Advent International GLOBAL VENTURE CAPITAL Valuation: What’s My Company Really Worth? January 18, 2001

Advent International GLOBAL VENTURE CAPITAL Acme Technologies, Inc. High tech company High growth 88%/year Will need $33 million before going public Expects to IPO in 5 years High tech company High growth 88%/year Will need $33 million before going public Expects to IPO in 5 years

Advent International GLOBAL VENTURE CAPITAL Acme Technologies: Forecast ($MM)Yr 1Yr 2Yr 3Yr 4Yr 5 Revenues Gross Margin (50%) Op Expenses (g=30%/year) (5)(8)(10)(13)(17) Net Income(5)(6)(4)08

Advent International GLOBAL VENTURE CAPITAL Acme Technologies, Inc. What’s the future valuation? Year 5 net income = $8MM P/E=15x Market capitalization year 5 = $120MM Needs to be discounted back to account for risk DiscountValuation Yr 1: guy & idea65% $10MM Yr 2: team & prototype50%$24MM Yr 3: building revenues35%$49MM Yr 4: building markets25%$77MM What’s the future valuation? Year 5 net income = $8MM P/E=15x Market capitalization year 5 = $120MM Needs to be discounted back to account for risk DiscountValuation Yr 1: guy & idea65% $10MM Yr 2: team & prototype50%$24MM Yr 3: building revenues35%$49MM Yr 4: building markets25%$77MM

Advent International GLOBAL VENTURE CAPITAL Acme Technologies: Rounds ($MM)Yr 1Yr 2Yr 3Yr 4Yr 5 Discount rate65%50%35%25%0% Discounted Valuation Funding Need5810 Pre-Financing Valuation Dilution50%33%20%13%

Advent International GLOBAL VENTURE CAPITAL Acme Technologies: Ownership ($MM)Yr 1Yr 2Yr 3Yr 4Yr 5 Discounted Valn # of Shares (MM) Share Price$1.00$1.80$3.00$4.28 Ownership: Capital 50%66%73%77% Ownership: Fdrs/Mgmt/Emp 50%34%27%23%

Advent International GLOBAL VENTURE CAPITAL Acme Technologies: Going Public ($MM)Yr 1Yr 2Yr 3Yr 4IPO Discount rate65%50%35%25% Discounted Valuation Funding Need Pre-Financing Valuation Dilution50%33%20%13%20%

Advent International GLOBAL VENTURE CAPITAL Acme Technologies:Going Public ($MM)Yr 1Yr 2Yr 3Yr 4IPO Discounted Valn # of Shares (MM) Share Price$1.00$1.80$3.00$4.28$6.52 Ownership: Capital 50%66%73%77%82% Ownership: Fdrs/Mgmt/Emp 50%34%27%23%18%

Advent International GLOBAL VENTURE CAPITAL How Did You Do? ($MM) At IPO % Own WorthInv. GainMultiple Fdrs/Mgmt/Emp18%280 Capital Round 118% x Capital Round 218% x Capital Round 314% x Capital Round 410% x

Advent International GLOBAL VENTURE CAPITAL Valuation Factors Performance of the company – ahead or behind plan Perceived risks going forward –Product risk –Market risk –Management risk Rank in industry – 1 st mover or nth player? Public comparables Management track record Competition for deal Capital intensity Performance of the company – ahead or behind plan Perceived risks going forward –Product risk –Market risk –Management risk Rank in industry – 1 st mover or nth player? Public comparables Management track record Competition for deal Capital intensity

Advent International GLOBAL VENTURE CAPITAL Merger & Acquisitions Issues Comparable transactions – financial twin Synergy (cost reduction/rationalization) Competitive landscape Competition for the company Alternatives (sell or go-it-alone) Wall Street View Comparable transactions – financial twin Synergy (cost reduction/rationalization) Competitive landscape Competition for the company Alternatives (sell or go-it-alone) Wall Street View

Advent International GLOBAL VENTURE CAPITAL Advent International Overview 17 Offices in 16 countries 100 investment professionals Founded 1984 $4.0 billion under management Venture offices Advent offices Boston Worldwide HQ London Israel Gemini affiliate Menlo Park

Advent International GLOBAL VENTURE CAPITAL Venture Capital Target Sectors Service Providers Broadband Infrastructure Mobile Applications and Services Network Software and Support E-Commerce / E-Business Content Web-enabled Enterprise Applications Hosting/ASP’s Mobile Commerce And Services All Optical Networks Internet Appliances XML-based Applications CommunicationsInternet Next-Generation Technologies