Chicago Startup Scene

The City That Works is A Startup Hub

Jeff CarterThought leader Co-Founded Hyde Park Angels in April 2007 (Angel 1) the Midwestrsquos leading angel group Helped start other angel groups

Successful Has made over 19 successful early stage investments many getting follow on rounds

Highly competitive Works Knows how to win Self employed since 1986

Respected Elected by peers to CME Board and ran several committees Strategic Planning and Budget Committee

High integrity Tells you straight means what he says and follows through BS University of Illinois and Chicago Booth MBA Member of the National World War Two Museum Board

LinkedIncominjeffreyrcarterenblogs every day at PointsAndFigurescompointsnfigures on Twitter

Table of ContentsI Startups Society and TrendsII Current Conditions in MidwestIII Where and When to InvestIV What Makes a Great InvestmentV What Does an Angel DoVIAngel Math Angel MistakesVIICrowdfundingVIIIWhat You Can DoIXQ+A

ldquoStartups are transforming our society Over the past 100 years wersquove gone from an industrial era to a post information era where the network is rapidly disrupting the hierarchy and transforming

the way we work and liverdquo

-Brad Feld Foundry GroupBoulder CO

Changing SocietyChanging Technology

Startups Seem Cool

When Startups Start Out

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Jeff CarterThought leader Co-Founded Hyde Park Angels in April 2007 (Angel 1) the Midwestrsquos leading angel group Helped start other angel groups

Successful Has made over 19 successful early stage investments many getting follow on rounds

Highly competitive Works Knows how to win Self employed since 1986

Respected Elected by peers to CME Board and ran several committees Strategic Planning and Budget Committee

High integrity Tells you straight means what he says and follows through BS University of Illinois and Chicago Booth MBA Member of the National World War Two Museum Board

LinkedIncominjeffreyrcarterenblogs every day at PointsAndFigurescompointsnfigures on Twitter

Table of ContentsI Startups Society and TrendsII Current Conditions in MidwestIII Where and When to InvestIV What Makes a Great InvestmentV What Does an Angel DoVIAngel Math Angel MistakesVIICrowdfundingVIIIWhat You Can DoIXQ+A

ldquoStartups are transforming our society Over the past 100 years wersquove gone from an industrial era to a post information era where the network is rapidly disrupting the hierarchy and transforming

the way we work and liverdquo

-Brad Feld Foundry GroupBoulder CO

Changing SocietyChanging Technology

Startups Seem Cool

When Startups Start Out

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Table of ContentsI Startups Society and TrendsII Current Conditions in MidwestIII Where and When to InvestIV What Makes a Great InvestmentV What Does an Angel DoVIAngel Math Angel MistakesVIICrowdfundingVIIIWhat You Can DoIXQ+A

ldquoStartups are transforming our society Over the past 100 years wersquove gone from an industrial era to a post information era where the network is rapidly disrupting the hierarchy and transforming

the way we work and liverdquo

-Brad Feld Foundry GroupBoulder CO

Changing SocietyChanging Technology

Startups Seem Cool

When Startups Start Out

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

ldquoStartups are transforming our society Over the past 100 years wersquove gone from an industrial era to a post information era where the network is rapidly disrupting the hierarchy and transforming

the way we work and liverdquo

-Brad Feld Foundry GroupBoulder CO

Changing SocietyChanging Technology

Startups Seem Cool

When Startups Start Out

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Startups Seem Cool

When Startups Start Out

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

When Startups Start Out

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

When Startups Are Successful

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Networks not HierarchiesOrganizations operate from top down Software and technology enables them to be flatter fleeter and first

Everything Will Be UnbundledOrganizations that are generalists will be disintermediated by focused competitors that engage specialized business silos

Everyone is a Node on the NetworkMobile technology makes everyone a node on the network they operate in

Software is Eating the WorldThe way we produce interact and transact enabling flatter customized chains of distribution and peer to peer networks

ldquoWhatrsquos different today is that we are seeing on a daily basis revolutionary new ideas devices and form factors not evolutionary enhancementsrdquo-Arvind Sodhani Intel Capital in the WSJ (Jan 1 2014)

