The portfolio manager commentary provides an overview of the 3rd quarter 2016 performance of the Small Cap Focused Growth strategy. Key points include: - The strategy had strong absolute and relative performance in Q3, outperforming the Russell 2000 Growth index, driven by strong stock selection. - Top performing sectors were Technology, Consumer Discretionary, and Producer Durables. Laggards were Healthcare and Energy due to lack of exposure. - Looking ahead, the manager remains optimistic about the portfolio companies' ability to sustain high growth, despite ongoing economic and political uncertainties.

1. 1
Small Cap Focused Growth
Portfolio Manager Commentary
3rd Quarter 2016
U.S. markets had a strong 3rd quarter as stocks continued their recovery from the depths reached in February this
year. At that time, consensus opinion on Wall Street was that the U.S. had entered into a recession. As it turns
out, the consensus was wrong, which is not unusual. More on this later in the commentary. For now, suffice to
say that while recessionary concerns have abated, economic and geo-political clouds persist. In this uncertain and
low-growth environment, the potential for capital appreciation inherent in U.S. secular growth stocks, such as
those we own in the Granahan Focused Growth portfolio, holds appeal.
Q3 Review: Good Performance Absolute and Relative
The 3rd quarter saw solid and broad-based gains for the Focused Growth strategy. Positive attribution was driven
by strong stock selection across all sectors represented in the portfolio, and assisted by the portfolio's overweight
in Technology, a sector that performed well for the Index. Our Technology holdings led performance, followed
by Consumer Discretionary, Producer Durables, Financials and Consumer Staples.
----------Annualized------------
3Q2016 YTD 1-Year 3-Year 5-Year Since Inception
Small Cap Focused Growth
– Net of Fees
16.7% 21.2% 23.5% 6.4% 22.6% 13.2%
Russell 2000 Growth 9.2% 7.5% 12.1% 6.6% 16.2% 7.7%
For our leading sectors, what worked well in the portfolio along with what dragged on performance, is detailed
below.
Technology (+ 4.60% relative performance)
Leading Positive Impact to Performance:
o Wix (WIX) - Leading cloud-based web development platform with a proven freemium model; The
company has 86 million registered users and 2.1 million paid subscribers worldwide. Investors are taking
notice that the key revenue drivers – users, conversion, average revenue per user – are strong and
accelerating despite the law of large numbers. Wix has substantial operating leverage and free cash
generation capability. We continue to hold a significant position in the stock, as we believe the risk/reward
remains attractive.
o Impinj (PI) - Provider of RFID semiconductor solutions for a variety of end market uses, including retail,
medical supplies, luggage and restaurants. Following Impinj's IPO in July, the company's stock rose steadily
throughout Q3. We continue to hold a position in Impinj.
o LivePerson (LPSN) - Leading chat vendor transitioning to a real-time secure customer messaging and
engagement platform. Despite guiding down second half revenue and EBITDA, investors bid up LPSN
shares, as the company appears in sight of completing the long transition to its new Live Engage platform.
As the stock appreciated, we trimmed based on risk/reward, but continue to hold a substantial position.

2. 2
Negative Impact:
o Ultimate Software (ULTI): Leading payroll and workforce management SaaS provider. Following a sharp
rise from February to July, Ultimate Software’s shares declined 3% in the quarter costing 80 basis points
of relative performance. We maintain a substantial position. We believe the company has good prospects
to sustain 20%+ revenue growth, potential to further expand profit margins, and that the stock's
risk/reward is attractive.
o Rubicon Project (RUBI): Offers an automated marketplace for large scale buying and selling of advertising.
RUBI shares fell in the wake of reporting disappointing Q2 results and second half outlook. We believe the
company's issues are not trivial and have eliminated the position.
Consumer Discretionary (+2.47% relative performance):
Leading Positive Impact to Performance:
o 2U Inc. (TWOU) – Provides a platform that enables traditional universities to offer online graduate degree
programs. TWOU shares fell hard in Q1 in the midst of recessionary fears. The stock has recovered and is
now up year-to-date, and the company's growth and outlook remain robust with revenues up 38% year-
to-date. We continue to believe 2U's future is bright and that the stock's risk/reward remains attractive.
o Instructure, Inc. (INST) – Provider of SaaS Learning Management System (LMS) software for the education
and corporate markets, branded Canvas and Bridge, respectively. INST shares rose on the heels of strong
second quarter results. We continue to hold a good-sized position in INST shares.
