Venture Capital 2016 Data &
Views from VCs and LPs 1 VC Survey Data

With more money (and new
non VC entrants) venture financings have obviously increased. 2015 was an enormous year (2x pre recession) 2 US VC financing activity 0 2,500 5,000 7,500 10,000 $0 $25 $50 $75 $100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Capital invested ($B) # of rounds closed 8,097 9,381 8,563 7,572 6,428 5,193 4,3164,533 4,119 3,145 2,574 $77 $68 $44 $40$42 $30 $26 $36$35 $28 $23 2,574 3,145 4,119 4,533 4,316 5,193 6,428 7,572 8,563 9,381 8,097 Source: PitchBook 2015 Annual U.S. Venture Industry Report; Upfront analysis.

Angel & Seed deals have
grown fastest but dollars have scaled massively into a smaller number of later-stage deals (doubling in just 2 years) 3 Source: PitchBook 2015 Annual U.S. Venture Industry Report; Upfront analysis. US VC # of rounds closed by stage US VC capital invested ($B) by stage 0 10 20 30 40 50 2010 2011 2012 2013 2014 2015 0 1,000 2,000 3,000 4,000 5,000 2010 2011 2012 2013 2014 2015 Early Stage CAGR 21% 36% 16% CAGR 1% 22% 3% Angel/ Seed Late Stage Early Stage Late Stage Angel/ Seed

And the dollars into late-stage
deals has largely been driven by non- traditional VCs entering the market (up 50% in the last 3 years) 4 Source: CBInsights, VC-backed $20M+ rounds; non-VC defined as Asset Mgmt, Corporate/Corporate VC, Family Office, Hedge & Mutual Funds; Upfront analysis. Non-VC participation in US $20 million-plus rounds 0% 15% 30% 45% 60% 2012 2013 2014 2015 55% 47%47% 37% CAGR ’12-’15 15%

M&A pace hasn’t matched the
increases in funding pace so VC mark-ups have been good but cash distributions less so 5 US VC-backed M&A activity 300 375 450 525 600 $0 $38 $75 $113 $150 2011 2012 2013 2014 2015 Amount Paid ($B) Number of M&As 473 510 470 462 542 $54 $81 $42$43$47 542 462 470 510 473 Source: Dow Jones VentureSource Venture Capital Report 4Q’15; Upfront analysis.

IPO exits are down 32%
in volume and 38% in value 6 US VC-backed IPO activity 0 30 60 90 120 $0 $4 $8 $11 $15 2011 2012 2013 2014 2015 Raised ($B) through IPO Number of IPOs 66 107 73 50 46 $6 $9 $8 $11 $5 46 50 73 107 66 Source: Dow Jones VentureSource Venture Capital Report 4Q’15; Upfront analysis. 50

With fewer VC exits many
partners are more overloaded with boards and financings. 77% of surveyed VCs sit on or observe 4+ boards 7 2%3% 23% 39% 24% 9% Source: Upfront Survey Jan 2016, 158 VCs. How many boards do you sit on or observe? 11 - 14 0 7 - 10 4 - 6 1 - 3 15+

About 2/3rd of respondents and
their partners write 1-4 first checks each year 8 How many first check investments do you and a typical partner at your firm make each year? 0% 25% 50% 75% 100% Respondent Typical partner at respondent's firm 6%6% 32%27% 34% 28% 24% 25% 5% 13% 10+ 5-10 3-4 2 1 Source: Upfront Survey Jan 2016, 159 VCs for Respondent and 158 VCs for Typical partner at respondent’s firm.

88% of Surveyed VCs are
conservative on valuations 9 6% 42% 41% 11%1% Source: Upfront Survey Jan 2016, 156 VCs. How would you describe your outlook on valuations right now? Not much should change in 2016 over 2015 I expect valuations to continue to rise and you have to pay if you want to be in the best deals My best years are years where valuations are soft. If I get a great deal, I’m in. Otherwise I’ll wait until later in the year. Prices can only continue to drop I’ve already reset valuations expectations in my mind. If I don’t get what I consider a fair valuation I’ll just move on. There are plenty of deals out there and I’m not in a rush I find myself getting a little bit more conservative on valuations and am even willing to miss a deal if I feel it’s overpriced

Specifically more than 90% of
respondents expected valuations to go down in 2016 with a full 1/3rd of investors expecting significant price corrections 10 Do you expect valuations to go up, down or remain about the same as previous quarters? 0% 25% 50% 75% 100% Q4'15 1H'16 Proj 30% 5% 61% 61% 8% 28% 6% Increase About the same Marginally down Significantly down Source: Upfront Survey Jan 2016, 156 VCs for Q4’15, 158 VCs for 1H’16.

There is a clear feeling
that fund raising cycles are taking longer and 77% of respondents felt this pace is likely to slow down even further in 2016 11 Do you expect deals to take longer in the process than previous funding quarters, the same or shorter? 0% 25% 50% 75% 100% Q4'15 1H'16 Proj 77%45% 22% 51% 1%4% Shorter than normal About the same as normal Getting longer Source: Upfront Survey Jan 2016, 159 VCs for Q4’15 and 158 VCs for 1H’16.

This has swung sentiment for
many experienced VCs, with 62% of respondents advising companies to cut costs / burn as markets tighten 12 4% 35% 62% Source: Upfront Survey Jan 2016, 156 VCs. Which statement best describes the spending behavior at most of the companies in which you are on the board or observe? Generally cutting costs expecting markets to tighten Don’t see much change from a year ago Generally not too worried about burn rates

65% of respondents think their
firms will make about the same first check investments in 2016 as they had in 2015 13 23% 65% 11% Source: Upfront Survey Jan 2016, 159 VCs. Do you think your firm will make more new first check investments or fewer in 2016 vs. 2015? More New Investments Fewer New Investments About the Same Pace

50% of respondents indicate they
may slow down their pace, 35% thought it would be the same pace as 2015 and only 16% expect 2016 to be robust 14 1%4% 43% 35% 16% Source: Upfront Survey Jan 2016, 158 VCs. How would you generally describe your investment mindset heading into 2016? “Seeing tons of great deal flow and expect this to be a solid year” “Unless a deal is amazing I’m likely to slow my pace a bit” “I don’t feel compelled to do deals” “2016 about the same pace as my last several years” “I’d rather fund when the dust settles

With the sentiment of the
markets it’s no surprise that a full 82% of VCs expressed caution or concern going into 2016 15 2% 30% 50% 9% 9% Source: Upfront Survey Jan 2016, 155 VCs. Hugely bullish I’m very concerned Things are bad & getting worse Generally cautious Generally optimistic Which of the following statements best describes your mood heading into 2016

159 VCs surveyed 16 Fund
type 0 20 40 60 Angel Seed VC (Early) VC (Mid) VC (Late) PE Corp (blank) 11 96 19 47 60 7 Source: Upfront Survey Jan 2016. Fund size ($ million) 0 20 40 60 $1-20 $20-100 $300-999 $100-300 $1000+ Evergreen Personal 779 2833 47 19 Survey respondent geography 0 40 80 Norcal SoCal NE US Other US ROW (blank) 178 24 31 79 Position 0 47 93 140 Partner / MD Analyst to Principal Sole proprietor/personal investor 79 134 How long has your firm existed (years) 0 35 70 0-3 3-10 10-20 20+ 22 36 61 31 Personal investment experience (years) 0 40 80 0-3 3-6 6-10 10-15 15+ 41 23 43 30 13