperability and scale.* *SOURCE: WellAware Press Release 2014 Example companies driving adoption of digital solutions in the energy space... 17 Market Overview
  • 18. CONFIDENTIALCONFIDENTIAL DATA IS THE FASTEST GROWTH FOR O&G INCLUDES IT, DATA, AND ANALYTICS 18 Market Overview EBITDA Margins <15% 15-25% >25% >8%5-8%<5% Market growth 38.3 32.3 36.0 17.6 60.0 46.1 30.0 87.8 8.7 LNG plants & equipment Pipe, Fittings and valves (PVF)Onshore construction services Rig con-struction yards Facility inspection and maintenance Land contract drilling rigs Onshore logistics Other operational services Insulation and surface services 1.3 0.1 0.3 0.4 1.5 9.8 14.7 9.7 11.1 38.0 0.5 7.7 Geoscience software Well design software Production operations software Flow optimization software Oil & Gas data Completion equipment Subsea equipment SURF Artificial lift Offshore construction services Coring Subsea intervention and IMR 16.9 Siesmic data acqui- stion and processing 0.8 Geoscience consulting 2.5 Geophysical equipment 21.2 Drilling systems 3.7Drilling tools 4.9Drilling bits 27.0 Drilling & completion fluids 17.3Chemicals 21.1 OCTG 6.1 Surface equipment 1.8 Subsea installation 6.7 Facility leasing 17.9 Engineering design 5.8 Other construc- tion services 55.0 Offshore contract drilling rigs 16.0 Supply vessels 3.4 Floating produc- tion services 6.5 Petroleum aviation 3.8 Base logis- tics 3.5 Casing & tubing 8.0 Fishing & re-entry 9.5 Cementing 14.3 Wireline logging 1.2 Surface data logging 3.6 Logging while drilling (LWD) 13.2 Directional drilling services 4.8 Production testing 5.7 Coiled tubing services 34.7 Hydraulic fracturing 2.5 Compression 7.0 Well servicing9.9 Automation/ Electro- maintenance SOURCE: Rystad Energy; Spears & Associates; Barclays E&P; IHS Herold; McKinsey; Team analysis
  • 19. CONFIDENTIALCONFIDENTIAL ENERGY TECHNOLOGY INVESTMENTS FOCUS ON SOFTWARE AND CAPITAL EFFICIENT HARDWARE 19 Subsurface Operations Hardware Power/Utilities * Prospective SURGE IV companies included Investment Scope & Strategy AUTHOR ADMINISTER AUT Terrabotics
  • 20. CONFIDENTIALCONFIDENTIAL SURGE TEAM GENERAL PARTNER WITH ENTREPRENEURIAL AND DOMAIN EXPERTISE KIRK COBURN 20 BACKGROUND: § Founder of SURGE Accelerator § Lead SURGE Investor § 3X Successful Entrepreneur § Led Pricing & Supply Chain at Dell § MBA and BBA in finance and accounting from UT Austin. RELEVANT EXPERIENCE: § Houston native with entrepreneurism in his blood. Kirk’s Grandfather ran West Texas oil fields during WWII, and Kirk’s father founded/exited an Energy IT Services Firm sold to Carlyle Group § Founded SURGE Accelerator and has led 34 investments during 2012-14 § Active Angel Investor in Energy Technology with 40+ investments § Developed deep relationships with the technology investment community (Angels, VCs, Corporates) § Founder and CEO of Chief Outsiders (acq. 2010), a Houston-based company with offices in Texas, Florida, Georgia, and New York § Launched The PGA TOUR Network on Sirius XM (acq. by SIRI) with successful 12X Cash on Cash return in less than 4 years. People & Partners ROBERT REDFORD BACKGROUND: § Actor § Entrepreneur § Cool Dude § Looks Similar to Partner on Left § Other Cool Stuff RELEVANT EXPERIENCE: § Does it really matter?