Negative Impact:
o IMAX Corporation (IMAX) – 3D theater systems. IMAX has been a poor performer over the past 12 months
due primarily to disappointing box office results in the U.S. and China. In Q3 the shares fell slightly. We
believe the stock's risk/reward is quite favorable, and over the last few months have substantially
increased our position. More on IMAX below.
Producer Durables (+0.45% relative performance):
Leading Positive Impact to Performance:
o Advisory Board (ABCO) – Provides best practices research and IT tools for the healthcare and higher
education industries. ABCO shares have been volatile in 2016 as growth has slowed in the company's core
healthcare business. In Q3, the stock rose as the company reported inline results in its healthcare segment
and slightly better-than-expected results in higher education. We believe the company is taking steps that
should reaccelerate growth in 2017 and 2018; we maintain a mid-sized position in the stock. That said, we
will trim or add based on risk/reward changes due to changes in the stock price, changes in fundamentals,
and/or investor expectations.
Negative Impact:
o CoStar Group (CSGP) – Provides comprehensive commercial real estate information software and services
and operates the Apartments.com website. After rising sharply in Q2, CSGP shares essentially treaded
water in Q3, underperforming the Index. We continue to believe the prospects for both the company and
the stock are bright, and we own a significant position.

3. 3
Sector Headwinds:
The portfolio's lack of exposure to Healthcare and Energy were modest negatives in the quarter, as along with
Technology, these were the benchmark's strongest sectors during the quarter.
Healthcare (-0.91% relative performance): Healthcare was a strong contributor for the Russell 2000 Growth
benchmark in Q3. In particular, the portfolio's lack of exposure to Pharmaceuticals and Biotech (+18.6% for the
Index this quarter) and Medical Equipment and Services (+12.9% for the Index in the quarter) presented a 140
basis point headwind.
Energy (-0.04 relative performance): The Focused Growth portfolio does not typically include energy stocks
given their commodity nature, in contrast with the secular growers in which we invest. Energy was a strong
sector for the benchmark in Q3, rising 18%, though its low weighting in the Index (1%) resulted in only a slight
negative impact on the portfolio’s relative performance.
Macro: Seems Pretty Good, But As Usual, It's an Uncertain World
To our regular readers, we must sound like a tiresome broken record; but nonetheless, we will say it again. We
believe it is difficult to consistently add value by timing the market. Thus, we do not try. The aforementioned
stock market swoon at the beginning of this year is an example of why. Recall that the Russell 2000 Growth was
down almost 20% at its trough, amidst severely negative investor psychology and extreme risk aversion. Many
asset allocators were convinced that the U.S. had entered a recession, and were advocating moves to cash in
response to this consensus view. While most institutional investors are less tactical, consider the cost to a pension
plan, endowment, or an individual’s IRA if one had moved to cash in February of 2016—or worse, February 2009.
Rather than trying to time the ups and downs of an unpredictable market, we seek companies that can sustain
15%+ growth. These companies, while not immune to outside economic factors, are generally well-positioned for
several years of high growth, and achieving such growth is largely within their control.
Take the example of IMAX which, as noted above, was a negative contributor in Q3. IMAX shares have contracted
over the past 12 months in the wake of disappointing box office results in the U.S. and China. Looking ahead, we
believe the odds are good that within the next 6-12 months, investors will again view IMAX shares in a "glass half-
full" light. The company’s strong global franchise remains intact, and it is growing its screen count roughly 13%
per year (think razors). The company has a record backlog of screen installations, providing a solid foundation for
growing its film royalties in the years to come (think highly profitable razor blades). Entering 2017, the company
will have easier earnings comparisons and an IMAX-friendly film slate for the year (ex: films such as Guardians of
the Galaxy Volume 2, King Arthur: Legend of The Sword, and Star Wars Episode 8). Subtracting the value of IMAX's
ownership in IMAX China (HK Symbol 1970) and its $228 million cash position, investors are currently valuing IMAX
at just 5X this year’s depressed EBITDA. We believe the stock's risk/reward is favorable, and have increased our
position over the last few months.