The MegaTrends

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Government not equipped to keep upTechnological and social change is happening so fast government bureaucracy is too large and inefficient to keep pace 63 of the federal budget goes to entitlements today (Uber Airbnb)

Rise of the SolopreneurMobile technology makes everyone a node on the network they operate in This has deep ramifications for the way we work where we work when we work and how we work It also has implications to how we raise and educate our children(Food Trucks Independent Consultants RIAs)

Bitcoin and Mobile Paymentsnew technology is mobile enabled closes loopholes and strings in internet technology and provides a searchable online transparent accountability function

The Minor Trends

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Solopreneurs

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Bifurcation of Population

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Rise of Bitcoin

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Itrsquos a New Day in VC Transformation of tech means Startups access global markets 247bull MobileTablet exploding bull 15 billion smartphones were sold last yearbull Everyone socially connected through digitalbull Credit cards designed for ldquoclick to purchaserdquo bull ApplePay iBeacon Bitcoin

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

50x more users than 1999 180x bandwidth speed than 1995People spend 6x more time onlineDid I mention mobile

Technology Has Evolved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Cost to Start Up Dropping

More companies with more opportunity to grow are starting up

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Itrsquos Not 1999 Anymore

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Faster Bigger Better

Everyone connected all the time Bandwidth and speed are getting exponentially faster allowing for more transaction volume

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Speed + MobileMobile Subscribers UP Telecommunication Network Speed UP

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Sales In Mobile Growing

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Best Performing VC Not in SVbull Spark Capital (Boston)bull Union Square Ventures (New York)bull Foundry Group (Boulder)bull Greycroft (New York LA)bull IA Ventures (New York)bull First Mark Capital (New York)bull First Round Capital (New York)

bull Itrsquos time for a revolution in the Midwest

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Midwest Growing

Midwest saw a 101 jump in VC funding from 2013 to 2014 For comparison Silicon Valley saw an 85 jump NYC 59 (source NVCA statistics)

Last year $16 Billion was invested in early stage Chicago startups Last year the Midwest saw over $6 billion in exits

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Evidence of Success

bull In 2013 Chicago startups raised over $1B in venture capital up 169 from 2012 In 2014 $16B

bull 78 companies raised $1M in early stage capital

bull Chicago Named 7 Best Startup Hub In World in 2015 (5 in US)

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Top accelerators in the US are in the Midwest TechStars Capital Innovators Gener8tor Polsky Center

Top Universities and Engineering programs in the MidwestChicago Northwestern Illinois Wisconsin Michigan Purdue

We Got Game

Flyover Country Ready to Play

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

bull Lower valuations than both coasts bull Same upside potentialbull Cheaper labor and physical plant costsbull Access to Fortune 1000 customers locally

Great Value

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

35 Total Investments 2007(1) 2008(2) 2009 (1) 2010 (5) 2011(5) 2012(7) 2013(6) 2014(3) 2015 (5)

In 2013 HPA did 6 new investments and 10 follow on rounds with 1 exit

Invested over $13M and created over 500+ jobs Now has 111 angels and growing to 150

Track Record 3 failures 5 exits and the the rest operating

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

21 Total Investments 2005(1) 2007(1) 2008(2) 2009 (1) 2010 (3) 2011(2) 2012(3) 2013(3) 2014(5) (See all at WestLoopVenturescom)

2 exits 4 no-exit 15 operating (exits were 37x 49IRR 137x 198 IRR)

Jeff Carter Personal Track Record

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

bull Stock markets are at all time highs bull Investing in Real Estate is risky at todayrsquos pricesbull Private Equity is risky too bull Central Banks have artificially pushed interest rates to all time lows Rate increases are a matter of timebull During deflationary or inflationary times traditional assets donrsquot perform

