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Gridley’s mobile-ny-industy-roadmap-tips-for-successful-fundraise

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  • 1. Gridley’sMobile New YorkIndustry Roadmap Tips for a Successful Mobile Fundraise March 2012
  • 2. Globally, Mobile Penetration is Significantly Higherthan Penetration of Landline Phones or the Internet Mobile Cellular Subscriptions Penetration Rates Mobile phone penetration increased in the Americas from 52% in 2005 to 103% in 2011… 160% 140% 143% 120% 120% 103% 100% 92% 97% 80% 74% 60% 60% 52% 53% 40% 27% 20% 23% 12% 0% 2005 2006 2007 2008 2009 2010 2011 Africa Arab States Asia & Pacific CIS Europe The Americas Fixed Telephone Lines Penetration Rates Internet User Penetration Rates …while landline phone penetration decreased 3%.. . .. and Internet penetration increased to 56% or ~half mobile 50% 80% 46% 74% 45% 70% 40% 39% 60% 35% 56% 33% 50% 30% 29% 46% 48% 25% 26% 40% 23% 36% 20% 30% 29% 15% 15% 27% 13% 20% 10% 10% 9% 10% 9% 13% 10% 8% 5% 2% 1% 2% 0% 0% 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011 Africa Arab States Asia & Pacific Africa Arab States Asia & Pacific CIS Europe The Americas CIS Europe The AmericasSource: International Telecommunication Union, 2011 2
  • 3. Conversion from Feature Phones to Smartphones HasBeen Accelerating Over the Past Few Quarters……This trend is likely to continue as hardware costs continue to fall. By 2015, over 80% of USmobile users are expected to have smartphones, up from 48% at the end of 2011 US Smartphone Penetration(1) % of US Users with Smartphones(2) 77% 81% Feature Phone Smartphone 71% 90% 64% 87% 86% 84% 83% 48% 81% 79% 77% 75% 72% Almost 50/50 62% 57% 2011 2012 2013 2014 2015 52% 48% % of US Users with Tablets (3) wth 43% r Gro 25% ti ng Use 38% 25% lera Acce 5% 20% 28% 25% 15% 21% 23% 19% 16% 17% 8% 13% 14% 10% 1-3% 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 2011 2012 2013 2014 2015Note: Dashed lines indicate extrapolated data.(1) Source: The Nielsen Company.(2) Source: Goldman Sachs (June 2011).(3) Source: Forrester Research (2010). 3
  • 4. Mobile Ecosystem Marketing Services / Advertising / Analytics Content / Social M-Commerce Payments / In-Store Marketing Services Content e-Commerce Mobilizers Integrated Systems Payments Video Gaming M-Commerce Tech Mobile Ad Networks Bar Code Scanners Mobile Discovery Mobile Coupons Social DSPs Exchanges Analytics Digital Inventory Rewards / CLOs 4
  • 5. The More Developed Japanese Market Gives a Hintof What To Expect in the US in the Next Few YearsIn the future, US consumers will probably spend more time viewing videos and TV, searching,and accessing financial news and traffic reports using their mobile devices Mobile Activities in the U.S., EU5, and Japan by % Share of Total Mobile Users 32% Poised for Growth 26% 25% 25% 23% 23% Poised for 21% Growth 20% 18% 18% 17% 17% 16% 17% 16% 16% 16% 15% 14% 14% 13% 13% 12% 10% 10% 10% 8% 8% 9% 7% 7% 7% 7% 5% 6% 6% 5% 4% 5% 4% 4% 3% Games Search Capture Maps Instant Sports Info Music Financial Restaurant Traffic Classifieds Online Retail TV / Video Travel Video Messaging News / Stock Info Reports Service Quotes U.S. EU5 JapanSource: comScore MobiLens, 3 month average ending December 2010, Japan data for December 2010 only 5
  • 6. Mobile Ads Are More Targeted, Making them MoreEffective and Compelling Than Other Media Relative Efficacy of Mobile vs. Other Advertising Media (1) Reach Targeting Engagement Viral Transaction Mobile 100 90 70 80 80 Internet 50 50 80 40 60 1 TV 50 30 90 0 20 1 1 1 Print 40 0 20 0 0 1 1 Radio 60 0 40 0 US Mobile Ad Spending ($MM)(2) Breakdown of US Mobile Ad Spending ($MM)(2) 9 0 % $5,000 79% $4,396 8 0 % $4,500 65% $396 7 0 % $4,000 $3,381 $3,500 6 0 % 47% $3,000 $1,767 $2,523 5 0 % $2,500 4 0 % $1,802 $2,000 40% 3 0 % $1,226 34% $1,500 $1,600 30% 2 0 % $743 $1,000 $500 1 0 % $633 0 % $0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Messaging Display Search VideoSources: (1) Chetan Sharma (January 2011), (2) eMarketer (September 2011) 6
