2015-Tech-Growth-Equity Outlook

2015 TECH

GROWTH EQUITYReview and Outlook

Year of the

UnicornWill 2015 bring the same?

Thank you for taking time to read our 2015 Tech Growth Equity Annual Review.

2014 was a remarkable year in which the scale and breadth of the private tech equity market established it’s role as the

right source of capital and expertise for the journey from innovation to profitability. Entrepreneurs and early-stage

investors realized the private growth equity market can provide all the capital and connectivity needed to build the

stability a business needs to succeed as a widely-held public company.

Will 2015 deliver more of the same? Will Unicorns be born at the same pace? Do burn rates need to be re-evaluated?

How should entrepreneurs and investors plan to fund growth?

We analyzed every tech growth financing over $15 million in North America and Western Europe to provide you with

perspective on what happened and what we expect to happen. Many organizations publish data on broad venture or

private equity activity. We have a unique viewpoint that focuses on growth investing rather than seed or early stage

investing, is specific to the tech sector and integrates private equity growth tech investment with late stage venture

investing. We believe our analysis provides unique insight to tech company operators and investors focused on how best

to fund the next phase of growth.

Our review delivers details on how investors allocated growth capital across sub-sectors within technology. We also

highlight the most active growth equity, corporate and crossover investors in the market. We review how capital supply

and expected volatility should shape your 2015 financing plan. While Asia is outside the scope of this review, we do

include a snapshot of the recent expansion of Asian growth finance.

We hope you find our analysis useful for your planning. Our team is available to discuss current market conditions and

your options for financing growth or liquidity. We look forward to helping you fund your growth in 2015.

Mike MacKeenHead of Private Capital Markets

617.674.5507

1. Executive Summary

2. 2015 Outlook

Tech Capital Supply

IPO Pipeline

M&A Buyers

Market Volatility

3. 2014 Investment Activity

Most Active Investors

Trends in Investment Terms

Geographic Breakdown of Investments

4. Investor Activity Across Tech Sectors

Spotlight Sectors

− Sales Infrastructure – CRM & SFA

− Human Capital Management

5. Key Private Market Trends

Corporate Investment

Crossover Investment

Growth in Asia

6. Capital Supply - 2014 GP Fundraising

Table of Contents

3

Executive Summary

2014 was a banner year for tech companies raising growth equity in the private market

Investors committed $74B to drive growth and provide liquidity

21 new companies joined the “Unicorn” club with valuations in excess of $1,000,000,000

Uber raised capital at a $41B valuation, a value that would rank it 32nd among NASDAQ listed companies

2014 results create questions for CEOs planning to raise money in 2015

Do investors believe burn rates and valuations are getting too high?

Have the private markets replaced the public markets as the default source of growth equity?

Will corporate and crossover investors exit private investing at first sign of a “Bear” market?

Are the Unicorns really market bellwethers that will become valuable public companies?

The growth equity market remains open in 2015, but there is caution in Q3 / Q4

Supply is strong – Tech growth funds raised $253B in 2014 following $263B raised in 2013

Liquidity should stay strong – M&A will be supported by strong buyer balance sheets and the continuing need to fill product

line gaps. The IPO calendar includes companies of scale that can succeed in the public market

The greatest risk to continued capital access is an expected increase in volatility

2015 should be more volatile due to expected US Federal Reserve attempts to raise interest rates, an increased likelihood

of political events impacting the market and increased commodity price fluctuation

Initial 2015 market activity validates concern over rising volatility

We advise companies to raise 18 – 24 months of needed capital in the first half of 2015

4Note: Tech private placement include investments greater than $14.9M, including pending transactions. Tech IPOs are completed offerings greater than $14.9M. Public markets

include companies traded on all major North American exchanges and LSE AIM Market. Private markets include companies receiving investments with HQs in the US, Canada,

and developed Europe. Sources: Capital IQ, SEC Filings, Bulger Partners Analysis

2015 Outlook

Capital Supply is Strong Entering 2015

Tech Investors Need to Deploy $262 Billion

6

$0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$261.8B

We estimate that the tech sector private growth capital “overhang” exceeds $250 Billion entering 2015− Our methodology includes conservative assumptions of likely annual investment capacity