Venture Capital is diversification

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

bull 765 funds raised $266 Billion in 2014 (too many funds chasing to few deals)bull Interest rates will rise hurting returns and

opportunitiesbull Banks arenrsquot lending for leveraged dealsbull Tax reform new debt isnrsquot deductible in Lee-Rubio

billbull Private equity canrsquot afford to buy later stage startup

companies like Uberbull Dow=18000 public companies too expensive to buy and leverage

Private Equity is Dead

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Real Estate Is Dead Too Interest Rates will rise hurting property valuesReal Estate had a huge recovery from 2008 lows alreadyGovernments under pressure and might raise property taxes

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Late Stage VC=similar risks with less returnbull Later stage VC valuations are frothy bull Too much money chasing later stagebull Later stage VC deals are harder to get into with much larger check sizes

Itrsquos Smart to Be Early

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

ldquoEven1113088 more1113088 striking1113088 is1113088 the1113088 frequency1113088 of1113088 winners1113088 across1113088 different1113088 fund1113088 and1113088 deal1113088 sizes1113088 1113088 Deals1113088 in1113088 smaller1113088 funds1113088 and with 1113088smaller1113088 check 1113088sizes1113088 were 1113088two 1113088to 1113088three 1113088times1113088 more1113088 likely1113088 to1113088 produce1113088 ldquoventure1113088 returnsrdquomdashgreater1113088 than1113088 a1113088 3x1113088 TVMmdash than 1113088deals1113088 in1113088 larger1113088 funds111308811130881113088 ldquo

It Pays To Be Early Too

Source StepStone Venture1113088Capital Research Report June 201311130881113088The1113088 Real 1113088Options 1113088of 1113088Silicon1113088Valley11130881113088

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

When DoSuccessful Investors Invest

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

bullOption value of investing bull Each round similar to a call optionbull Keep investing in successful companiesbullMaximize value of capital

Early stage investing has better riskreward ratios

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Access to Capital is EasierAngel List Seed Invest Kickstarter Funders Club (Unbundling of Everything)

Access to Market is EasierEtsy and several democratized online platforms Amazon Ebooks Streaming Television creating new networks (Network Beats Hierarchy)

Get Big and Grow Value in a HurryTwitter Tumblr Braintree all started in 2007 (Everyone a node on a network)

Easier To Grow

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Billion Dollar Companies

More private companies valued at $1 billion or more than ever before

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

bull Federal and State Income Tax Exemptionsbull No tax on gains up to $10M or 10x returnbull Includes state taxbull Must be a C corporationbull Have less than $50M in assets on initial investment bull 5 year holding period

Massive Tax Advantages with Qualified Small Business Stock

Consult tax professional for individual interpretation

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Sources of Deal Flow

Support Resourcesbull BuiltinChicagoorgbull Chicago Innovation Mentorsbull Office Hoursbull Starter Leaguebull Ms Techbull Junto Institute

Tech CoWork Spacesbull 1871bull MatterChicagobull TechNexusbull WeWorkbull Nextspacebull Catapult Chicagobull Chicago Innovation Exchangebull Catalyze Chicagobull Insight PD

University Programsbull Polsky Center (Chicago Booth)bull Levy Center (Northwestern)bull Illinois Launch (Univ of IL)bull Liautaud Center (UIC)bull Knapp Center (IIT)bull Gigot Center (ND)bull Coleman Center (DePaul)bull Weinert Center (Wisconsin)

Angel Groups bull Hyde Park Angels

bull Cornerstone Angels

bull West Suburban Angels

bull Irish Angels

bull TiE Midwestbull Arch Angelsbull MCOINAcceleratorsIncubatorsbull TechStars bull Impact Enginebull The Bunkerbull Family Farmedbull Elm Springbull Leap Innovationsbull Blue 1647bull UI Labsbull REach

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Entrepreneur community is growing from these exits Experienced entrepreneurs are starting new companies