  • 21. CONFIDENTIALCONFIDENTIAL21 SURGE ADVISORS KEY PARTNERS SERVING TO HELP GUIDE SURGE STRATEGY People & Partners LEADERSHIPADVISORS CORPORATEADVISORS VIP Director & Board XXXXXXX VIP Board Member XXXXXX VIP CEO XXXXXX TBA Managing Director Oil & Gas Private Equity VIP Largest Energy Operator VIP Largest Company in Energy VIP Large Oilfield Services VIP Large National Energy Co VIP Large Customer TBA VIP VIP VIP VIP VIP VIP VIP VIP
  • 22. CONFIDENTIALCONFIDENTIAL EXTENDED NETWORK OF MENTORS 72 57 21 Oil and Gas Cleantech/Other Power • Upstream • Downstream • Midstream • Water • Generation • T&D • Renewable • Energy Efficiency • Energy Storage • Risk Management • Other 72 108 59 67 Services Technical Business Investment • HR • Legal / IP • IT • Marketing • Finance • Management • CEO / C level • Pricing • Supply Chain • Private Equity • Venture Capital # OF MENTORS BY SECTOR # OF MENTORS BY JOB FUNCTION • Engineering • Software • CTO • Cyber Security 36 Entrepreneurs, 114 Executives >200 EXPERTS VOLUNTEER FOR DUE DILIGENCE & BOARD ADVISORY People & Partners 22
  • 23. CONFIDENTIALCONFIDENTIAL GOVERNANCE 3 COMMITTEES PROVIDE STRATEGIC INPUT AND FUND GOVERNANCE Provides strategic direction on portfolio, partnerships, and funding Provides critical input on individual investment decisions Provides fund governance and resolves potential conflicts of interest CORPORATE ADVISORY BOARD INVESTMENT ADVISORY COMMITTEE LP ADVISORY COMMITTEE GENERAL PARTNERS FAMILY OFFICES PRIVATE EQUITY OTHER ADVISORS VENTURE CAPITAL CORPORATE PARTNERS LIMITED PARTNERS GENERAL PARTERS 23 People & Partners
  • 24. CONFIDENTIALCONFIDENTIAL VC & PE / SYNDICATE RELATIONSHIPS EXPANSIVE NETWORK OF FOLLOW-ON CAPITAL PARTNERS SURGE continues to build out a vast network of capital providers and strategic partners suitable for Series A-B co-investments and later stage funding. 24 People & Partners
  • 25. CONFIDENTIALCONFIDENTIAL TRACK RECORD Vintage Years 2012, 2013, 2014 Actual Performance at 12/31/2014 | On Track for 5x Return by 2020 25 Track Record $ MILLIONS Cash on Cash 5.09x TVPI 9.53x Program Expenses / Reserved Capital Cash on Cash .94x TVPI 1.76x Removed Logos to Protect Alumni
  • 26. CONFIDENTIALCONFIDENTIAL CASE STUDY – Molecule Software (SURGE 1) A SaaS Cloud based ETRM (Energy and Trading Risk Management) solution that replaces the existing inflexible legacy software with long and costly installation and integration costs Molecule + SURGE in 2015 Molecule founders had a simple “idea” that incumbent ETRM solutions are archaic. A SURGE mentor referred Molecule to SURGE as a potential investment SURGE was impressed by the depth of founders’ hands-on knowledge in this space compared to other startups in this space ETRM industry is a $1B market. 4 players own 2/3 of the market. None provide SaaS solutions Dynamic acquisition market • PE buys Triple point ($900M) • Brady buys Viz Risk ($15M) • Eka buys EnCompass ($20M) • OpenLink buys SolArc ($150M) § PRODUCT DEVELOPMENT: SURGE provided the original capital to incubate the idea and launch the first product § FUNDING: SURGE helped raise $2M led by Mercury Fund § TEAM: SURGE helped surround the founders with a board composed of leaders in BP Trading and Houston Federal reserve § SUCCESS TO DATE: • Has grown to 10 people • In less than 3 years, approaching feature parity with incumbents • Has participated in competitive bids against incumbents such as OpenLink and Triple Point and won • Expecting to reach $250K ARR by Q1, 2015 § EXIT PROSPECTS: Starting to receive soft offers in the range equivalent to EnCompass acquisition ($15-$20M) Molecule in 2011 26 Potential return multiple of 20-30X on initial investment Keeping this Data Private to Protect the Innocent
  • 27. CONFIDENTIALCONFIDENTIAL CASE STUDY – Meshify (SURGE 2) The IOT for Oilfield Services. Integrated hardware and software company that connects distributed assets (oilfield equipment and other devices) to key distributed decision makers on any device in any location. Meshify + SURGE by 2018 Meshify provided home automation equipment focused on energy efficiency. The SURGE team met the two founders at a Houston entrepreneurship networking event. SURGE was impressed with the team’s NOV background and technical knowledge of the hardware & software stack in IOT. 50 Billion devices are expected to come online over next 10 years. There was no clear player focused in Oil & Gas (largest asset base for IOT). Acquisition Market very strong: • Controls Company = 10x Revenue • M2M Ecosystem = 15x Revenue • Vertical Market = 8x Revenue • Strategic Acquisition = 25x Revenue § LANDED MARQUEE CUSTOMER: SURGE introduced Meshify to its first marquee customer which is shaping the revenue model and competitive advantage. § GENERATED RECURRING REVENUE: Company generated $250k in recurring revenue in 2014 with a run-rate to exit 2015 of over $1.3M based upon SURGE introductions. § RAISED ADDITIONAL CAPITAL: Company has run a lean and a capital efficient business with the support of SURGE investment. Company has raised a $1M bridge round with the support of SURGE to extend its runway prior to a capital raise at a higher valuation. § SUCCESS TO DATE: § Landed large oil field service company as marquee customer and other key pilot customers § Team has grown to 10 people & recruited star insider § Visibility to $30M in revenue by 2018 w/ subset of industry customers. Other non-energy IOT companies have exited between 8x – 25x revenue. Meshify in 2012 27 Current run-rate equates into 6X return for SURGE Investment Keeping this Data Private to Protect the Innocent