Capital supply is adequate to support take-private transactions of significant scale

Supply will also allow routine private growth financings equal to the size of a typical growth company IPO

Note: Funds include only funds that have historical interest in Media, Internet, Information Technology, Telecommunications, or HCIT. Sources: S&P CapIQ, BP Analysis

IPO Pipeline Includes More Mature Companies That Can Succeed

7Source: S&P CapIQ, Bulger Partners Research, CB Insight, Forbes, Crunchbase

Company Year Founded Money Raised ($M) Description

2009 $208Actifio helps hundreds of global enterprise customers and service provider partners virtualize

their data, just as they virtualized their servers and networks

2008 $795Airbnb operates an online community marketplace for people to list, discover, and book

accommodations worldwide online or from a mobile phone

2008 $207AppDynamics develops application performance management (APM) solutions that deliver

problem resolution for highly distributed applications

2007 $311AppNexus operates as a technology company that provides trading solutions and powers

marketplaces for Internet advertising

2007 $142Auction.com is an online real estate marketplace for all real estate assets, serving all varieties

of customers

2008 $1,200Cloudera is an enterprise software company that provides Apache Hadoop-based software and

training to data-driven enterprises

2009 $72CloudFlare is a web performance and security company that provides online services to protect

and accelerate websites online

2007 $193Credit Karma develops tools and maintains information resources that help users to manage the

credit aspect of their financial health

2000 $517Deem is a cloud and mobile commerce company, delivering Commerce-as-a-Service (CaaS) to

a large and diverse ecosystem of customers

2003 $460DocuSign employs cloud-based e-signature technology to allow users to sign and send

documents online

2007 $1,100 Dropbox enables users to protect their files with admin control, dedicated support, and more

2006 $200Eventbrite is an online ticketing service that enables users to create, promote, and sell tickets

for events

1996 $291 Good is a pioneer and world leader in secure mobility solutions for businesses

2009 $214Houzz is an online platform for home remodeling, architecture, interior design, decorating,

landscape design, and home improvement

2005 $158Practice Fusion provides a free, web-based Electronic Health Record (EMR) system and

medical practice management technology to physicians

2001 $292Proteus develops digital products that collect and aggregate various behavioral, physiological

and therapeutic metrics

2006 $538 Spotify provides a highly customizable music streaming service

2009 $591Square is a merchant services aggregator and mobile payment company that aims to simplify

commerce through technology

2009 $3,300 Uber provides a smartphone application that connects drivers with people who need a ride

Active M&A Buyers Have Currency to Continue Acquiring

8Source: S&P CapIQ, Bulger Partners Research

Company Market Cap ($M) Cash and Cash Equivalents ($M) Recent Select Tech Acquisition Price ($M)

$621,614 $13,844 ~$3,200

$141,544 $6,726 $175

$209,590 $3,323 $500

$345,469 $17,628 $555

$70,319 $15,133 $350

$176,236 $2,561 $1,500

$155,515 $10,716 ~$160

$381,150 $8,669 $2,500

$191,068 $17,769 $5,200

$118,527 $7,907 $2,400

$35,740 $782 $391

16.4

22.4

10.0

20.0

30.0

40.0

50.0

60.0

70.0

CBOE Volatility S&P 500 Index (^VIX) - Index Value 2008-Present Average

Volatility is Expected to Rise as it Returns to Historical Norms

9

Issuers Advised to Raise in First Half Due to Greater Predictability

Investors Can Commit Capital More Easily When a Stable Sense of Pricing Exists

The last eight quarters have been unusually stable

– The VIX index, a measure of equity volatility, remained below 15 for most of 2014 and only broke 20 three times

With the NASDAQ trading at a forward P/E of 22x and the Dow trading at 15x, the markets are in line with historic norms,

reducing the likelihood of a 2001 style market selloff

Risk to stability is more likely in Q3 / Q4. The US Federal Reserve is expected to attempt to raise rates. Commodity

prices in oil and metals are less certain as demand in China has become less predictable

Predictability of a growth financing is expected to be higher in the first half of 2015