Last year $16B was raised by Chicago startups with over $6B in exits

$800 Million by PayPal Company founded in 2007 exit 2013

$350 Million by Nordstrom Company founded in 2009 exit in 2014

IPO $2 Billion Company founded 2006 exit in 2013

IPO $128 Billion Company founded 2007 exit in 2012

Acquired by SAP $1B+ Founded 1999 exit in 2014

Recent Chicago Exits

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

What Makes A Good Investment

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Would You Have Investedbull Service that lets you profit from unused office space (2012 Desktimeappcom)bull Company that creates memorable experiences for customers and employees

(2012 KapowEventscom)bull Company that does performance reviews in 15 minutes (2014 JuvodHRcom)bull Company that makes it easy to donate money (2014 PublicGoodcom)bull Social network for math and science nerds (founded 2012 Brilliantorg)bull Company that provides free stock market charts (2008 Ychartscom)bull Company that finds you discounted parking (2007 ParkWhizcom 2011

SpotHerocom) bull Company that uses an algorithm to find social sentiment index on companies

and correlate to stock performance(2012 Likefoliocom)bull Company that manages public grants and employs big data analytics and

automates compliance (2013 StreamLinkSoftwarecom)bull Company that creates a ldquorisk numberrdquo for clients (2012 Riskalyzecom)

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Typical Angel Dealsbull Average Valuation is $2-5M pre-money But

coastal valuations much higherbull Most seed rounds are between $300k and

$1M depending on the business (Average is $400k)

bull Seed round should be 12-18 mo runway (company is pre revenue pre product)

bull Angels looking for return Average return for all angel deals is around 27 IRR

bull Typical deal is 7-10 years in lengthbull Angels should look for 30x

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Typical Venture Dealbull Round much larger $10 Million+ pre-money

valuation Most VCs get involved at Series B or later Some in Series A Few do seed

bull Demand a Board Seatbull Maybe but not usually co-investorsbull Money isnrsquot about runway but about growthbull VC looking for outsized ROI (Home Run

Theory)bull Might replace existing management team

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Invest MoneyCreate Customers ConnectionsMentor and AdviseHelp Find Talent for FirmCreate Next Rounds of FinancingCreate Possible ExitsAngels typically donrsquot run companies

What An Angel Does

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

What Do Angels Look Forbull Solve a pain point with a Big Marketbull Betting on the Jockey (initial team)bull Does the entrepreneur want to build a

blow out business or lifestyle businessbull Evidence the product works (no ideas

actual products) and there is demand (customers)

bull Disruption-product should be a game changer in some way

bull Path to Exit (target 30x)

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Industries Angels Likebull Financial Services (Riskalyzecom Ychartscom)bull Consumer Products (SimpleMillscom)bull Health Care Medical Devices bull ITDigital Media bull SaaS Businesses (Desktimeappcom)bull Transportation Logistics (Supply-Visioncom)bull Chemicalsbull Niche Manufacturing (UICOcom NuCurrentcom)

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Industries Angels Donrsquot Like

bull Medical Drugsbull Energy (Gas Solar Wind Drilling)bull Industries that Rely on Selling to Govtbull Industries that need huge start up costs

(Stock Exchanges)

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Economic Turmoil Affects Angels

bull Uncertainty wallets stay closedbull Makes Them avoid industries (real

estate)bull Psychological effectsbull Governments create uncertainty

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Angel MathAssume $1M invested evenly in 10 DealsAssume you exit all in 6 years 125^6=38xROI GoalTypical portfolio5=0x They will bust you lose2=1x The Zombie2=3x The Singles1=30x The Angel Home Run$50000 in Uber returned $80M

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

More Angel MathAngels need to invest in Gazelles not UnicornsGazelles are 30xInvest in a 3M post valuation company sells for 90M you get 30x Most angel deals exit at 20M-60M

Unicorns are Billion dollar plus firms There arenrsquot many of them although they are more prevalent

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Top 11 Angel Mistakes1 Investing in the first deal you see2 Not doing enough or not doing right due diligence3 Investing outside of domain expertise4 Investing at too high a valuation5 Investing in an uncapped convertible note6 Signing docs without an experienced lawyer7 Not reserving additional capital for next rounds8 Investing in fewer than 20 deals9 No long term commitment10Dragging out investment process unnecessarily11Junking up term sheets with dumb terms

