Cenon M.

Oriel Strategic Management External Factor Evaluation (EFE) Matrix for Narra Venture Capital

July 25, 2011 Prof. Francisco M. Roa

Key External Factors Opportunities 1. Abundance of new business ideas that needs financing.

Weight

Rating

Weighted Score

0.10 2. Availability of several financially distressed companies which could provide cheaper acquisition. 3. Technological advancement makes company data readily available for due dilegence and benchmarking. 4. Increased globalization specially in offshore and outsourcing activities in the US, provides investment opportunities for Philippine companies. 5. Investment and trade opportunities from free trade agreement between ASEAN and other Asian countries are increasing. 6. Sustained economic growth in the Asian region will provide growth potential to most of the Philippine companies. 0.10 0.05

4 4 3

0.40 0.40 0.15

0.05

0.05

0.02

0.02

0.05 Threats 1. Shrinking exit markets, with the decline in IPO preventing venture investors from earning the same return as they have historically. 2. Philippine businesses do not provide the financial transparency that venture capital desire in order to conduct the required due diligence needed before investing. 3. Poor investment climate in the Philippines. 4. Capital flight caused by currency and country risks (political instability) 5. Core investment focus (IT and Semicon companies) are matured and delivers sub-standard returns. 6. Complexity in determining the investment return which could give rise to overvaluation of portfolio. 7. Economic reform is slow. 8. There is a perception of widespread corruption and security issues.

0.20

0.20

0.80

0.03 0.10 0.02 0.10 0.10 0.03 0.05

4 2 1 4 1 1 1

0.12 0.20 0.02 0.40 0.10 0.03 0.05

Total

1.00

2.94

Cenon M. Oriel Strategic Management Internal Factor Evaluation (IFE) Matrix for Narra Venture Capital

July 25, 2011 Prof. Francisco M. Roa

Key Internal Factors Strenghts 1. Management team has strong background in venture capital operation 2. Financial strenght contributed by limited patners/investors of the fund (Ayala, Lopez Group, Lhuillier Group and Tallwood Group of Dado Banatao) 3. Management team has strong knowledge in the semicon and IT business which comprises most of portfolio investment of the company. 4. Partners and Investors of the venture capital funds are willing to invest more money. Weaknesses 1. Venture capital in not a popular option for business financing in the Philippines. 2. The life for the venture capital fund is sometimes shorter than the life of the investments. 3. Funds are limited, giving rise to difficulty in allocation among portfolio. 4. Poor fund performance in the last three years.

Weight

Rating

Weighted Score

0.15

0.45

0.20

0.80

0.15 0.20

3 4

0.45 0.80

0.05 0.10 0.05 0.10

2 3 2 3

0.10 0.30 0.10 0.30

Total

1.00

3.30