Another example is a recent addition to the portfolio, Amber Road (AMBR). The company provides cloud-based
global trade management software which helps enterprises track and navigate the myriad of challenges involved
with exporting and importing around the globe. We believe the company has excellent prospects to sustain 15%+
revenue growth and expanding profit margins for a number of years. A combination of factors has left the stock
well below its early 2014 IPO price. These factors are reversing and we believe AMBR shares have an attractive
probability-weighted expected return.

4. 4
Looking Forward: The Future Appears Bright
The Granahan Focused Growth strategy recently passed its 9th anniversary. Over this period, there has been no
shortage of macro shocks and gyrations, including the Global Financial Crisis, the aforementioned swoon in early
2016, as well as ever-present shifts in investor sentiment. Throughout this period we have never been pressed to
find strong companies capable of sustaining high growth, and by adhering to our disciplined philosophy and
process have been able to generate good investment returns. This philosophy and process is depicted in the graph
below.
Looking ahead, we are investing in some of the most exciting and open-ended growth companies in the United
States. We couple this company analysis with strict adherence to the stock valuation, portfolio construction, and
risk management elements of the Granahan Focused Growth investment process. Together we believe this
positions the portfolio to generate good investment returns over the next 5-10 years – regardless of who occupies
the White House! I approve this message and, as always, on behalf of the entire team at Granahan Investment
Management, thank you for your confidence in our firm. Please reach out if you have any comments or questions.
Andrew L. Beja, CFA
dbeja@granahan.com
781 890-4412

5. GIM Small Cap Focused Growth Russell 2000 Growth
Product Assets: $203 Million
Minimum Investment : $3 Million
Status: Open
Inception Date: August 1, 2007
Benchmark: Russell 2000 Growth
Capitalization: Typically, $200 Mil - $2 Bil at purchase
Portfolio Manager: Andrew L. Beja, CFA
Typical Number of Holdings: ± 40
• By investing in businesses with sustainable growth,
we reduce the risk of significant capital loss.
• We invest in exceptional businesses – those with
solid balance sheets, high incremental margins and
strong customer value propositions.
• Our expected return methodology is a mechanism
for mispricing and has proven successful over the
course of several investment cycles.
• We believe conviction leads to outperformance,
60%-80% portfolio held in top 15 holdings.
Granahan Investment Management (GIM) believes that
small dynamic companies provide excellent potential for
superior long-term performance. GIM’s Focused Growth
strategy is grounded in the belief that superior long term
returns are best achieved through a select portfolio of
smaller companies poised to grow at 15% or more.
Within this philosophy we seek to own companies with
large open ended opportunities, a favorable competitive
landscape, products or services providing a significant
value proposition to the customer, and that have clean
balance sheets.
This company analysis is combined with a rigorous
valuation discipline centered on a stock's expected
return and risk/reward. The net result is a portfolio of 40-
50 attractively priced stocks of some of the most exciting
and innovative companies in the economy, and a
portfolio that has generated consistent, strong risk-
adjusted returns over time.
Founded in 1985, Granahan Investment Management,
Inc. is a 100% employee-owned firm specializing in
smaller cap equity investments for large institutions and
wealthy individuals. The firm utilizes fundamental,
bottom-up research to uncover and invest in fast
growing companies. The firm manages $3 billion in
institutional assets and the founding principals are part
of an investment team which now totals ten
professionals.