CBOE Volatility S&P 500 Index (^VIX) - Index Value

Source: S&P CapIQ, Bulger Partners Research

2014 Investment Activity

Familiar Names Lead the Most Active Investor List




Top Investors By Volume Top Investors By Value Involvement

Investor Transactions (#) Select Investments

39IFTTT

Magic Leap

Reddit

37Freshdesk

HootSuite

Prezi

37Magic Leap

RelateIQ

Uber

37Airbnb

MongoDB

Uber

28Jet.com

Mulesoft

WellTok

24MINDBODY

Pinterest

ClearSlide

24Comuto

Hortonworks

Pure Storage

23Lookout

Maplebear

Stripe

Investor Transactions ($M) Select Investments

$7,163Compuware

Riverbed Technology

TravelClick

$5,867Advanced Computer Soft.

Return Path

TIBCO

$5,543First Data Holdings

Magic Leap

Internet Brands

$5,286Magic Leap

RelateIQ

Uber

$4,232Airbnb

MongoDB

Uber

$4,165Mozido

Pure Storage

Uber

$3,866 First Data Holdings

$3,638HootSuite

Pinterest

Uber

$35.9

$17.1

$61.6

$37.3

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

2011 2012 2013 2014

Private Investors Committed $74 Billion to Tech Economy in 2014

$21.0$26.8

$22.2

$36.5

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

2011 2012 2013 2014

Minority Investments in the Tech Sector ($B)

Control Investments in Tech Sector ($B)

12

$74B

Capital Increased 64%

Includes Dell

MBO ($27B)

Note: Tech private placement include investments greater than $14.9M, including pending transactions. Tech IPOs are completed offerings greater than $14.9M. Public markets



Private Investment Outpaced the Public Market Again in 2014




$8.3 $12.2$22.2

$36.5

$33.2 $25.1

$61.6 $37.3

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

$90.0

2013 2014 2013 2014

Public PM

Fo

llow

On

Includes Dell

MBO ($27B)

Capital Commitment to Tech Sector ($B): 2014 vs 2013

The Private Market has Become the Core Source of Growth Capital for the Tech Sector

Private Market invested nearly 2x more in tech than the Public Market

Most significant 2014 shift was 64% growth in minority capital commitment over 2013

2014 control investment level in tech grew 9% when normalized for unique 2013 Dell MBO

$37.3

$73.8

13

Private Market

IPO

Co

ntr

ol

Min

ori

ty

Public Market

Volume Expanded 32% in Private Market in 2014

43 57

408

552

120 112

54

57

0

100

200

300

400

500

600

700

2013 2014 2013 2014

Public PM

Volume in Tech Sector: 2014 Vs 2013

Private Market Breadth Allows Companies to Stay Private Longer

The private market supported over 600 tech companies in 2014

– 32% above 2013 investment volume

– Minority private financing volume was nearly 10x above IPO market volume

In a “Bull” market, the public market financing volume was essentially flat

14

Private Market

Follo

w O

nIP

O

Co

ntr

ol

Min

ori

ty

609

169

Volume Increased 32%




462

163

Public Market

Private Market Delivered Minority Financings of Scale

Investment ($M) Target Investor BP Primary Classification

$3,500Kohlberg Kravis Roberts & Co.; Stone Point Capital; Trident Fund V;

KKR 2006 Co-investment FundProductivity/ecommerce

$1,800

Kleiner Perkins Caufield & Byers; Menlo Ventures; New Enterprise

Associates; Sequoia Capital; Lone Pine Capital; Fidelity Investments;

Baidu; Wellington Management Company; TPG Growth; Qatar

Investment Authority; Valiant Capital Partners

Consumer Product

$900 T. Rowe Price Group; MSD Capital; Intel Capital; Google Ventures Enterprise Application Software

$750 The Blackstone Group L; GIC Pte. Enterprise Application Software

$542

Kleiner Perkins Caufield & Byers; KKR & Co.; Vulcan Capital;

Google; QUALCOMM Ventures; Legend Pictures; Andreessen

Horowitz; Obvious Ventures I; Obvious Ventures

Consumer Product

$450 BlackRock; Fidelity Bank; T. Rowe Price Associates Enterprise Application Software

