Thursday, November 12 th 10 am PST / 1 pm EST
“Lessons from Under Armour”
Presented by:
Jay Turo
CEO
Growthink

• Webinar Protocol
• Current Market Conditions
• Why Invest in Private Companies?
• 5 Best Practices
• Lessons from Under Armour’s Rise to Success
• Who Is Private Company Investing For?
• The Growthink Investment Vehicle

1. 30 Minute Conference Call
2. Questions/comments as we go:
– Type in utilizing GoToWebinar toolbar
3. After Call:
– Survey feedback
– Within 2 hours after the call, you will receive, via email, copies of the reviewed slides and a recording of the presentation

1. STRONG public market performance
• DJIA: Reaches 52-Week High as materials, financial and industrial stock rise.
2. Overall economic conditions improving
• US GDP up 3.5% in 3 rd Quarter
• Due to higher consumer spending
• Improvements in home-building
• Slowdown in the reduction of inventories
• And most importantly, federal government stimulus

1. Had offered best long-term returns of any investment class by far
– Last 10 years: 30%+ annually
2. Driven and dependent on outliers:
– 93% of all early-stage private company investments have a negative or break-even return
– 7% of investments have returns greater than 10x
Fund Type
Early-Stage Priv. Cos.
Venture Capital
NASDAQ
S & P
Real Estate
Inflation
10 Yr.
32.9
16.6
1.9
1.2
2.6
2.4
20 Yr.
21.4
16.9
9.2
8.0
3.6
3.1
Sources: The Wiltbank Angel Report, Scott Shane, “Fools Gold: The
Truth Behind Angel Investing in America, ”The Economist, US
Census, SBA, Bureau of Labor Statistics, Kauffman Index of
Entrepreneurial Activity

1. Internet Deal - Sourcing
2. “Data-Driven” Risk Analysis
3. Exploit the “Pricing Inefficiency Gap”
4. Have a “Technology Bias”
5. “Black Swan,” or “Randomness” Modeling

• One of the many wonders of the
Internet age is deal access
– LinkedIn: 160,000 Companies+
– Facebook: 25,000 Companies+
– BizBuySell: 47,000 Companies+
– RaiseCapital.com: 4,500 Companies seeking capital
• The Funded.com Estimate: Over
1,000,000 U.S. private companies available to/actively seeking outside investors

• “Deal outcomes” databases have made
QUANTUM leaps forward:
– Capital IQ, Venture Source, and BizComps
– Perform regression analysis by:
• SIC code
• Business stage
• Amount of Investment
• Time to exit
• Financials: Projected vs. Actuals
• Fast Follower Data
• Management Team

• Pricing efficiency is the insurmountable obstacle to alpha public market returns
– NOONE consistently beats the public markets
– Those that claim that they do are simply data-mining
• Early-stage private company investing still provides significant opportunity to advantageously price deals
– Far, far more sellers (companies seeking capital) than buyers
(investors seeking companies)
– HUGE information gaps between market participants

• Only 1/3 of early-stage equity investment goes into technology businesses*
– Clean Tech, Healthcare, Computer Hardware and Software
• Likelihood of high technology companies having successful exits for their investors is more than 20x greater than nontechnology companies*
• ONLY invest in technology businesses
*Source: Scott Shane, “Fools Gold: The Truth Behind Angel Investing in America”

• Early-stage private company investing is driven and dependent on outliers:
– 93% of all angel investments have a negative or break-even return
– 7% of investments have returns greater than
10x
• If you are not prepared to invest directly into
“a LOT” of private companies, don’t do it alone
*Sources: The PricewaterhouseCoopers/National Venture Capital
Association MoneyTree Report, Thomson Reuters, The Wiltbank
Angel Report

1. Internet Deal - Sourcing
2. “Data-Driven” Risk Analysis
3. Exploit the “Pricing Inefficiency Gap”
4. Have a “Technology Bias”
5. “Black Swan,” or “Randomness” Modeling

• It was the early '90s. Cottons still dominated the apparel market.
• Playing football at University of Maryland, Plank grew tired of the buckets of sweat that accumulated in the cottons he wore to practice and on the field.
• Plank begin testing fabrics at a local tailor shop in
Beltsville, MD.
• Maxing out his credit cards, Plank ran through seven prototypes with his teammates at Maryland.
• "My first goal was getting athletes to believe in the fact that they needed an alternative to a basic cotton
T-shirt.”

• To infiltrate locker rooms on the college level, Plank had to adopt a different business approach. To be successful, he would have to corner entire teams.
– His first major sale came when an equipment manager from Georgia Tech acquainted with the T-shirts contacted Plank for their first big order
– The deal with Georgia Tech opened the door to a contract with N.C. State

• Then Plank recalls "I'm sitting in grandma's basement in Georgetown, and the phone rings,“ The guy says, 'I'm the head equipment manager for the Atlanta Falcons and we want to buy your shirts.”
– Then the Falcons played the Giants. There, the equipment guy for the Falcons was a mentor to the equipment guy at the Giants and he liked our stuff.“

• The rest is history
• 2008 Revenues: $725 million
• Current market cap (11/12/2009): $1.36 Billion
• Kevin Plank’s Stock Position in Under Armour:
– 12.5 million shares at $27.16 share = approx. $339 million

1. Think long-term.
2. Value of getting in early.
3. Invest in people.
4. Take a shot.
5. Get lucky.

1. Long term investment horizon
– 5 years+
2. Need a “Business” Mindset and looking to invest “thoughtfully”:
– Entrepreneurs & Executives
– Professionals (Doctors,
Lawyers, Accountants, etc.)
– Engineers, Scientists &
Technologists

1. Managed access to a portfolio of early-stage, technology-biased private companies
– Cleantech, Healthcare, Software
2. Less concerned about investment amount than working with the RIGHT investors
– Long-term, fundamental investors
– Business mindset
– Looking to invest thoughtfully
– IRA and Trust Options Available

• Please return our survey
• Contact:
– Ms. Melissa Welch: 310-846-5015
– Email: melissa.welch@growthink.com