Trailing 5-years through September 30, 2016
Quarterly Returns - Gross of Fees
Annualized Alpha 4.34%
Upside Capture 132.47%
Downside Capture 95.84%
Tracking Error 11.01
Information Ratio 0.64
Beta 1.18
Source: eVestment

6. Characteristic Portfolio
Russell 2000
Growth
Median Market Cap $1,793.5 mil $845.1 mil
Weighted Avg. Market Cap $2,774.4 mil $1,979.6 mil
Active Share 96.87% 0.00%
Est 3-5 Yr EPS Growth 20.2% 14.3%
Forward P/E Ratio 51.4x 22.1x
Dividend Yield 0.10% 0.80%
Price to Book 5.25x 4.00x
Source: FactSet
September 30, 2016Top Ten Holdings
Security Percent of Portfolio
WIX COM 7.6%
SPS COMMERCE 6.9%
2U INC 6.5%
COSTAR CORP 6.4%
AFFILIATED MANAGERS GROUP 6.1%
ULTIMATE SOFTWARE GROUP 5.4%
IMAX CORP 4.7%
LIVEPERSON 4.4%
ZENDESK 4.1%
EBIX 4.0%
Granahan Investment Management claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in
compliance with the GIPS standards. Granahan Investment Management has been independently verified for the periods January 1, 1993 through December 31,
2014. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2)
the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. GIM is an independent, SEC-
registered investment firm that oversees small and mid-cap equity portfolios for large institutions and wealthy individuals. The Small Cap Focused Growth product
utilizes fundamental, bottom-up research and analysis to invest in companies in the small cap sector of the market that exhibit sustainable high earnings growth, with
a focus on the technology services, internet, consumer, and business services sectors. The benchmark for the Small Cap Focused Growth product is the Russell
2000 Growth. The composite, created in December 2011, is calculated by asset-weighting the performance of each account on a monthly basis. The composite
includes returns from the portfolio manager’s prior firm, from inception of August 1, 2007 through December 31, 2011. Accounts are included beginning with the first
full month under management and terminated accounts are included in the composite. Performance calculations, expressed in U.S. dollars, produce a total return
including cash and the reinvestment of dividends and interest. The dispersion is a standard deviation using equal-weighted total returns for accounts in the composite
the entire year. The three-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month
period. Leverage is not utilized. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Returns
are gross of investment management fees, which when included, reduce investment returns. Beginning 10/31/2012, net returns are total returns reduced by actual
investment management fees. Prior to 10/31/12 and for accounts which pay no management fee, the standard management fee applicable is applied to calculate the
net return. The standard fee for accounts managed in the Small Cap Focused Growth style is payable quarterly in arrears and is calculated by applying the ANNUAL
rate of 1.00% times the average value of the assets in the account on the last day of each month in the quarter. Fees are collected quarterly, which produces a
compounding effect on the total rate of return net of management fees. Market value is based on trade date and security pricing is supplied by Telemet. A complete
list and description of all of the firm's composites is available upon request. Past performance is no guarantee of future results.
September 30, 2016
Date Small Cap Focused Growth Composite
9/30/16
Composite
Gross Return
Russell 2000
Growth
Return
Composite
Assets
$ Mil
Composite
# Accts
Composite
3-Yr.
Std. Dev.
Russell 2000
Growth
3-Yr.
Std. Dev.
Composite
Dispersion
Composite
Net Return
Non-Fee
Assets
Firm
Assets
$ Mil
YTD 21.85% 7.48% $203.5 5 19.58 15.63 NA 21.24% 0.5% $3,118.9
2015 -8.86% -1.38% $206.7 5 17.34 14.95 NA -9.38% 0.4% $3,041.7
2014 2.17% 5.60% $211.8 6 15.87 13.82 NA 1.61% 0.4% $3,516.6
2013 65.19% 43.30% $93.0 <5 16.73 17.27 NA 64.49% 1% $4,056.7
2012 24.55% 14.59% $26.5 <5 21.23 20.72 NA 23.36% 2% $3,049.4
2011 13.19% -2.91% $0.4 <5 23.12 24.31 NA 12.07% 100% $2,741.5
2010 30.06% 29.08% $5.4 8 29.56 27.70 0.15 28.81% 7%
2009 53.80% 34.47% $4.2 8 NA 24.85 0.06 52.33% 10%
2008 -46.34% -38.54% $1.9 6 NA 21.26 NA -46.91% 10%
2007* 18.24% 3.27% $.4 <5 NA 14.23 NA 17.76% 100%
NA – Dispersion information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year; Standard
deviation information has fewer than three years’ data. *Partial year performance: August 1, 2007 through December 31, 2007