$400 Wellington Management Company; MasterCard eCommerce

$350 Insight Venture Partners; Vostok Nafta Investment.; Kite Ventures eCommerce

$250 Google Capital Consumer Internet




Control Buyers Acquired Tech Sector Assets at Competitive Prices

Investment ($USD) Target Investor BP Primary Classification

$4,534 Vista Equity Partners; Vista Equity Partners Fund V Enterprise Application Software

$3,579Elliott International; Elliott Management; Elliott Associates; Elliott

International Capital AdvisorsCommunication and Data Services

$3,140Advent International; ATP Private Equity Partners; The ATP Group;

Via Venture Partners A/S; Bain Capital Private EquityEnterprise Application Software

$2,366 Thoma Bravo Enterprise Application Software

$1,677Shanghai Pudong Science and Technology Investment; Hua Capital

ManagementSemiconductors/Servers

$1,200 Centerbridge Partners Enterprise Application Software

$1,140

Vista Equity Partners; Vista Equity Partners Fund V-A; Vepf V Faf;

Vista Equity Partners Fund V Executive; Vista Equity Associates V;

Vista Equity Partners Fund V-B

Enterprise Application Software

$1,100Hellman & Friedman; Hellman & Friedman Capital Partners VII;

Google CapitalEnterprise Application Software

$1,079 Apax Partners; Apax VIII IT Services

$1,032 Siris Capital Group; Siris Partners II Enterprise Application Software

16Sources: Capital IQ, SEC Filings, Bulger Partners Analysis

Transaction Terms are Favoring Issuers

Up and Down Rounds by Quarter – Equity Financings

Source: WSGR Entrepreneurs Report

Up Rounds Are Near Historic Highs and Terms Are Favorable

The wealth of up rounds suggests investors are giving companies the benefit of the doubt and placing credence in future

growth plans

– Up rounds in 2014 made up about 80% of the transactions

– Only about 70% of rounds in 2012 and 2013 were up rounds

Terms are moving closer to standardization

– Non-participating preferred structure

– Dividends, but non-cumulative

– No pay to play provisions

17

0

10

20

30

40

50

60

70

80

90

100

Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014

Up Down Flat

California Companies Still Overweight in Market

39% of growth capital invested in the

western hemisphere went to California

companies

Uber impacted allocation, but the figure is

still 35% CA normalized for Uber

Investor preference toward California

companies remains an issue for non-

California issuers to overcome

2014 Geographic Allocation of Growth Equity Capital California Bias an Issue

18

California

39%

Georgia

New York

Vaud

Michigan

Berlin

Greater

London

Capital Region

Of Denmark

New

Jersey

Utah

Quebec

Wisconsin

Massachusetts

Arizona

Akershus

Surrey

Utah

Florida

Texas

Stockholm

County

New York & Berlin Gain, Texas is Light

New York is attracting growth capital as

ad tech and social media gain share

Berlin attracted almost as much growth

capital as London

Texas and North Carolina companies

attracted surprisingly little growth capital

given strong start-up communities in

Austin and RTP

Strength in Michigan, Georgia, Wisconsin

and Denmark was driven by large buyout

investments (Compuware, First Data,

Renaissance Learning and Nets

Holdings)




Madrid

Investor Activity Across Tech Sectors

Enterprise Applications and Consumer / eCommerce Expanded

Enterprise Application Software Has the Continued Interest of Investors

20

Enterprise Application Software had a robust year, attracting almost 40% of total tech growth equity capital

Social and mobile evolution drove increase in Consumer Internet investment

IT Services investment declined as the migration to cloud changed the enterprise software deployment model

Despite continued innovation, CleanTech remained challenged as the Solyndra bankruptcy still hangs over sector




0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Other

IT Services

CleanTech

Consumer Product

Enterprise Infrastructure Software

Semiconductors/Servers

Communication and Data Services

Consumer Internet

eCommerce

Enterprise Application Software

2013 2014

Percent of Total Tech Growth Equity Investment Volume by Sub-Sector

Horizontal Applications Displaced Vertical Applications

Investor Focus on SaaS Business Models Created Bias Toward Horizontal Applications

