This document provides an overview of emerging technologies from a venture capital perspective. It discusses the state of venture capital investment and highlights opportunities in big data and analytics, cloud computing, mobility, and social media. It also summarizes Sierra Ventures' investment approach, focusing on early stage investments in information technology sectors globally. Sierra Ventures aims to track disruptions across private cloud software, social media presence, predictive analytics, and mobile application development platforms.

1. A Venture Capital PerspectiveGamiel Gran - Partner Sierra Ventures October 6, 2011

2. Venture Capitalist Perspective AgendaState of Venture Capital – Investment climate, IPO’s from a long term perspective

3. Big Data and Analytics – Massive Scale in Real-time – Those who can leverage will win

4. Cloud - The New Data Center – ‘X-as-a-Service’ and at commodity prices

5. Mobility – The New Starting Point – consumerization sets the standard for access, simplicity and adoption

6. Social – The New Internet – the social chain as the new dimension across the globe

7. Sierra Ventures – Our Approach

8. Getting Funded – some insights The Venture Capital ProcessENTREPRENEURS(Starting and Building Companies)VENTURE CAPITALISTS(Finding and Funding Entrepreneurial Companies)INSTITUTIONAL INVESTORS(Limited Partners – e.g. Endowments, Pension Funds)Venture Capital 101 Stanford University Graduate School of BusinessPeter C. Wendell, Managing Director Sierra Ventures Long-term funders of VC firms (10-year contract, funds flow slowly)

9. Need out-sized returns (DJIA+5)

10. Want access to “best” firms; comp issues

11. Can drive cyclicality

12. Equity investors (Not lenders); strike deals

13. Pick winners and add value; wide variety of outcomes

14. Firms often specialize and have multiple funds

15. Long-terms funds, but liquidity focused

16. VC as change agent; Value add

17. Large sorting task; Deal flow

18. Defining and focusing the pursuit of an opportunity

19. Marshalling resources / maintaining control

20. Attempting to create “virtuous cycle of success”Institutional InvestorsINSTITUTIONAL INVESTORS(Limited Partners – e.g. Endowments, Pension Funds)Asset allocation; Return expectations

21. L.P. - G.P. contracts; Compensation

22. Management Fees vs. Carry

23. History; Long view

24. Long-term funders of VC firms (10-year contract, funds flow slowly)

25. Need out-sized returns (DJIA+5)

26. Want access to “best” firms;

27. Can drive cyclicalityVenture CapitalistsVENTURE CAPITALISTS(Finding and Funding Entrepreneurial Companies)VC as change agent; Value add

28. Large sorting task; Deal flow

29. The "pitch" and the "deal" (ownership)

30. Buyers and Sellers; Liquidity

31. Perform or perish; Firm focus

32. Equity investors (Not lenders);

33. Pick winners and add value; wide variety of outcomes

34. Firms often specialize and have multiple funds

35. Long-terms funds, but liquidity focusedEntrepreneursENTREPRENEURS(Starting and Building Companies)Size of outcome – Aligned Incentives

36. Shared vision (evolving)

37. Fit with VC (permanence)

38. Deals, valuation, and terms

39. Defining and focusing the pursuit of an opportunity

40. Marshalling resources / maintaining control

41. Attempting to create “virtuous cycle of success”

42. Outcomes vary widely, thus creating “inefficient market” for VC’s Annual Venture Capital Investments From 1981 - First Half 2011PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters

43. Venture Capital InvestmentsBy industry: Q2 2011Visit www.pwcmoneytree.com for Industry definitionsPricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters 8

44. Venture Capital InvestmentsBy region: Q2 2011PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters Q2 2011 Total Investments - $7,516.1 million in 966 deals9

45. Corporate Acquisitions Successful Exits Create Successful Entrepreneurs Cash of Top Consolidators$300+BSource: Capital IQ

46. IPO Market Recovering from Dry Spell IPO ($ Billions)IPO Market Opened for High Quality Companies

47. High Revenue Bar

48. Longer Time*Source: Thompson Reuters & NVCA

49. Venture Capital Market SummaryMany Positive Signs Not So Good NewsValuations are on the rise

50. “social” phase of the digital revolution (Groupon, Facebook).