  • 7. Mobile Phones Are Creating New In-StorePurchasing Behavior and Transforming Payments Reasons for In-Store Purchase Abandonment Among US Smartphone Users 52% 51% 34% 21% 17% 7% 1% Found it online for a Found it at another Saw a negative review Bought a similar item It was not available in- No longer needed item Nove of the above better price store for a better price about the item instead storeSource: comScore, US Smartphone User Survey (July 2011). Consider Mobile Payments Mainstream % of Age Group Interested in Mobile Transactions 9% consider mobile payments mainstream 24% 24% globally today 21% 18% 12% 10% 9% 3% 1% 83% believe mobile payments will be 13-15 16-17 18-19 20-24 25-34 35-44 45-54 55-64 65+ mainstream globally within the next four yearsSource: KPMG. Source: Yankee Group. 7
  • 8. II. Digital New York
  • 9. Over 300 NY Digital Start-Ups Founded in the LastFew Years… Digital Start-Ups Founded in NY 80 71 62 60 53 2007 2008 2009 2010 2011Sources: CapIQ and Gridley estimates 9
  • 10. NY’s Emergence as a Tech HubNew York City has become a true digital media innovation center Q3 2011 Internet VC Funding by Top Cities Q3 2011 Internet VC Deals by Top CitiesTotal of Top Cities = $2,165 billion Total of Top Cities = 153Total including Others = $2,989 billion Total including Others = 308 Seattle 3% Seattle, 9 Chicago Foster City 4% 3% Foster City, 2 Chicago, 7 M cLean 6% M cLean, 1 San Francisco, 44 San Francisco 34% Bay Area Bay Area New York $1,277 bn 77 27% New York, 59 Palo Alto, 11 Palo Alto San M ateo Los Angeles, 8 4% 4% Redwood City Los Angeles San M ateo, 8 Redwood City, 4 4% 11%Source: CB Insights “Venture Capital Activity Report” 10
  • 11. NY Ecosystem has Very Different Roots and GrowthOpportunities than Silicon Valley Internet Services Wall Street Leadership Talent Operational Engineering Data Services Efficiencies Talent Advertising Key Creative Customers Talent Strategic Strategic Acquirers Partnerships Fashion Business Media Development 11
  • 12. Top 25 Private Digital NY Sale Transactions January 2007 – December 2011 (Disclosed deals / rumored pricing available)(Enterprise Value in $M) $1,000 $800 $400 $200 $0 2007 2008 2009 2010 2011 Source: Capital IQ, TechCrunch, public filings, and press releases 12
  • 13. NY Area Private Mobile Companies (32) Content 9 eCommerce 4 Marketing 15 Social 4 13
  • 14. Top 10 Private Digital NY Sale TransactionsJanuary 2008 – December 2011 (Disclosed deals / rumored pricing available) Transaction Date Acquirer/Target Value (in $M) 1) 06/15/2011 $524 2) 06/13/2011 400* 3) 02/06/2011 315 4) 01/19/2011 296 5) 02/03/2010 225 6) 01/25/2010 200* 7) 09/08/2011 151 8) 06/17/2010 135 9) 08/05/2008 125 10) 09/07/2010 120Source: Capital IQ, TechCrunch, public filings, and press releases. *rumored value 14
  • 15. “The Locals” - Digital Focused VC/PE FirmsHeadquartered in NY Area (61) Seed 23 Early Stage 27 Growth Equity 20 Buyout 7 (<$2M) ($1M-$10M) ($10M-$50M)Note: Firms may be active in more than one category. Source: Capital IQ, TechCrunch, public filings, and press releases 15
  • 16. “The Locals” - Digital Focused VC/PE FirmsHeadquartered in NY AreaBy Number of NY Area Digital Investments January 2008 – December 2011 1-3 1-3 21 4-10 4-10 19 >10 >10 7 Seed Early Stage Growth BuyoutSource: Capital IQ, TechCrunch, public filings, and press releases 16
  • 17. “The Satellites” - Digital Focused VC/PE FirmsWith a NY Office (24) Seed 9 Early Stage 10 Growth Equity 11 Buyout 5 (<$2M) ($1M-$10M) ($10M-$50M)Note: Firms may be active in more than one category. Source: Capital IQ, TechCrunch, public filings, and press releases 17
  • 18. “The Satellites” - Digital Focused VC/PE Firms With a NY Area Office By Number of NY Area Digital Investments January 2008 – December 2011 1-3 6 4-10 7 >10 2 SeedEarly Stage Growth Source: Capital IQ, TechCrunch, public filings, and press releases 18
