Foundation Ventures GP B.V. and FV Fund II C.V.

December 8, 2024

Foundation Ventures GP B.V. (the AIFM), a Dutch-based registered alternative investment fund manager within the meaning of article 3(2)(b) of Directive 2011/61/EU of 8 June 2011 on alternative investment fund managers (AIFMD), makes the following disclosures for the purposes of Regulation (EU) 2019/2088 of 27 November 2019 on sustainability‐related disclosures in the financial services sector (SFDR) and Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (the Taxonomy Regulation). As clarified by the European Commission in its Q&As on sustainability-related disclosures published on 14 July 2021, the AIFM must comply with certain SFDR requirements applicable to registered alternative investment fund managers.

The AIFM acts as registered alternative investment fund manager of FV Fund II C.V. (the Fund).

The Fund qualifies under article 6 of the SFDR as it does not promote environmental or social characteristics (article 8 of the SFDR) to be reached pursuant to binding investment criteria embedded in its investment strategy nor does it have sustainable investments as its objective (article 9 of the SFDR).

I. AIFM-related disclosures

Transparency of sustainability risk policies and transparency of the integration of sustainability risks – article 3(1) and article 6 of the SFDR

General overview

A sustainability risk refers to an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.

The AIFM reviews and assesses potential sustainability risks within the meaning of SFDR as part of its decision-making process and ongoing risk monitoring with respect to investments made or to be made by the Fund and has integrated such review into its internal procedures and policies, as further detailed hereafter.

Relevance of sustainability risks

Sustainability risks may affect the Fund’s performance having regard to the types of investments made or to be made in accordance with its investment policy and objectives, meaning that if any such risk occurs, returns on investments may be materially negatively affected as a result. Investors and potential investors should note that it is difficult to assess with reasonable certainty the probability of the occurrence of such risks and the likely impact of such materialized sustainability risks on the value of investments.

The identification and assessment of risks, including sustainability risks, will take place on an ongoing basis if and when investments are made in accordance with the Fund’s investment policy. Such review is performed by the AIFM, as summarized below:

(i) prior to an investment decision being taken on behalf of the Fund, the AIFM identifies the material risks, including sustainability risks, associated with the proposed investment.

(ii) these risks form part of the overall investment proposal to be assessed by the AIFM, including by assessing and identifying ESG-related risks in the deal screening process and the due diligence process. The results of the assessment are part of the investment memo which is submitted to the Investment Committee for consideration. If material risks are identified in the due diligence process, a risk mitigation/action plan has to be developed by the AIFM’s compliance team (if necessary, with external experts) and will be added to the Investment Committee paper;

(i) ultimately and following its assessment, the AIFM makes the relevant investment decision having regard to the Fund's investment policy and objectives and subject to the Investment Committee’s approval; and

(ii) the AIFM encourages portfolio companies to consider ESG and sustainability risk issues and disclose their commitment and processes. In this respect, the AIFM sets clear expectations for portfolio companies to help them address material ESG risks and opportunities. The AIFM regularly asks portfolio companies to report on identified sustainable risks and to report on a quarterly basis any changes to the sustainability risk questionnaire used in the due diligence process.

The identification, assessment and, to the extent possible, mitigation of sustainability risks is embedded into the above process through the implementation of the AIFM’s internal policy as provided for herein.

No consideration of adverse impacts of investment decisions on sustainability factors – article 4(1)(b) of the SFDR

Article 4(1) of the SFDR requires fund managers such as the AIFM to provide a clear statement as to whether or not they consider the "principal adverse impacts" of investment decisions on sustainability factors, e.g. environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

Although ESG and sustainability risks are important to the AIFM, the latter does not consider the adverse impacts of investment decisions on sustainability factors in the manner prescribed by article 4(1) of the SFDR, in particular due to the fact that (i) no reliable and sufficiently available or accessible data is available to perform such impact measurement and provide the mandatory reporting imposed by the regulatory technical standards in a consistent manner; and (ii) the underlying investments are not generally required to report on such factors in the manner prescribed by SFDR.

The AIFM does not intend to consider principal adverse impacts of investment decisions on sustainability factors in the near future.

Transparency of remuneration policies in relation to the integration of sustainability risks – article 5(1) of the SFDR

For the purposes of article 5(1) of the SFDR, the AIFM declares that it has not put in place a remuneration policy in light of the fact that it qualifies as a registered alternative investment fund manager and thus does not fall under such requirement under the AIFMD.

II. Fund-related disclosures

Transparency of other financial products in pre-contractual disclosures and in periodic reports – article 7 of the Taxonomy Regulation

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.