51. Is this a bubble in the making?

52. Capital intensive sectors (Life Sciences, Cleantech) challenges

53. due to government policy uncertainties, both at the federal and state levels

54. VC fundraising is down

55. IPO and M & A markets are still weak by historical standards

56. Macro trends – US, Japan, European Recession – Double Dip? Global Fuel China based companies 23% US IPO’s in 2010 vs. 1% in 2009

57. 90% kids under 15 live in emerging markets

58. Global Internet usage 1.8 trillion min/mo

59. Internet Users: China 420m, US 220m

60. Cell Phone Users: China 790m, US 270m

61. China #1 in car sales

62. India population surpass China by 2020

63. China the largest PC Market in 2Q11 Good NewsMoney Flow is Up:

64. $7.5B invested Q2’11

65. 19% above Q1’11

66. 4% above Q2’10

67. IPO’s are trending Up:

68. Some big IPO’s, e.g. Linked In

69. M&A is trending Up:

70. Top 15 public tech firms have $300B cash

71. E.g. Google bought 48 companies for $2B in 2010

72. New and Huge Markets

73. Cloud Computing

74. Social

75. Mobile

76. Big Data Analytics: Extra

77. Advertising to Internet/Mobile just beginning Major IT DisruptorsVenture Capitalist Perspective of Emerging Technologies AgendaState of Venture Capital – Investment climate, IPO’s from a long term perspective

78. Big Data and Analytics – Massive Scale in Real-time – Those who can leverage will win

79. Cloud - The New Data Center – ‘X-as-a-Service’ and at commodity prices

80. Mobility – The New Starting Point – consumerization sets the standard for access, simplicity and adoption

81. Social – The New Internet – the social chain as the new dimension across the globe

82. Sierra Ventures – Our Approach

83. Outlook and QuestionsBig Data is at the Center of a New Wave of Opportunity…Insights still difficult … And Organizations Need Deeper Insights44x202035 zettabytesBusiness leaders frequently make decisions based on information they don’t trust, or don’t have1in3as much Data and ContentOver Coming Decade1in2Business leaders say they don’t have access to the information they need to do their jobsVelocityVarietyof CIOs cited “Business intelligence and analytics” as part of their visionary plansto enhance competitiveness80%83%Volume2009800,000 petabytesOf world’s datais unstructuredof CEOs need to do a better job capturing and understanding information rapidly in order to make swift business decisions60%

84. Big Data – Segments of Opportunity AnalyticalApplicationsSpreadsheets/VisualizationDesign &DeployProcessingPlatform*Now Teradata*Now EMC*Now HPHadoop DistributionsConnectors/IntegrationFile Storage*Now Hitachi

85. Major IT DisruptorsVenture Capitalist Perspective of Emerging Technologies AgendaState of Venture Capital – Investment climate, IPO’s from a long term perspective

86. Big Data and Analytics – Massive Scale in Real-time – Those who can leverage will win

87. Cloud - The New Data Center – ‘X-as-a-Service’ and at commodity prices

88. Mobility – The New Starting Point – consumerization sets the standard for access, simplicity and adoption

89. Social – The New Internet – the social chain as the new dimension across the globe

90. Sierra Ventures – Our Approach

91. Outlook and QuestionsCLOUD COMPUTING Tectonic Market ShiftCloud Computing – Enterprise AdoptionVirtualization Software – Market Size ($B)CLOUD PROVIDERSENTERPRISESMBLargeVirtualizationAmount ($-Billion)Private CloudPublic CloudHybrid CloudSource: IDCPortfolioInvestment Opportunities

92. Major IT DisruptorsVenture Capitalist Perspective of Emerging Technologies AgendaState of Venture Capital – Investment climate, IPO’s from a long term perspective