  • 19. “The Outsiders” - Digital Focused Non-NY VC/PEFirms (44) Seed 8 Early Stage 30 Growth Equity 27 (<$2M) ($1M-$10M) ($10M-$50M)Note: Firms may be active in more than one category. Source: Capital IQ, TechCrunch, public filings, and press releases 19
  • 20. “The All-Stars” - VC/PE Firms with at Least 5 NY Area Digital Investments January 2008 – December 2011 “The Locals” 20 “The Satellites” 7 “The Outsiders” 11 SeedEarly Stage Growth Source: Capital IQ, TechCrunch, public filings, and press releases 20
  • 21. Advice for the Entrepreneur• Digital NY is getting crowded with lots of startups. Be sure of your objectives and how to achieve them.• There is a quality group of NY-based technology focused lawyers, accountants and recruiters – network into them.• Not everyone will be able to sell for $100MM+ valuations. Be realistic about where you stand on your chances.• The scope of what is "strategic" to a buyer is constantly expanding. Make sure to keep as many lines of communication open to large organizations.• There are LOTS of outside capital. Think through what is the right amount for you.• Choosing a VC is as important as choosing a co-founder. It could be a 5+ year relationship, so get as much outside perspective on them as possible. − Focus on the partner involved, not the firm overall. 21
  • 22. III. Gridley Overview
  • 23. Gridley OverviewGridley & Company, a New York-based boutique investment bank, provides advisoryservices to companies in the Information Services industry Gridley & Company Leading Boutique • Sharp focus provides clients with valuable strategic insights and perspectives • Specialize in Internet Services, Digital Media & Marketing Services, Data Services, Financial Technology, and SaaS & Outsourcing Services • Founded in 2001 • Headquartered in New York, NY Strong Reputation • Strong industry reputation on assignments led by senior bankers • Experienced, bulge-bracket trained M&A bankers – The “A” Team Trusted Advisor • Thoughtful ideas – not just logical combinations • Deliver value to buyers, sellers, and investors alike • Broad industry network developed over 25+ years with industry leaders, emerging growth companies, and senior investors 23
  • 24. Gridley’s Differentiated Strategic ApproachOur broad network allows us to discern important trends early in their development, adviseclients on the best strategies to profit from those trends, and execute successful transactions INDEPENDENT ADVICE INDEPENDENT ADVICE Well-Known Thought Leadership Strong Network of Relationships• Often hired by public company leaders to • Split time 1/3, 1/3, 1/3 between strategics, advise them on major growth initiatives VC/PE firms, and private company CEOs• Approximately 25% of business is • Built our business by visiting over 400 retained, strategic buy-side work for companies a year annually for 10 years industry leaders and selected PE investors • Have set up over 1,000 one-on-one “meet• Use industry overviews to effectively guide and greet” meetings at our annual January strategic buyers and PE investors conference INTEGRITY Ability to Strategically Position Companies INTEGRITY Impressive Track Record• Spend more time than our competitors on • Over 25 year history of successfully the strategic positioning of our clients completing transactions• Work together to optimize market • Clients like us and the job we do positioning • Goal is 100% referencable clients• Offer strategic insights based on our • “No client gets left behind” understanding and perspective of the industry 24
