#1Assembly Bill 75 - 2023 Nevada Certified Investor EXHIBIT C Senate Committee on Judiciary Date: 5-8-2023 Exhibit begins with: C1 Total pages: 7 thru: C7 Presenter: Jeff Saling, Executive Director, StartUpNV Nevada Non-Profit / 501(c)3#2Feasibility Development & Capital Stages Viability Scalability Ideation Concept Validation Product or Service Dev Beta MVP v 1.0 Product Launch Market Validation Revenue Generation Scaling Capital Source Annual Founders Sales AB-75 | Impact Here | Creates New Investors and Opportunties for Startup Projects Friends & Family and/or Debt Pre-Seed Funds & Angels Invests $25k to $250k Pre-Revenue 18-24 months C2 22 < $500k Hyper Growth Seed Funds & Angel Groups Invests $250k to $3M $500k - $1M A Round Funds Invests $5M+ $1M+ 9-16 months AB75/2023 Legislative Session#3. SEC Accredited Investor Rule: The Problem SEC Rules for Private Investing do not serve Nevada О Accredited Investors are permitted invest in private company investments О • $1M net worth - outside of primary residence or $200k+ annual W2 income (individual) or $300k (couple) Accredited Investor Population = US National @ 8.75% vs Nevada @ 3.74% "The rich get richer..." is true - and the gap is widening Private investments are risky, but have high returns and create wealth Protective intentions are admirable, but have unintended consequences Nevada businesses are capital starved - compared to states with more Al's Local investors fund local projects: 80+% of early private capital is local (within 37 miles) Nevada businesses and investors are at a disadvantage C3 AB75 / 2023 Legislative Session#4SEC Accredited Investor Rule: The Solution - AB75 Allow more locals to invest with relevant protections O Nevada Certified Investor О Nevadans with W2 income above $100k or* Nevada's median income* OR Nevadans who operate a business with gross sales above $200k or* 2.5x NV median wage AND Investing less than 10% of their net worth Grows the investor base within Nevada for Nevada projects Local businesses / local high growth startups / private projects / real estate Creates investable projects for VC's at later stages - attracts capital to NV Expands the access to wealth creation opportunities for more Nevadans *whichever is greater C4 AB75 / 2023 Legislative Session#5SB75 Nevada Certified Investor: Examples ● Local Business Example О Business with Annual Revenue of $250k (current value is $300k) Requires $60k in startup capital (20% of the value) Founder sells 60,000 shares at $1 to 250+ Nevada Certified Investors • Founder operates business for 5 years, at a 20% profit ($50k), then sells business for $500k Investors earn dividends for 5 years @ $0.17/share ($0.83), then $1.67/share at sale Every $1 invested returns $2.50 Founder incurs no debt - local investors probably get a discount too! 55 C5 AB75 / 2023 Legislative Session#6SB75 Nevada Certified Investor: Examples Scalable (Venture) Business Example o Technology Business founded by local Computer Science & Business Grads • Requires $250k in startup capital for first 24 months (20% of the value = $1.25M valuation) Founders raise a pre-seed round: 250,000 shares at $1 to 500+ Nevada Certified Investors (20%) Founders raise a $1M seed round 2 years later at a $7.5M valuation (13.3% / 6x) • • Founders raise a $5M A-round 2 years later at $30M valuation (16.7% / 24x) Founders raise a $15M B-round 2 years later at $75M valuation (20% / 60x) • Company acquired for $100M 1 year later (7 years from start) • Founders retain 30% = $30M Nevada Certified Investors (NCI) retain 10% (with dilution) = $10M Every $1 invested by NCI pre-seed investors returns $40 C6 AB75 / 2023 Legislative Session#7Questions & Contact Info Jeff Saling Co-Founder & Executive Director StartUpNV 300 S. 4th St # 180, Las Vegas, NV 89101 450 Sinclair St., Reno, NV 89501 Ph: 775.393.9701 e: [email protected] Programs: https://startupnv.org https://angelnv.com https://fundnv.com https://1864.fund C7 20 AB75/2023 Legislative Session