93. Big Data and Analytics – Massive Scale in Real-time – Those who can leverage will win

94. Cloud - The New Data Center – ‘X-as-a-Service’ and at commodity prices

95. Mobility – The New Starting Point – consumerization sets the standard for access, simplicity and adoption

96. Social – The New Internet – the social chain as the new dimension across the globe

97. Sierra Ventures – Our Approach

98. Outlook and QuestionsMobile: At the tipping point...

99. Mobile: It’s all about the App

100. Wireless – Segments of Opportunity (via PhoneGap)ApplicationsDistribution (App Stores)Security(Aptana Studio IDE)Testing/ Deployment*Now Teradata*Now EMC*Now HPWireless Clouds (in progress)Analytics

101. Mobile: Themes to TrackRapid New App Deployment is Key

102. Major IT DisruptorsVenture Capitalist Perspective of Emerging Technologies AgendaState of Venture Capital – Investment climate, IPO’s from a long term perspective

103. Big Data and Analytics – Massive Scale in Real-time – Those who can leverage will win

104. Cloud - The New Data Center – ‘X-as-a-Service’ and at commodity prices

105. Mobility – The New Starting Point – consumerization sets the standard for access, simplicity and adoption

106. Social – The New Internet – the social chain as the new dimension across the globe

107. Sierra Ventures – Our Approach

108. Outlook and QuestionsSocial: The new platform for access

109. Social: Disrupting Traditional MarketsEnterprise... Must evolve to the Social Enterprise

110. Social: Gamification as the new Engagement Model

111. Social: Disrupting the Internet LandscapeWORLD WIDE SOCIAL NETWORK USERS (Billions)GLOBAL SOCIAL NETWORKS (~100M USERS)100%80%60%40%20%0%GENERAL% of Internet UsersSocial Network Users (B)NICHEGLOBALREGIONALSource: eMarketer and Sierra VenturesPortfolioInvestment Opportunities

112. Major IT DisruptorsVenture Capitalist Perspective of Emerging Technologies AgendaState of Venture Capital – Investment climate, IPO’s from a long term perspective

113. Big Data and Analytics – Massive Scale in Real-time – Those who can leverage will win

114. Cloud - The New Data Center – ‘X-as-a-Service’ and at commodity prices

115. Mobility – The New Starting Point – consumerization sets the standard for access, simplicity and adoption

116. Social – The New Internet – the social chain as the new dimension across the globe

117. Sierra Ventures – Our Approach

118. Outlook and QuestionsSierra Ventures 29

119. Sierra Ventures – since 1982 - $1.5Billion AUM Investing Strategy – Early Stage, Global, IT Sectors StageSizeGeography $3 – $8M Initial$8 – $12M TotalOwnership 20%-25%GrowthEarly Stage30(MMYT) (MERU) (NASD: FIRE) (NASD: AUTH)Investments and ExitsAcross the U.S / Canada.Some IPO’s&Acquisitions

120. Sierra Ventures Deal Flow Thousands of Ideas to a Few Funded 0.33% deals reviewed are fundedIndependent origination

121. Sub-group evaluation

122. Partnership decision31

123. Sierra – Stages of Success SOURCINGEXITSCALING

124. Sierra CIO Advisory Board Global IT Leaders -- Meet Monthly TechnologyFinanceTelco / MediaConsumer / Manufacturing / IndustrialRetail / HospitalityPharma/Health/Govt.

125. Sierra CIO SummitEnable Strategic Exchange of Best Practices for CIO Board Members Five Sierra “CIO Summits” held since 2006 – Each with a Major KeynoteMarc BenioffCEOEric SchmidtCEOMeg Whitman CEOMark HurdCEOEnrique SalemCEOTom SiebelCEOCharles Phillips Co-PresidentJoe TucciCEO34

126. Sierra VenturesTracking: The Ripple Effect of DisruptionsSocialCloudBigDataMobilePrivateCloud SoftwareSocial Media PresencePredictiveAnalyticsMobile App Dev Platform

127. Recent Liquidity EventsGreenplum purchased by EMC for $400M (closed 8/2010) American Fiber Systems purchased by Zayo Group for $115M (closed 9/2010)Simplify Media purchased by Google (closed 3/2010) MakeMyTrip.com completes $80M IPO (8/2010) CarWale purchased by Axel Springer (closed 12/2010) Makara purchased by Redhat (closed 11/2010)InvenSense files for $100M IPO led by Goldman and Morgan Stanley

