EVALUATION REPORT: 2011 SILICON VALLEY TRADE MISSION RESULTS

1. Technical details of the assessment

General Objectives: Relieve period: Coverage: Tipe of study: Sample size: Profile of respondent: Survey the activities and level of satisfaction in Trade Mission to Silicon Valley in 2011 March 2011 Participating companies at the Trade Mission Face surveys with closed and open questions Thirteen companies CEOs

1.1. Executive summary

The following report was based on the data processed of 13 quantitative and qualitative survey results. The questions asked by the Foreing Trade Bureau of Buenos Aires City Government with the objective to relieve the bus ness projection of the First Trade Mission to Silicon Valley, held from 28th of February to 4th of March of 2011. The companies profile are heterogeneous, therefore the distribution of businesses and contacts are partially equal. The evolution of negotiation with each contact will be analyzed during the entire year through the Monitoring Program that this Office has implemented on this year. The Trade Mission was framed from the exploratory field to approach the Buenos Aires ICT sector to this knowledge, innovation and investment U.S Ecosystem. The profile of Argentine companies was distributed as follows: 69% of the participants develop software and provide computer services; 23% of them are dedicated to videogame production; and the other 7% produce multimedia content and advertising.

CATEGORY Multimedia content & advertising Software development & computer services Videogame production Total

PERCENTAGE 7.7% 69.2% 23.1% 100%

COMPANY CATEGORY 7.7% 23.1%

Videogame production Multimedia content & advertising Software development & computer services

69.2%

2. Study results 2.1. The average and the percentage of contacts The Trade Mission generated a total of 382 contacts wich were distributed with all Argentinians companies. Big corporations received the largest volume of percentage record (12.8%). The others percentages were: SMEs technology companies (11%), Incubators (10.4%), Consultants (10.2%), and Final Consumers (10.2%). Significantly, the contacts related to the category of investment (angel investors and venture capitals) represented the 18.2% and 70 meetings were held with such entities.

DISTRIBUTION OF CONTACTS BY CATEGORY (IN THOUSANDS US$) 12.8% 11.0% 10.2% 9.1% 9.1% 10.2% 10.4% 6.8% 3.4% 1.8% 3.6%

8.1%

2.6%

or s ul ta nt Pu s Fi bl na ish Te lC er ch s on no su lo m gi er ca s lp ar Pu tn er bl In s ic cu & ba Pr to iva rs te En tit ie s NG O s La w fir m s O th er s Co ns

Co S rp co ME or m st at e pa ec ni hn s es o lo gy

VC ge l

An

In ve

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About the average of contacts that were obtained by Argentinian companies, noteworthy that the distribution was 29 contacts, with a minimum of 5 and maximum of 74.

CONTACTS Average Median Minimum Maximum

N 29.38 30.0 5 74

2.2.Businesses during the Mission

The First Trade Mission to Silicon Valley focused on the promotion of the enterprises from Buenos Aires through networking, negotiation and international investment spaces. Over 15% of the companies have succeeded in sales operations. The average amount of each individual operation was 10,000 U.S. dollars.

BUSINESSES DURING THE MISSION 15.4%

Closed Not

84.6%

2.3. Reasons why there were no commercial operations (in the short term)
The 82.4% of the companies that didnt close business believes that the reason is: (a) the meetings were for display and promotions (41.2%); (b) they perceived business possibilites, but they need another instance of negotiation (41.2%). The 11.8% felt that the counterparts were not suitable. As a consequence, there were not commercial advances because products and services didnt match. The remaining 5.9% exposed the fact of being in the product development process and not being based in San Francisco.

REASONS The products or services were not right for potential partners Counterparts were not right The meetings were only for display and promotion There is commercial potential but have to wait another instance Others Total

PERCENTAGE 5.9% 5.9% 41.2% 41.2% 5.9% 100%

REASONS WHY THERE WERE NO COMMERCIAL OPERATIONS 5.9% 5.9% 41.2% There is commercial potential but have to wait another instance Others The products or services were not right for potential partners Counterparts were not right 41.2% The meetings were only for display and romotion

5.9%

2.4. Trade barriers in the future

The 26.7% of companies believe that one of the variables that may hinder the realization of sales in this target market is the lack of confidence in investing on projects located in Argentina. Furthermore, the 6.7% of the respondents considered that more market information was needed to plan alternative strategies for its internationalization. Regarding the production process, the 6.7% responded that one of the related causes which may hinder the progress of business with the prospects contacted is the lack of structure to generate a greater production scale. Moreover, the other 60% of the respondents estimate that wouldnt have problems in closing deals because they are in the process of advocacy and negotiation. One of the respondents considered the fact of not being based in San Francisco as the main obstacle to progress in business with the contacts that this company generated in Silicon Valley.
BARRIERS Distrust of investing in Argentina Low-scale production Lack of information Others Total PERCENTAGE 26.7% 6.7% 6.7% 60% 100%

TRADE BARRIERS IN THE FUTURE

26.7% 60% Others Distrust of investing in Argentina 6.7% 6.7% Low-scale production Lack of information

2.5. Sales Projections (medium / long term)

Based on an analysis of projected sales, the 30.8% of the respondents predicted that with this first trip to Silicon Valley would generate sales of over US$ 1,000,000 and the 42.6% estimate that they would may conduct business over US$ 500,000. One of the highlights issues of this report is that 10 of 13 CEOs from Argentinian companies believe that will do business in medium term with the contacts from the Silicon Valley Trade Mission.

Projection (thousands US$) No 50 to 100 100 to 500 500 to 1,000 1,000 to 5,000 More than 10,000 Total

PERCENTAGE 23.1% 15.4% 15.4% 15.4% 23.1% 7.7% 100%

SALES PROJECTIONS (MEDIUM / LONG TERM)

More than 10,000 1,000 to 5,000 500 to 1,000 100 to 500 50 to 100 No 0% 5% 10% 15% 20% 25%

2.6. Interest in setting up in Silicon Valley after the Trade Mission

PERCENTAGE Yes No Total 84.6% 15.4% 100%

INTEREST IN SETTLING IN SILICON VALLEY

15.4%

No Yes

84.6%

From the trip organized by Foreign Trade Bureau under the Ministry of Economic Development of Buenos Aires City Government (Undersecretary of investment), it is concluded that the 84.6% of the companies are interested on stablishing into the Silicon Valley area to develop technology projects. This will generate further IT local industry, and will foster with high added value among the greatest players in the international field. From the institutional point of view, we considered the first step in building bridges of relationship between Silicon Valley and the City of Buenos Aires for future projects of investment, innovation and production Francisco Cabrera Minister of Economic Development of Buenos Aires city Government