  • 25. Strategic Thought Leadership is Well Known Quarterly Newsletter: Industry Frequent Gridley Hosted The Compass Guides Industry Speaker Events • Business Insider: • Digital NY IGNITION • January Conference • OMMA Display • Mobile in May • Capital RoundTable • Annual Golf Outing • SIIA Midmarket Growth Conference • AdTech Cocktail Party • IAB Marketplace: Mobile • Highly respected quarterly newsletter • OMMA Mobile about industry trends and corporate • Upstream Seller Forum finance/M&A activity • Digital Hollywood NYC: • Received by over 2,200 Media Disruption industry CEOs and • ad:tech NYC 2010 CFOs, investors, and financial sponsors 25
  • 26. Our Team is Experienced, Focused, and Trained forSuccess• Gridley’s bankers are experienced, bulge-bracket trained bankers – The “A” Team• Recent additional hires add execution capability and further outreach Team Member Background Linda Gridley • 25+ years relevant banking experience President & CEO • Prior firm experience at Lehman Brothers, Furman Selz, and ING Barings • In depth knowledge of marketing services sector – Successful sale transactions with KBM, M/A/R/C Group, PRIMIS, Communifx, and Digitaria • Frequent industry conferences circuit speaker Peg Jackson • Extensive knowledge and experience in digital media and technology sectors as venture capitalist Managing Director • Managing Director at NeoCarta Ventures. Served on boards including Data Synapse (Acquired by Tibco), Silverpop, and Zoom Systems • Vice President of Business Development at NBC. Responsible for investments including Tivo, Preview Travel (acquired by Microsoft), Whowhere (acquired by Lycos), Wink (acquired by Liberty) Pratik Patel • 9 years banking experience, 5 years covering software and digital media sectors Director • Prior firm experience at JPMorgan Maura O’Neill • 7 years banking experience, extensively working with media and marketing services companies Vice President • Prior firm experience at Lehman Brothers and CDG Group Michael Lambe • 7 years transaction experience, executing transactions for leading private equity firms Vice President • Prior firm experience at Harris Williams & Co. Feng Hong • 3 years tech banking experience Associate • Prior firm experience at Credit Suisse 26
  • 27. Selected Recent Gridley TransactionsGridley clients include industry leaders and premier emerging growth companies Undisclosed Undisclosed Undisclosed Undisclosed Undisclosed Undisclosed $20,500,000 Undisclosed Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by SAS GfK Channel Intelligence, Inc. Minicom Digital Signage Oversee.net TeleTech Holdings The Dolan Company WPP Group plc Advisor Advisor Advisor Advisor Advisor Advisor Advisor Advisor Undisclosed Undisclosed Undisclosed Undisclosed Undisclosed $20,000,000 $367,000,000 $157,000,000 Acquired Acquired Acquired by Acquired Acquired Investment by Acquired by Acquired FetchBack Inc. M3 Mobile Marketing MDC Partners Inc. Pepperjam SilverlignGroup Inc. TZP Group LLC Roper Industries, Inc. e-Dialog, Inc. Advisor Advisor Advisor Advisor Advisor Placement Agent Advisor Advisor Undisclosed Undisclosed Undisclosed Undisclosed Undisclosed $113,189,337 $17,450,000 Undisclosed Email Business of Ad Serving Business of PrePay Intelligent Network Solutions Business Unit of Sold to Acquired by Acquired by Acquired by Acquired by Sold to Sold to Secondary Offering Verisign Schulman, Ronca, & WPP Group plc Quest Software One to One Interactive, Inc. Aegis plc Parthenon Capital LLC Bucuvalas, Inc. . Advisor Advisor Advisor Advisor Advisor Co-Manager Issued Fairness Opinion Advisor Undisclosed $138,000,000 Undisclosed $58,000,000 Undisclosed $55,200,000 Undisclosed Undisclosed Advisory Communications Marketing One to One, Inc. Systems, Inc. (ACS) d/b/a d/b/a Acquired by Acquired Acquired by Acquired Acquired by Acquired by Acquired by Valassis Follow-On Offering Carlson Marketing GroupISIS Equity Partners, Inc. Modem Media, Inc. Performics, Inc. ARAG Group Alliance Data Systems, Inc. Communications, Inc. Advisor Advisor Advisor Advisor Advisor Co-Manager Advisor Advisor 27
  • 28. Gridley & Company LLC10 East 53rd Street, 24th Floor New York, NY 10022 212.400.9720 tel 212.400.9717 fax Twitter: @gridleyco www.gridleyco.com