Evolutionary, Revolutionary and Disruptive:New Opportunities In Mass-Market Health

Vergency combines technologies from different industries to seize opportunities in the new consumer-focused health care market

•  Health is rapidly transforming into an industry focused on individual consumers!

•  The technologies that could serve the new health consumers are often stranded in large corporations!

•  Vergency specializes in liberating these stranded health technolgies and combining them into profitable new mass-market offers!

Health is rapidly transforming into an industry focused on individual consumers!

•  Health care traditionally has cured diseases through large institutions – think hospitals and pharaceutical companies – with deep technocratic expertise!

•  Things are changing now, as aging populations are overwhelming traditional health care systems and consumers increasingly expect new technologies to give them individual, proactive control of their health!

•  So the next few years will see highly profitable opportunities in health products that respond to this emerging tidal wave of consumer demand!

Health care traditionally has cured diseases through large institutions – think hospitals and pharaceutical companies – with deep technocratic expertise!

TRADITIONAL HEALTH CARE INDUSTRIAL MODEL

Largeinstitution

Centralizedengineering

Delivery via standardizd protocols+ =

Things are changing now, as aging populations are overwhelming traditional health care systems and consumers increasingly expect new technologies to give them individual, proactive control of their health!

NEW CONSUMER-DRIVEN HEALTH MARKET

Individual consumer Centralizedengineering Dynamic marketplace+ =Variety of choices

So the next few years will see highly profitable opportunities in health products that respond to this emerging tidal wave of consumer demand!

NEXT OPPORTUNITIES IN HEALTH CARE

APPS! NEUTRACEUTICALS! HEALTH TOURISM! MOOD FOOD!

PILLS WITH DATA! SMART SPACES! DYNAMIC INSURANCE! WELLNESS TREATMENTS!

HOME DIAGNOSTICS! REMOTE FAMILY DOCTOR! HEALTH COACHES! SELF-MANAGED !HEALTH DATA!

PERSONALIZED MEDICINE! HOME MEDICAL EQUIPMENT! PILL-ON-DEMAND! DIAGNOSTIC WEARABLES!

The technologies that could serve the new health consumers are often stranded in large corporations!

•  Many large corporations have created innovative technology offerings that could be highly profitable in the new consumer health market!

•  But while they are good at creating innovative technologies, these same corporations are bad at getting them profitably to market!

•  Stranded by regulations and conventional thinking, these technologies need bespoke networks to connect to the right business models and distribution!

Many large corporations have created innovative technology offerings that could be highly profitable in the new consumer health market!

Hi

Lo

Volume of innovation efforts Last 10 years

Core process

Process

Enabling process

Business model

Finance

Networking Product performance

Offering

Product system

Service Channel

Delivery

Brand Customer experience

Source: Doblin, Chigaco

Corporate innovation efforts are typically focused on their product offering …

But while they are good at creating innovative technologies, these same corporations are bad at getting them profitably to market!

… while most of the the value is created on finance and customer delivery sides …

Hi

Lo

Core process

Process.

Enabling process

Business model

Finance

Networking Product performance

Offering

Product system

Service Channel

Delivery

Brand Customer experience

Vergency areas of focus

Cumulative value creation – last 10 years: Less than 2% of projects produced 90% of the value…

Stranded by regulations and conventional thinking, these technologies need bespoke networks to connect to the right business models and distribution!

… therefore Vergency unlocks the value of stranded assets by combining the missing elements through networks …

Technologies stranded!in corporate silos …!

… need a common vision !and a strong network …!

… to be convened with missing !elements into value-creating companies!

Vergency specializes in liberating stranded health technologies and combining them into profitable new mass-market offers!

•  The Vergency team has extensive entreprenerial experience in fund management, technology transfer, and health care innovation.!

•  Vergency creates new commercial opportunities by doing what individual companies cannot – engineering a space where technologies can be combined into new products!

•  Whether the new companies are sold back to their originators or others – or spun out in an IPO – Vergency will generate substantial return for investors!

Investment Scenario 1: Bottom-of-pyramid opportunity to create scalable network-based business that directly and profitably improves family health in developing nations!

[HYPOTHETICAL]!

INVESTEE 1a: Farming family services!Multi-billion-$,100+ year-old !manufacturer of grain-processing!technologies in 120 countries!Value: CSR gains by offering grain-growing families alternative to payment in de-husked grain currently driving child malnutrition; competitive advantage vs. traditional mills!Deal format: Exclusive supplier of advanced payment system – bolt-on to existing mills!

INVESTEE 1b: Payments !Advanced, muli-modal corporate payments system; existing tech + team; ready for rapid growth!Value: Enables many formats of payment, including insurance premiums and reimbursement!Deal format: Equity investment or!long-term territory licencee!!

INVESTEE 1c: Kiosk Village kiosk network for data-supported delivery of water and other critical health products; regional trial currently turning over $1M/year; ready for rapid growth!Value: Creates access to delivery in villages where individual residences do not have addresses!Deal format: Equity investment!!

