PLANS AND CONTRACTS

STARTECH's relationship with each start-up business and entrepreneurial team, its operational methodologies and its contractual arrangements are based on clear, open and consistent principles and policies.

To ensure the success of the project, it is paramount that the entrepreneurial team and STARTECH work in a spirit of mutual respect and trust. An essential characteristic of any agreement is a genuine commonality of objectives and drivers among all the parties involved.

After a one-day evaluation and selection review, selected projects move on to a two-day intensive planning session. STARTECH and the entrepreneurs agree an overall business plan including financial and marketing objectives, milestones, support requirements, funding requirements and the steps to second stage funding.

Based on the level of progress already achieved by the start-up and the agreed schedule of support requirements, STARTECH signs a contract with the entrepreneurial team defining the working relationship throughout the process of developing the project into a viable freestanding business.

The contract follows a standard format for all projects, and is based on a detailed open checklist of the support to be provided by STARTECH, including funding and ongoing operating expenses.

At the same time, agreement is reached on the allocation by the entrepreneurs of an equity stake in the new company to STARTECH. There may be a "ratchet" provision to allow the start-up team to increase its share of the equity should it perform better than the business plan projections, and thus require less support from STARTECH.

TYPICAL PROJECT PROFILE

 The following characteristics define broadly the profile of projects and entrepreneurs likely to fit the strategy, objectives and capabilities of STARTECH. They are intended to be indicative rather than exclusive.

Technologies
Electronic systems * Semiconductor devices * Computer hardware * Software applications * Communications technologies * Sensor technologies * Materials technologies.

Applications and Industries
Information systems * Telecommunications * Instrumentation and control * Intemet applications * Healthcare * Transportation * Environmental protection * Energy.

Markets
The early-stage businesses supported by STARTECH will have clear potential to meet global rather than simply local market needs.

The Entrepreneurial Team
• The energy, stamina and detemlination to create a substantial business.

• A willingness to bring partners into the team; natural team builders and leaders.

• Clear understanding of the need for tight financial control.

• A total focus on markets and customers, and the application of their technology.

• Genuine enthusiasm about the prospect of working with STARTECH.

COMMERCIAL PARTNERSHIP PRINCIPLES

Structure and Approach
STARTECH PARTNERS LIMITED is a private limited company which exists to participate in the formation and early-stage development of technology-based businesses. SPL provides early seed capital, support services and appropriate management expertise in an integrated package. This approach is geared to achieving rapid transition from start-up project to viable independent company, and thus adding substantial value for the entrepreneurial team, investors and other stakeholders including STARTECH itself.

The STARTECH Contribution
• Rigorous evaluation of a candidate project's commercial viability, resulting in proposed enhancements to it.

• Support for and mentoring of the entrepreneurial team, as required, across a broad range of functional areas through the most difficult stage of the project.

• Intensive involvement of an experienced STARTECH Associate Director.

• Facilities and infrastructure.

• Access to financial and management resources, including early stage seed capital.

• Access to STARTECH's national and international networks of experts and business partners.

• Support and credibility in the second stage funding process.

The Entrepreneurs' Contribution
• The innovative technology-based idea or product.

• Demonstrable technical competitive advantage and substantial lead over competition.

• A fundamental commitment to identifying, understanding and meeting market needs.

•The project "work in progress".

• The drive and determination to build a highly successful business.

What do the Entrepreneurs get out of the deal?
• An accelerated route to a viable operational business.

• Assistance in realising their own potential and that of their business.

• A substantial ownership position in a new company of greatly increased value.

• An intensive learning experience and materially increased personal capabilities and strengths.

• On-going access to the STARTECH organisation and networks.

• An efficient and effective approach to second stage funding, negotiated from a position of strength.

What does STARTECH get out of the deal?

The value which STARTECH adds to the new growing business translates into two elements:

• Part becomes an equity stake commensurate with its contribution to the development of the business.

• Part is realised as cash at the point of second stage funding, and used to support more start-up projects.