  • 28. CONFIDENTIALCONFIDENTIAL CASE STUDY – SEE Forge (SURGE 3) Collect, automate and visualize field-based paperwork to improve profits. A complete mobile cloud-based solution to automate all field based paperwork by using a simple FatFinger™ app. SEE Forge+ SURGE in 2015 SEE Forge was founded in 2012 in Perth, Australia. Won 2nd place for best mobile technology in Australia judged by ZAPP Awards in February 2013. Founder initially moved to California to meet investors, but customer inquiries were coming from Houston. Company was referred to SURGE by investors and energy entrepreneurs and arrived with a beta product in place. SEE Forge was the poster child for data capture and crew change solutions. Company secured $1M financing round in the first week of the SURGE Venture program. § PRODUCT DEVELOPMENT: SURGE mentor and investor, Raj Singal, joined as CTO to lead a rebuild of its beta product. Integration into any system (QuickBooks, ERP, SAP etc.) with robust real time reporting and dashboard analytics. § FUNDING: SURGE helped the company to an immediate $1M funding round. § TEAM: Recently poached Tibco’s Global Energy Director (champion of its Spotfire Oil & Gas roll out) to lead business development. Team is now 11 strong. § SUCCESS TO DATE: • $250k recurring revenue in 2014 (6 mo’s) with strong $1M+ pipeline for 2015. • Landed first enterprise customer • POC launched with major integrated operator. § EXIT PROSPECTS: • Already recognized by top investment banks as an emerging player in competitive landscape. • Partnerships with Microsoft, NOV, Sonim, Box.net and Siemens. SEE Forge in 2013 28 Comparable SaaS Exits in the 6X-8X LT Revenue Keeping this Data Private to Protect the Innocent
  • 29. CONFIDENTIALCONFIDENTIAL CASE STUDY – Guard 1 (SURGE 4) Turning a security staffing company to a technology provider at the oilfield gate guard Guard 1 + SURGE by 2018 Guard 1 provides manned security services at the gate guards #2 Player in the market Recently developed an App that runs on Guard 1 IPads and enables digital data capture and remote and instantaneous access to the information The value add from the data opens a few tangible applications: • Reduction of billings when compared with actual delivery of services at the gate • Reduction of waiting times/fees for the trucks at the gate • Improved safety and security by recording who is in the field § TECHNOLOGY KNOW-HOW: Guard 1 approached SURGE to leverage our experience in building technology companies. § TEAM: SURGE in-house CTO (Raj Singal) acting as interim CTO to develop a 3 year technology road map § STRATEGY: SURGE helping to position Guard 1 as “itunes of the oilfield apps” due to its physical access to customers § ACQUISITIONS/PARTNERSHIPS: In discussions with SURGE portfolio companies (Greasebook, SEEForge, NeoTreks) to acts as distributor of others “apps” to the oilfield § ACCESS TO CUSTOMERS: SURGE is making introductions to CFO level customers (partially through partnership with McKinsey & Company), to land more customers § GROWTH Guard 1 in 2014 29 Implies potential return multiple of 45X on initial investment $Million Existing manned services Unmanned Cameras Platform for other Apps Licensing to non-oilfield Total Revenues 2014 12 0 0 0 12 Revenues 2018 18 2 4 1 25 Valuation increase 3.5 10 20 5 39 Keeping this Data Private to Protect the Innocent
  • 30. CONFIDENTIALCONFIDENTIAL This PowerPoint presentation (the “Presentation”) is being provided to certain selected qualified prospective investors on a confidential basis for informational and discussion purposes only and may not be relied on in any manner as legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in the investment fund described herein (the “Fund”). A private offering of interests in the Fund will only be made pursuant to a confidential memorandum or presentation, a Limited Partnership Agreement and subscription documents related thereto, which will be furnished to qualified investors on a confidential basis. The interests in the Fund have not been, nor will they be, registered under the U.S. Securities Act of 1933, as amended, or qualified or registered under any applicable state, local, provincial or other statutes, rules or regulations. This Presentation (as amended or supplemented in writing from time to time), is provided on a confidential basis solely for the information of those persons to whom it is provided and their professional advisers so that they may consider an investment in the limited partnership interests (the “Interests”) in the Fund, and is not to be reproduced or used for any other purpose. This Presentation and the information contained herein may not be reproduced or distributed nor may its contents be disclosed to persons not directly involved with the prospective Investor’s decision regarding the purchase of the offered securities without the prior written consent of SURGE Venture Partners. DISCLAIMER 30