INVESTEE 1d: Power !Village-based freestanding solar energy company prioviding battery power to families!Value: Leaps capital-intesive energy networks to anchor free-standing businesses in each village!Deal format: Equity investment!!!!

Developing nations health ecosytem: Sophisticated payment and home-delivery

networks give BOP families access to critical health inputs: water, nutrition-

dense food, electricity, micro-insurance, etc.

Investment Scenario 2: Integrated digital health information infrastructure and services ecosystem supports new ways of fostering the health of individuals through carefully curated…!

[HYPOTHETICAL]!

INVESTEE 1a !xx!Value: xxx!Deal format: xxx!

INVESTEE 1b: Adherence !xx!Value: xxx!Deal format: xxx!!

INVESTEE 1c xx!Value: xxx!Deal format: xxx!!

INVESTEE 1d: Wearables data AI!xx!Value: xxx!Deal format: xxx!!!!

Digital health ecosytem: xxx

The Vergency team has extensive entreprenerial experience in fund management, technology transfer, and health care innovation.!

Wolfgang Renz (MD, PhD) was President of International Business at Physicians Interactive. Formerly, he served as Corporate Vice President of Business Model & HealthCare Innovation at Boehringer Ingelheim. At Boehringer, he led a team of specialists to find, test, and develop the disruptive technologies that will shape the way health care will be delivered in the future. He is Adjunct Professor of Surgery at McGill University’s Faculty of Medicine and holds a medical degree and a PhD from Freiburg University.

Jens Maier (PhD, MBA, MEng) is a consultant, entrepreneur, and business school teacher (University of St. Gallen and London Business School). At Daimler Benz Aerospace he was Head of Management Development and Vice President Governmental Affairs, and at Zurich Financial Services he served as Head of Capability Development. He holds a PhD (Warwick), an MBA (Bradford) and an MEng (Hamburg). He is the author of “The Ambidextrous Organization – exploring the new while exploiting the now.”!

Trained at McKinsey & Company, John Knechtel is a serial innovator, consultant, and entrepreneur. Most recently – as Co-Founder & Chief Operating Officer at Sparkup Inc. – an online marketplace for IP – John helped build the company’s product and engineered the firm’s acquisition by the UK’s Big Innovation Centre. Previously, John created the multidisciplinary think-tank Alphabet City, which produced a anthology series – paired with an annual ideas festival – with The MIT Press

Toni Rinow (Ph.D., MBA, Eng.) is a leader in company and fund management. Toni’s brainpower in science & engineering is the source of her early understanding of new technologies, creative imagining of new ideas, and assessment of their future viability. She has overseen large portfolios (at Fonds FTQ with $400M+ in life science and venture funds). Her experience includes $100M+ in licensing, R&D transfer, and research commercialization. Her financial transaction expertise includes IPOs, banks, crown corporations, venture capital.

Bill Smith is the Founder and CEO of Brand Acumen and Chairman and managing Director at Harrison Hayes, a Life Science Venture Capital Firm. Bill is responsible for naming products which have generated over $1 Trillion in revenue for his clients. He has penned such iconic brand names as Escalade (Cadillac), XBox (Microsoft),, Avastin (Roche), and Element (Honda). Harrison Hayes manages a family of Venture Funds including BioArbitrage Funds I, II and III and The Orphanetics Rare Disease Innovation Fund.!

Vergency creates new commercial opportunities by doing what individual companies cannot – engineering a space where stranded technologies can be combined into new products!

VERGENCY’S CONVERGENCE ENGINE

Network: !Vergency team has the relationships required to access opportunties across relevant industries!!• Currently produce convergence seminar series for corporate leaders!!• Team members publishing convergence book series!!• Brand Acumen/Harrison Hayes clientele!!• Linklaters round tables on sustainable innovation in health care!!• & cetera!!

Catalyst: !C-suite relationships that will drive action by corporate partners to move projects into Vergency!

• Building an agenda for growth through convergence!!• Identify convergence assets!!• Generate new convergence opportunities!

Asset:!Technology projects stranded inside innovation units of corporate partners!

• !

Accelerator:!Convergence project that combines technology assets and drives commercialization!

!• Create a strong hypothesis on value-creating combination!!• Add missing elements!!• Engineer new converged product!!• Take to market and grow!!• Exit!

Whether the new companies are sold back to their originators, acquired, or spun out in an IPO – Vergency will generate substantial returns for investors!

VERGENCY FUND SPECIFICATIONS

Target ROI: 20 to 25% (6 x LP investment) Fund size: $250M Maximum investor commitment: $50M Exits: within 5 to 7 years through acquisition, IPO, or sale back to originating corporation Size of investments: $5M - $10M Invstment characteristics: Later-phase projects with mature technologies Management fees: 2.5 % GP carried interest: 20 %