128. Sierra Ventures Recent Investments Alpine Data Labs received $2.75M from Sierra (2/2011): San Mateo, CA Predictive Analytics model & score against all dataDynamicOps received $7.975M from Sierra (2/2011): Burlington, MA Cloud automation - private cloud & VDI deployments Payvment received $4.5M from Sierra (11/2010): Palo AltoSocial network powered e-commerce platformAppcelerator received $6.5M from Sierra (10/2010): Mt. ViewMobile application cross-platform development solutionPrelert received $1.25M from Sierra (8/2010): Framingham, MAIT incident and root cause analysis solutionRuna received $3.75M from Sierra (7/2010): Mountain View, CAOnline conversion marketing solution

129. Investor Deck Presentation GuidelinesProduct Timing [1 slide]

130. Define recent trends that make your solution possible

131. Show us the historical evolution of your category if it is an existing market

132. Business Model [open]

133. Source of Revenue and ASP

134. Distribution channels

135. Customer list and pipeline

136. Competition [1-2 slides]

137. List your direct and indirect competition

138. Show where your product physically sits in the ecosystem

139. Provide detail on the advantages/disadvantages of your product vs. what is currently

140. available through competitors (matrix view preferred)

141. Financials [1-2 slides]

142. Income Statement, Balance Sheet and Cash Flow statement and forecast

143. Summary of the Cap table

144. Summarize the current financing roundCompany Snapshot [1-2 slides]Simple single sentence overview of the companySnapshot DataDate of IncorporationNumber of EmployeesOffice LocationsTotal funds raised to DateTeam [1-2 slides]Founders & ManagementBoard of Directors/Board of AdvisorsProblem [1 slide]Describe the customer painDescribe how that pain is met todayTotal Addressable Market [1 slide]Calculate or provide third party research on the TAM (top down and bottoms up)Solution [open]Explain your Company’s value proposition in order to solve the problem described in theprevious “Problem” slideDescribe the Product (functionality, features, architecture, what core IP do you have).Show your Product development roadmapProvide use cases (or customer case studies if appropriate)

145. Steps Who to pursue – do your diligence Crunchbase, PEHub, VentureBeat, VC sites, VC FB/Twitter Introduction Work your network – Paragraph from your ‘recommender’ Pre-View Call Likely a phone call – Ask questions – Have examples Know their background Enable possible next steps – “We wont begin fundraising until... “First Meeting Investor Deck – Team, Traction, Technology Build your advocate – what’s their outcome goal Partner Meeting Mixed Audience – do your homework Predefine an outcome – to move to due diligence calls (have some done already)Due Diligence Your contacts .... And those you don’t know. (help make it simple)Term Sheet Study the terms early – How competitive is the deal

146. Due Diligence Effort Tab 1 Executive Summary/Business PlanTab 2 Investor PresentationTab 3 Sales & Market Briefing Tab 4 Product Information Tab 5 Technology Information Tab 6 Competitive analysis Tab 7 Operations - Engineering Schedule/Manuf process/Quality MetricsTab 8 FinancialsTab 9 Customer references Tab 10 Future product roadmap(go over new products, what’s exciting..) Tab 11 Valuation & Exit Analysis Tab 12 Management Bios & References Tab 13 Cap Tables & Term Sheets Tab 14 Patents & Applications (patent review – what’s defendable?) Tab 15 Market research, white papers, news articles, etc. Tab 16 Misc. emails, etc.

147. Funding and Rounds Funding Expectations: $10M company or $200M+... Less is More: Raise what you need – Milestones support valuationPreferred = RiskFounder: 1-4 (2 equal partners ideal) Convertible Debt (Bridge Loan) at 20% discount to next round Venture Debt: too early must be collateralized, venture debt generally 20-30% of last round, Servicing the debt with Capital OK, warrants nominal, Prime+1.5pts Employee Option Pool: 20% CxO Hires: CEO 5-7%, COO 2-3%, VPS/VPE/VPM ~1½%