21

Investment in sales infrastructure shifted from marketing automation to sales execution tools within the CRM / SFA

segment

Human Capital Management gained attention as next generation talent recruiting platforms began to scale and benefits

management continued to move to cloud-centric solutions

Platforms for deploying Hadoop and its derivatives attracted capital within the BI / Analytics segment as the enterprise

begins to convert Big Data from lab projects into production systems




0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Vertical Other

HCIT

Marketing Automation

Engineering Software

FinTech

Education

HCM

ERP/Supply Chain

CRM/SFA

Productivity/Other

BI/Analytics

2013 2014

Percent of Total Enterprise Application Software Investments by Sub Sector

Sector Spotlight: Sales Infrastructure – CRM & SFA

Percentage Allocation to CRM/SFA Increased In 2014

22

Private Placement

$100M

Top Financial Investors Top Corporate Investors

Interesting 2014 Minority Investments

Private Placement

$50M

Private Placement

$90M

Private Placement

$50M

Private Placement

$100M

Private Placement

$20M

Interesting Companies to Watch in 2015

Last Round: $22M Total

Raised: $33M

Founded: 2007

Last Round: $31M

Total Raised: $44M

Founded: 2010

Last Round: N/M

Total Raised: N/M

Founded: 2011

Last Round: $20M

Total Raised: $34M

Founded: 2010




0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

2014

2013

Sector Spotlight: Human Capital Management

Percentage Allocation to HCM Investments Jumped in 2014

23

Private Placement

$750M

Top Financial Investors Top Corporate Investors

Interesting 2014 Minority Investments

Private Placement

$63M

Private Placement

$67M

Private Placement

$85M

Private Placement

$51M

Private Placement

$20M

Interesting Companies to Watch in 2015

Last Round: $16M

Total Raised: $63M

Founded: 2009

Last Round: $41M

Total Raised: $41M

Founded: 2005

Last Round: $25M

Total Raised: $52M

Founded: 2004

Last Round: $20M

Total Raised: $25M

Founded: 2007




0% 1% 2% 3% 4% 5% 6% 7% 8%

2014

2013

Key Private Market Trends

Key Trend: Corporate Investment On the Rise

129119

69

100117

140159

190

0

50

100

150

200

2007 2008 2009 2010 2011 2012 2013 2014

(# of transactions)

$1

1.2

Ube

r($

3.0

)

$6.7$7.5

$4.4

$5.9

$7.8

$10.4

$6.7

$14.2

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

2007 2008 2009 2010 2011 2012 2013 2014

($ in billion)

Top Corporate Investors # of Transactions

Google 25

Intel 21

Sapphire Ventures (SAP) 14

salesforce.com 11

QUALCOMM 9

Cisco 7

Samsung 6

SoftBank 4

Comcast 4

Nokia 4

UMC Capital 4

Mitsui & Co. Global 3

Alibaba 3

DoCoMo 3

Tencent 3

GE 3

MasterCard 3

Juniper 3

Accenture 3

Corporate Investments Increased

Corporate Involvement Grew > 2x

25

Large corporates continued moving from business partner to investment partner. Trend should

continue in 2015 as tech corporate balance sheets remain strong




Most Active Corporate Investors By Technology Sub-Sector

Enterprise Application

Intel

salesforce.com

Google

Sapphire Ventures (SAP)

QUALCOMM

Cisco

Horizons Ventures Limited

Adobe

SoftBank

Comcast

Enterprise Infrastructure


Google

Samsung

Cisco

Intel

Telstra

NTT DoCoMo

United Microelectronics

QUALCOMM

salesforce.com

Consumer Internet

Google

Recruit Holdings

MGM Resorts International

Access Industries

Advanced Micro Devices

Amazon.com

Bertelsmann

IAC/InterActiveCorp

eCommerce

Tengelmann

Scripps Networks

Nokia

Bertelsmann

SoftBank

Comcast

MasterCard

Conde Nast

Rocket Internet AG

Difference Capital Financial

CRM/SFA

salesforce.com

Google

News Corporation

TripleFive

Adobe

Cisco

Intel

Samsung

Marketing Automation

SoftBank

WPP Digital

Adobe

Intel

Akamai Technologies

salesforce.com

Comcast

HCIT

QUALCOMM

Wellcome Trust

HCA

salesforce.com

CHV Capital

Google

Foundation Medical Partners

GE Ventures

HCM


Google

Recruit Holdings

26Note: Tech private placement include investments greater than $14.9M, including pending transactions. Tech IPOs are completed offerings greater than $14.9M. Public

markets include companies traded on all major North American exchanges and LSE AIM Market. Private markets include companies receiving investments with HQs in the