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

CrowdFunding Deals

1Are you putting enough capital to work2Do you have a material effect on the company3Can you get access to company reports4Are you getting common or preferred equity5Angels do better hunting as a Wolfpack6Spray and Pray only works in Vegas

There has been plenty written on the pros to crowdfunding and I am not opposed to it But there are risks

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Want Exposure to Early Stage Without Doing the Work

bull Invest in a fundWHYbull Learning curve effectsbull Portfolio bull YOUR TIMEbull TIME

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

Confidential Offering MemorandumWEST LOOP VENTURES LLC January 2015JEFF CARTERWEST LOOP VENTURES LLC 230 WEST SUPERIOR CHICAGO IL 60654 JEFFWESTLOOPVENTURESCOM(312) 203-5270QB14893300002216413927THIS CONFIDENTIAL OFFERING MEMORANDUM (ldquoMEMORANDUMrdquo) HAS BEEN PREPARED SOLELY FOR THE BENEFIT OF INVESTORS INTERESTED IN THE PROPOSED OFFERING OF MEMBERSHIP INTERESTS (THE ldquoSECURITIESrdquo) IN WEST LOOP VENTURES LLC (THE ldquoCOMPANYrdquo) AND CONSTITUTES AN OFFER TO AN OFFEREE ONLY IF THE NAME OF SUCH OFFEREE APPEARS IN THE APPROPRIATE SPACE ON THE COVER HEREOF BY ACCEPTING THIS MEMORANDUM THE RECIPIENT AGREES TO MAINTAIN IN STRICT CONFIDENCE THE CONTENTS HEREOF AND TO UTILIZE THE INFORMATION CONTAINED HEREIN SOLELY FOR THE PURPOSE OF EVALUATING A POTENTIAL INVESTMENT IN THE SECURITIES ANY DISCLOSURE OF THE CONTENTS OF THIS MEMORANDUM WHETHER IN WHOLE OR IN PART WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY IS PROHIBITEDTHE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE ldquo1933

To Get a Formal PPM Please contact Jeff Carter at312-203-5270 or jeffwestloopventurescom

orAttorney Kathleen Swan Quarles and Brady (312) 715-5015 kathleenswanquarlescom

Thanks for your time Would love to have you involved

What Can You Do to Participate1 Become A Customer of A Startup-Even if it means

taking some risk2 Make an Introduction to a Potential Customer3 Mentor Entrepreneurs for FREE 4 Give Startups Feedback5 Talk about the local Startup Community with your

friends neighbors and work associates6 Invest via a local early stage VC fund or angel group7 Encourage local government to support startups by

becoming a customer and easing regulations

• Chicago Startup Scene
• Slide 2
• Slide 3
• Slide 4
• Startups Seem Cool
• When Startups Start Out
• When Startups Are Successful
• Networks not Hierarchies Organizations operate from top down
• Government not equipped to keep up Technological and social cha
• Slide 10
• Bifurcation of Population
• Rise of Bitcoin
• Slide 13
• Slide 14
• Slide 15
• Itrsquos Not 1999 Anymore
• Slide 17
• Speed + Mobile
• Slide 19
• Best Performing VC Not in SV
• Slide 21
• Evidence of Success
• Slide 23
• Slide 24
• Slide 25
• Slide 26
• Slide 27
• Slide 28
• Slide 29
• Slide 30
• Slide 31
• When Do Successful Investors Invest
• Slide 33
• Slide 34
• Slide 35
• Slide 36
• Slide 37
• Slide 38
• What Makes A Good Investment
• Would You Have Invested
• Slide 41
• Slide 42
• Slide 43
• Slide 44
• Slide 45
• Slide 46
• Slide 47
• Slide 48
• Slide 49
• Slide 50
• Slide 51
• Slide 52
• Slide 53
• What Can You Do to Participate