Unveiling the Data Behind Effective Scaling with ICONIQ Growth

Christine Edmonds
Partner & Head of Analytics
ICONIQ Growth
@Edmonds_C
Unveiling the Data Behind
Effective Scaling
Doug Pepper
General Partner
ICONIQ Growth
@dougpepper
1

Entrepreneurs Backing
Entrepreneurs
We partner with visionaries
defining the future
of their industries to
transform the world.

3
ANALYTICS & INSIGHTS
EMPOWERING OUR PORTFOLIO WITH PROPRIETARY ANALYTICS AND INSIGHTS
ACROSS BUSINESS OPERATIONS AND STRATEGY
Bespoke Analytics &
Advisory
Signal Identification &
Sourcing Intelligence
In-Depth Research &
Studies
Comprehensive, topical
reports leveraging
proprietary data to form
an evolving view of ‘best-
in-class’ performance
Bespoke analytics, one-
on-one advisory, and
custom tools to address
high-impact questions
across portfolio
operations and strategy
Innovative approaches,
data partnerships, and
intelligence layer applied
to signal identification
and sourcing

4
What does
best in
class
growth and
efficiency
look like?
2022 Insights

5
Methodology
Our analyses leverage
quarterly operating and
financial data from 92
enterprise SaaS
companies.
Most companies included
represent ICONIQ Growth
investments, and other
public companies were
selected based on IPO
performance.
Notes: As of August 2022; Trademarks are the property of their respective owners. None of the companies illustrated have endorsed or recommended the services of ICONIQ; Full list of ICONIQ investments can be found here
Sources: Financial and operating data from select ICONIQ Growth enterprise SaaS investments and public data from SaaS IPOs through 2H 2013 – 2021 via Factset and quarterly earnings
ICONIQ Growth Portfolio Companies
Select Public Companies
Private Public or Acquired

6
Topics we’ll cover today:
• How quickly and consistently should ARR be growing as you scale
from $10M ARR?
• What are the key drivers of growth?
• What matters more - growth or efficiency?
• What does best in class efficiency look like, and does it come at the
cost of productivity and growth?
• What does best in class performance look like in the context of 2022?
• What are companies doing to mitigate growth deceleration and
reorient themselves toward an efficiency-focused mindset?

Topline Growth
We have consistently seen
companies with top-quartile
growth double ARR in each of
the first 2-3 years as they
scale from the $10M ARR
threshold.
After $100M, top performers
maintain meaningful double-
digit growth.
8
Net New and Ending ARR from $10M, in Years
Net New ARR
Ending ARR
~2.5x
~2.2x
~1.8x
~1.5x
~1.5x
Pre-IPO
YoY Growth
Notes: Information provided accurate as of August 2022
Top Quartile
$16M $30M $44M $54M
$76M
$101M
$10M $26M
$56M
$100M
$154M
$230M
0 1 2 3 4 5

Contributions to Growth
As healthy enterprise
companies scale, they
can increasingly rely
on existing logos to
generate new ARR
opportunities through
upsell or expansion.
Downsell / logo churn
mix stays relatively
consistent as
companies scale.
9
Gross New ARR
Distribution
Gross Churn
Distribution
70% 65%
54% 51%
30% 35%
46% 49%
<$25M $25-$50M $50-$100M $100M to IPO
Expansion
New Logo
Average
59% 63% 56% 56%
41% 37% 44% 44%
<$25M $25-$50M $50-$100M $100M to IPO
Downsell
Logo
Churn

Net Dollar Retention
We consistently see
companies with top-
quartile NDR achieving
120%+ even at scale.
These companies have
exceptional NDR from
very early stages,
underlying the importance
of growing the existing
customer base at any
stage.
10
Gross and Net Dollar Retention, Years after $10M
98% 95% 94% 94% 93% 96%
128% 130%
124% 126%
120% 123%
0 1 2 3 4 5
Net Dollar
Retention
Gross Dollar
Retention
Top Quartile

Growth vs. Efficiency – what matters more?
11
Correlation (R2) of Forward Revenue Multiple Over Time
Rule of 40
(Revenue Growth + FCF %)
Revenue Growth
Revenue Growth surpasses
Rule of 40 for largest weighting
in multiple correlation
Initial convergence of growth and
profitability in driving multiples, as
the weight of FCF increases
Notes: Information provided accurate as of July 2022
Sources: Public data from SaaS IPOs through 2H 2013 – 2021 via Factset and quarterly earnings
0.46
0.30
0.45
0.42
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2³
2019 2020 2021 2022
Median

Per FTE Efficiency and Productivity
Productivity and
efficiency are not
mutually exclusive –
we have seen multiple
examples of
companies that have
meaningfully
increased FTE
productivity while
maintaining FTE
efficiency.
13
ARR and Annualized OpEx per FTE, Years after $10M
$97K
$128K
$163K
$177K
$199K
$230K
$207K
$215K
$192K $196K
$198K $205K
0 1 2 3 4 5
Annualized
OpEx per FTE
ARR per FTE
~$100M ARR
Median

0 1 2 3 4 5
237%
175%
146%
119%
103% 94%
Efficiency by Function
Over time, revenue should
outpace operational spend.
R&D tends to make up an
increasingly smaller
proportion of overall spend
as leverage is achieved
while S&M increases in
share as companies scale
and fuel their GTM engine.
14
G&A
R&D
S&M
OpEx as a % of Revenue by Function, Years after $10M
Average

Burn Multiple
For every dollar that goes
into my organization, how
many dollars in revenue
am I generating?
We typically recommend
companies have a burn
multiple under 2x while
scaling.
On average, companies
break-even in Year 6 after
reaching ~$10M
15
Burn
Multiple
Net New
ARR
FCF
Burn Multiple: FCF / Net New ARR, Years after $10M
Average
-$19M -$20M -$26M
-$39M
-$50M
$10M $14M $21M
$37M
$51M
1.9x
1.4x 1.2x 1.1x 1.0x
0 1 2 3 4
Non-profitable companies