US, Canada, and developed Europe. Sources: Capital IQ, SEC Filings, Bulger Partners Analysis

Key Trend: Crossover Investors Expanded Presence

27

8%

9%

12%

17%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2011 2012 2013 2014

H M Total Crossover

17% of Minority Growth Equity Syndicates Now Include a Crossover Investor

Hedge Funds, Mutual Funds and Global Institutions Now Active in the Private Market

Hedge and mutual funds entered the private market more aggressively in 2014

Mutual funds primarily focused on pre-IPO rounds

Hedge fund investors appear to be seeking absolute return, joining syndicates for late-stage venture rounds

2015 activity from crossover buyers will depend upon successful IPO exits within current private portfolios

Percentage of Minority Growth Rounds That Included a Crossover Public Market Investor




The Largest Public Market Investors Have Entered Growth Equity

28

Name Brand Funds Are Investing Most Actives

T. Rowe Price was an early crossover investor

adding names such as Domo, Doximity, Houzz,

Dropbox, Eventbrite and Cloudera

Fidelity was more active in 2014 joining syndicates

for Pinterest, Pure Storage, Domo, Uber and

Hootsuite

Wellington assembled a broad private tech portfolio

including Lookout, New Relic, Apigee, DataLogix,

Veracode and Mozido

Wasatch and Firsthand Capital continued long

patterns of crossover investment in growth tech




Mutual Funds:

Hedge Funds:

A core set of hedge funds are frequent

investors in late-stage venture syndicates:

− Coatue − Passport

− ICONIQ − Dragoneer

− Valiant − Altimeter

Global Investors:

Sovereign funds such as Temasek increased

growth tech investment, as did global institutional

investors like Goldman Sachs

Tiger Global created a platform dedicated to

growth tech equity on a global scale

Key Trend: Increased Growth Investing Across Asia

26

32

23

59

0

10

20

30

40

50

60

70

2011 2012 2013 2014

$1.1

$3.7

$2.8

$5.5

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

2011 2012 2013 2014

Expansion of mobile broadband has created

significant interest in mobile commerce

platforms serving large consumer markets

Both capital committed and volume of

transactions have increased steadily over the

past four years

US firms such as Matrix, Sequoia and Tiger

Global are increasing activity

Corporate investors including JD.com, Alibaba

and Tencent are active in large growth

syndicates

Total Volume of Minority Growth Equity Transactions

Total Value of Minority Investments ($B)

Source: S&P Capital IQ, Bulger Partners Research Note: Tech private placement include investments greater than $14.9M, including pending transactions. Private markets include companies receiving investments with HQs in Hong Kong, Japan, Korea, Singapore, New Zealand, or India

Select Investments

$2,500M

Asian Markets Witnessing Growth

$680M

$330M

29

Capital Supply - 2014 GP Fundraising

$0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Tech Sector had Another Solid Year of Allocation from LPs

Tech Funds Capital Raised ($B) and # Funds

Investors Will Not be Constrained by Capital Supply

31

Effective Tech Growth Equity Overhang $262B

$261.8B

Pension fund and endowment investors have returned to alternative assets, like private equity, as the liquidity issues of

the 2008 financial crisis have subsided

Tech growth equity investors are losing the call rights on large 2007 and 2008 vintage funds, but they have performed well

enough post-crisis to attract significant new commitments in 2013 and 2014

Private company leaders should not consider private capital supply a limiting factor in funding growth or acquisition plans

