This document provides a disclaimer for an informational presentation. It states that the presentation should not be considered investment, legal, or tax advice. It also notes that the information is being provided as of August 2023 and may not be updated. Certain logos and trademarks are included for identification purposes only and do not constitute endorsement. The document also includes a full disclaimer and states that past performance is not a guarantee of future results.

3. This disclaimer applies to this document, referred to herein as the “presentation.” This presentation is being provided for
informational purposes only. Nothing herein is or should be construed as investment, legal or tax advice, a recommendation of
any kind or an offer to sell or a solicitation of an offer to buy any security. This presentation does not purport to be complete on
any topic addressed. The information in this presentation is provided to you as of August 2023 unless otherwise noted and
Battery Ventures does not intend to update the information after its distribution, even in the event the presentation becomes
materially inaccurate. Certain information in this presentation has been obtained from third party sources and, although believed
to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed.
Certain logos, tradenames, trademarks and copyrights included in the presentation are strictly for identification and informational
purposes only. Such logos, trade names, trademarks and copyrights may be owned by companies or persons not affiliated with
Battery Ventures and no claim is made that any such company or person has sponsored or endorsed the use of such logos,
trade names, trademarks and copyrights in this presentation. This presentation includes various examples of companies in
which Battery Ventures has invested. These examples are included as illustrations of sectors in which Battery Ventures invest.
For a complete list of all companies in which Battery Ventures has invested, please visit here. Past performance is not evidence
of future results and there can be no assurance that a particular Battery portfolio company investment will achieve comparable
results to any other investment. There can be no assurance that the investment objectives or the investment strategies
described in this presentation will be successful.
The information contained herein is based solely on the opinion of Marcus Ryu and nothing should be construed as investment
advice. The anecdotal examples throughout are intended for an audience of entrepreneurs in their attempt to build cloud focused
businesses and not recommendations or endorsements of any particular business.

4. • Co-founded Guidewire* in 2001
• CEO through 2019
• Now Partner at Battery Ventures
• IPO in Jan 2012 (NYSE:GWRE)
• Market cap: ~$6.5 billion
• LTM revenue: ~$900 million
* Denotes a past or current Battery company. For a full list of battery investments please click here.
Marcus Ryu
Partner, Battery Ventures
Guidewire* Snapshot

5. “Great people know their value
in the talent marketplace”
therefore
“Great people must be highly paid
for us to attract/retain them”
“We must have highly paid people”
and
“Great companies are
built by great people”
and, therefore
This argument…
(1) Proves too much
(2) Underestimates
the challenge of
value creation
(3) Abdicates a
startup’s duty to
do more with less

6. Hallmarks of a high
comp culture
• Aspirational comp peer groups (larger,
more mature, outlier successful)
• Paying more than 50th percentile,
especially in high comp geos
• Matching near-term cash comp when
hiring from established companies
• Steadily increasing non-cash comp,
amenities, benefits, offsites, etc.

7. Public SaaS LTM
Multiples (median)
All SaaS companies (n=106): 6.6x
Above Rule of 40 (n=37): 11.5x
Below Rule of 40 (n=69): 4.6x
• High growth is of course
rewarded but must be very
high without profitability
• Revenue multiples are only
proxies for future profitability
• A high expense base heavily
burdens enterprise valuation
Source: Battery research based on data obtained from public SaaS companies’ filings as of 8/15/2023.

8. Revenue
COGS
Gross Profit
S & M
R & D
G & A
Total OPEX
Operating Profit
+ D & A
EBITDA
EBITDA Margin
“Frugal Comp”
company
“High Comp”
company
$10,000,000
2,000,000
8,000,000
3,000,000
2,000,000
1,000,000
6,000,000
2,000,000
500,000
$2,500,000
25%
$10,000,000
2,000,000
8,000,000
3,600,000
2,400,000
1,200,000
7,200,000
800,000
500,000
$1,300,000
13%
+20%
• Assuming a 10x EBITDA multiple:
FrugalCo is worth $25 million
HighCo is worth $13 million
• +20% in OPEX  -50% in value
• By depressing enterprise value,
high comp cultures end up
disserving employees themselves
“Frugal Comp” and “High Comp” are hypothetical companies. “Frugal Comp” pays market rate salaries
while “High Comp” pays 20% above market rate.

9. • The Winner’s Curse: hiring more mercenary talent at top dollar
• Growth overreach  higher probability of layoffs
• More brittle culture: short-term and vulnerable to demoralization

10. Most important of all: To lead by example!
• Equity value that can grow to many multiples of current
• Profound learning/growth in service of a world-changing mission
• Immense professional credential of building a new market leader
Your persuasive assets