GROWTH & EFFICIENCY
IN 2022
16

97%
100%
99%
3%
Q1 Impact
While shift in public and
private markets became very
real in Q1, most companies
analyzed were able to
maintain strong performance
with a median of 99%
attainment of incremental
topline, coupled with healthy
balance sheets coming out of
2021 (median 29 months
runway).
17
Net Incremental Bookings: Median Attainment vs Plan
Attainment defined as actuals as
% of annual plan of net
incremental bookings
2021
Q1 2021
Q1 2022
Q2 2022
1%
3%

Q2 Impact
The acceleration of impact
was seen through Q2, with
median topline attainment of
87%.
In fact, recent months seem
to be reflecting accelerated
impact with a greater number
of June / Aug quarter-end
companies missing plan.
18
2021
Q1 2021
Q1 2022
Attainment defined as actuals as
% of annual plan of net
incremental bookings
Q2 2022
97%
100%
99%
87%
3%
13%
1%
3%
Net Incremental Bookings: Median Attainment vs Plan

Q2 Impact: Public Markets
19
Beat and Raise for Public SaaS Companies
95% 3.5%
91% 3.2%
78% 1.2%
Q1 EARNINGS
N = 96
Q2 EARNINGS
N = 63
Beat against Consensus
(Median Analyst Estimates)
Beat against
Management Guidance
Raised Full-Year
Estimate
% of Companies
Median Beat /
Raise
89% 2.5%
87% 2.1%
50% 0.2%
% of Companies
Median Beat /
Raise
Median
Notes: Information provided accurate as of August 2022; Q2 n-size lower due to not all companies having reported earnings yet
Sources: Public data from SaaS IPOs through 2H 2013 – 2021 via Factset and quarterly earnings

Managing Efficiency
Most companies fall into one of
two camps of efficiency:
1. A strong Q2 driven by beats
across both top and bottom
line. Notably, companies in this
group have an average scale
~3x that of other buckets.
2. A miss on topline plan in Q2
partially made up by a better
burn rate than originally
planned.
20
Attainment: Topline vs Bottomline as of Q2
Beat topline plan
with more burn than
anticipated
Beat topline plan
with less burn than
anticipated
Missed topline
with more burn than
anticipated
Missed topline
with less burn than
anticipated
Scale (2021 ARR or Revenue)
Topline Attainment
Bottomline
Attainment
Median
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
0% 50% 100% 150% 200%

Strategies to Navigate the Current Environment
21
While macro factors like sector headwinds and buyer impact have certainly played into
quarterly performance, companies who have been able to beat topline and bottomline
plan have also taken certain strategic actions to achieve their results.
SPEND
REDUCTIONS
REFORECASTING
/ ADJUSTMENTS
TO PLAN
HIRING SLOWDOWN
/ FREEZE
CHANGES TO GTM
STRATEGY
REDUCTIONS IN
FORCE (RIF)
LEVERAGE
OFFSHORE
RESOURCES
Most Common Less Common

Key Takeaways (1 of 2)
22
Productivity and efficiency are not mutually exclusive – in fact,
increasing productivity and efficiency is critical to getting to scale.
We have consistently seen companies with top-quartile growth
double ARR in each of the first 2–3 years as they scale from ~$10M.
Growth from existing logos becomes increasingly important as
companies scale.
The tides have started to shift from a historical model prioritizing
growth above all else – requiring more founders to put an emphasis
on efficiency earlier in their growth journey.

Key Takeaways (2 of 2)
23
Nevertheless, there continue to be examples of companies that are
meeting growth plans while preserving efficiency.
Common strengths include a laser focus on customer success,
product investments, forecasting rigor, and proactive planning.
The impact of the macro environment accelerated throughout Q2,
with only a handful of companies analyzed meeting topline plan.
Similarly, public SaaS companies are also navigating uncertainty in
the current environment with the percentage of companies beating
and raising down since Q1.

Additional Insights and Studies from ICONIQ Growth
24
Find this content and more at
iconiqcapital.com/growth/insights
Topline Growth & Operational Efficiency
2022 Refresh
Future of Work Series Go-to-Market Series
The Path to IPO
Series
Engineering
Efficiency

How to Get in Touch
Follow ICONIQ Growth
@ICONIQGrowth
Christine Edmonds
@Edmonds_C
cedmonds@iconiqcapital.com
Doug Pepper
@dougpepper
doug@iconiqcapital.com

Disclosure
UNLESS OTHERWISE INDICATED, THE VIEWS EXPRESSED IN THIS PRESENTATION ARE THOSE OF ICONIQ GROWTH ("ICONIQ" OR THE "FIRM"), ARE THE RESULT OF PROPRIETARY RESEARCH, MAY BE
SUBJECTIVE, AND MAY NOT BE RELIED UPON IN MAKING AN INVESTMENT DECISION. INFORMATION USED IN THIS PRESENTATION WAS OBTAINED FROM NUMEROUS SOURCES. CERTAIN OF THESE
COMPANIES ARE PORTFOLIO COMPANIES OF ICONIQ GROWTH. ICONIQ GROWTH DOES NOT MAKE ANY REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OF THE INFORMATION
OBTAINED FROM THESE SOURCES.
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SECURITIES WHICH WILL ONLY BE MADE PURSUANT TO DEFINITIVE OFFERING DOCUMENTS AND SUBSCRIPTION AGREEMENTS, INCLUDING, WITHOUT LIMITATION, ANY INVESTMENT FUND
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