– Capital is available for even large-scale ideas such as the 2013 Dell MBO

– Credit market remains open to increase buying capacity of equity capital base

$253

306

0

50

100

150

200

250

300

350

400

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

$500.0

2007 2008 2009 2010 2011 2012 2013 2014

Amount Raised Number of funds

Note: Funds included only funds that had historic interest in Media, Internet, Information Technology,, Telecommunications, or HCIT. Sources: S&P CapIQ, BP Analysis

Many Active Investors Have Fresh Capital to Deploy

32

$1,200M $1,500M $1,200M$1,475M

$5,775M $1,000M$2,230M$3,650M

Note: Funds examined were constrained to only funds that had expressed interest in Media, Internet, Information Technology,, Telecommunications, or HCIT Sources: S&P

CapIQ, BP Analysis

$1,700M $714M $565M$1,000M

90%

10%

Private Equity Venture Capital

50% 50%

Private Equity Venture Capital

85%

15%

Institutional Investors Are Committing Evenly to Venture and PE

Private Equity and Venture Capital Fund Volume

33

Private Equity and Venture Capital ($) Raised

45% 55%

2013 2014

2013 2014

Style Balance

The number of tech funds was evenly

split in 2014 between Private Equity

(152 Funds) and Venture Capital (154

Funds)

Capital raised was predictably skewed

towards Private Equity with 85%

($215B) vs Venture Capital’s 15%

($37B)

Expected Impact

The minority investment market is

coming into balance with multi-stage

venture raising $37B and investing

$37B

The control PE market has a larger

overhang with > $200B in new 2014

commitments and only $37B deployed

We expect the overhang to drive PE

firms to be aggressive in new platform

investments and to bid competitively

with corporate buyers for acquisitions

that expand these platformsTotal: $252.6BTotal: $262.7B

Total: 306Total: 263

Note: Funds included only funds that had expressed interest in Media, Internet, Information Technology,, Telecommunications, or HCIT Sources: S&P CapIQ, BP Analysis

Mike MacKeenManaging Director

Head of Private Capital Markets Group and Co-Head of

Investment Banking

Expertise

Capital formation for high-growth companies, venture capital and private equity investment, secondary direct

investments, business planning, diligence and strategy and presentation training. Deep experience across

media and technology sectors including consumer and enterprise application software, mobile applications,

network infrastructure, tech-enabled services and financial technology.

About Mike

Mike leads our investment banking activities with global leadership responsibility for Private Capital Markets.

Mike is one of the most active and experienced bankers in direct equity private placements for the technology,

media and telecommunications sectors. He has spent two decades focused exclusively on providing growth

capital for entrepreneurial companies. During this time Mike has provided growth companies with over

$1,000,000,000 in new equity capital. He maintains active relationships with leading growth equity, strategic

and family office investors around the world.

Mike has great enthusiasm for innovation and new products. He has helped entrepreneurs fund innovation at

market disrupting companies such as VistaPrint, Cardlytics, TopCoder, Nexidia and Tongal. Mike began his

career on the team that launched Hyundai Motor Corp in the US market. He is a co-author of a book on New

Product introductions where he wrote about the launch of MTV. Mike serves as a mentor and advisor to young

companies and a judge in business plan competitions.

Prior to joining Bulger Partners, Mike helped launch Revolution Partners which he helped build into a leading

investment bank serving middle market technology companies. Prior to Revolution, Mike was a key member of

the Robertson Stephens Private Capital Markets Group, which became the largest and most active private

placement group in the technology and healthcare industries.

Mike holds degrees from the McDonough School at Georgetown University and the Carroll School at Boston

College. He is also a Chartered Financial Analyst.

Mike MacKeen

CV Summary

Advisory Boards of wymsee, MyNetDiary & Phyre

Executive Committee - Boston College Technology Council

Revolution Partners, Group Head, Management Committee

Robertson Stephens, Private Capital Markets Group

BankBoston Corp, Media and Communications Group

Ford Motor Company, Zone Manager

Hyundai Motor America, District Manager

Chartered Financial Analyst

Georgetown University, McDonough School of Business, MBA

University of Oxford. Brasenose College, Executive Programon Globalization

Boston College, Carroll School of Management, BS

Representative Clients

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Documents

2015-Tech-Growth-Equity Outlook