Financing for Growth: Private and Public Company Alternatives April 23 rd, 2014

1 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Financing for Growth: Private and Public Alternatives Introduction: Brendan Maher, Partner, TMT National Industry Leader, KPMG Moderator: Chris Chapman, National Leader, Growth Companies, KPMG Speakers: Dave Brennan, CFO/COO, Achievers, Toronto David Charron, CFO, Redknee, Toronto David Greenberg, Principal, JMI Equity, Baltimore Paul Sparkes, Executive Vice-Chairman, Difference Capital, Toronto Shari Mager, Managing Director, KPMG in the US, Silicon Valley

US Venture Capital Industry and IPO Trends Shari Mager

3 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. VC Deal flow Deal flow fell in 2013 but capital invested held steady at $34B. Source: PitchBook

4 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. VC Deals by stage The breakdown of deals by stage in 2013 was nearly identical to Source: PitchBook

5 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International VC Investors by deal stage ■500 Starups (131) ■Y Combinator (66) ■TechStars (66) ■SV Angel (33) ■Andreessen Horowitz (32) ■Google Ventures (27) ■Connecticut Innovations (25) ■High-Tech Grunderfonds (22) ■Lerer Ventures (21) ■Rothenberg Ventures (21) Most Active Early StageMost Active Seed/AngelMost Active Late Stage ■Andreessen Horowitz (49) ■500 Startups (47) ■Google Ventures (43) ■Accel Partners (42) ■Finnevera Venture Capital (42) ■First Round Capital (41) ■Connecticut Innovations (39) ■High-Tech Grunderfonds (36) ■New Enterprise Associates (36) ■Intel Capital (35) ■Sequoia Capital (40) ■Intel Capital (34) ■KPCB (32) ■Draper Fisher Jurvetson (26) ■New Enterprise Associates (23) ■Index Ventures (22) ■Accel Partners (21) ■Battery Ventures (20) ■Highland Capital Partners (20) ■Norwest Venture Partners (20) Source: Pitchbook 2013 Global PE & VC League Tables Investor Name (Number of Deals)

6 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. VC Deals by sector Non-software IT companies are seeing fewer deals as investors explore other sectors. Source: PitchBook

7 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. VC Exit flow Exit activity started slow in 2013 but gradually accelerated throughout the year. Source: PitchBook

8 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Exits (#) by type The proportion of IPOs nearly doubled in 2013, reaching the highest level since Source: PitchBook

9 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Monthly U.S. IPO Execution Includes closed-end funds Source: Ipreo 9 CONFIDENTIAL Permission granted from the New York Stock Exchange. CONFIDENTIAL IPO market records best year since 2004 New issuance activity in 2013 sprang back after nearly four years of subdued activity as 253 issuers debuted for a total of $75.9B in proceeds

10 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. U.S. IPO Execution by Industry – 2013 Deal Count 10 CONFIDENTIAL Permission granted from the New York Stock Exchange. CONFIDENTIAL Technology closes out 2013 in top spot Tech powered past their Healthcare brethren to finish first in number of deals for the year, repeating their 2012 feat Source: Ipreo

11 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Source: Ipreo IPO Performance by Industry – Offer/Current 2013 IPOs maintain healthy price performance *Deal Count 11 CONFIDENTIAL Permission granted from the New York Stock Exchange. CONFIDENTIAL The average IPO returned 41.4% after listing, a considerable improvement from 2012’s 24.2%

12 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Data excludes closed-end funds, equity unit offerings, and blank checks Source: Ipreo IPO performance remains healthy (continued) IPO Industry Pricing Statistics – CONFIDENTIAL Permission granted from the New York Stock Exchange. CONFIDENTIAL Individually, 26 IPOs have doubled since listing last year, while on the flip-side, 45 deals are now trading below their offer prices

13 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Smaller deals dominate pipeline activity IPO Backlog by Sector Source: Ipreo 13 CONFIDENTIAL Permission granted from the New York Stock Exchange. CONFIDENTIAL Healthcare pulled ahead in December and now leads on deal count as the sector accounted for half of December’s total filings to finish the year strong

14 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Scale and liquidity of recent IPO companies CompanyRevenueNet Income (loss)Cash Resources Monthly Operating Cash Flow Months of Cash Resources Barracuda Networks$57,790($2,175)$30,192$2,014N/A Chegg$61,587($24,904)$15,927$8,016N/A Fireeye$33,222($40,235)$54,085($2,117)25 Jive$20,819($7,580)$72,605($786)92 Marin Software$17,051($7,256)$31,540($1,591)20 Marketo$19,736($9,524)$36,176($1,635)22 Nimble Storage$33,411($10,136)$34,719($992)35 Palo Alto Networks$65,700$796$90,283$6,497N/A RingCentral$37,704($13,619)$19,366($2,060)9 Rocket Fuel$54,369($3,839)$21,985($437)50 ServiceNow$47,431($5,640)$95,484$5,360N/A Splunk$43,199($1,276)$31,599$1,218N/A Veeva$49,581$5,998$52,875$3,377N/A Violin Memory$26,505($30,648)$33,463($3,991)8 Workday$62,702($26,881)$122,651$2,439N/A Xoom$22,162($1,473)$70,202($63)1,114 YuMe$26,612($3,338)$26,834$103N/A Twitter$168,580($64,601)$320,075$--N/A Zulily$166,655($2,251)$120,633$3,249N/A $ in thousands

A Canadian Perspective Chris Chapman

16 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. +$500M EV $ M EV $ M Profile of Canadian Private Growth Companies Number of Companies & Estimated Enterprise Value +10 EV $20-50M EV $20-50M EV $50-150M EV $50-150M Source: Thompson Reuters, KPMG TMT Analysis SaaS, mobile, social media & e-commerce marketplace companies continued to be valued at high times revenue multiples. The IPO market on both sides of the boarder is positive but with very different dynamics and metrics. M&A activity remains very strong

17 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Current financing & liquidity environment Growth & private equity interest remains high Inbound interest from US growth and private equity investors remains high As do valuations for double digit reoccurring revenue growth Competition for startup and growth stage deals positive Cdn. & US co-investments increasing awareness of Canadian companies Strong US IPO & promising Canadian market Seed & venture capital alternatives encouraging US IPO market strong, but threshold is beyond most Cdn. firms TSX appearing viable option for the 1 st time in over a decade Public company costs, governance & post listing liquidity still a concern Seed investment activity is encouraging Series A venture limited & to post product, revenue firms Pre-IPO financing and secondary alternatives available but limited to very specific situations

18 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. SaaS companies have valuations more than double enterprise firms AND SaaS companies with +20% growth rate are double their lower growth rate peers High Growth Rates Really Matter SaaS companies should focus on getting MRR (monthly recurring revenue) growth rate above 10% while ‘enterprise evolvers’ should aim to show rapid growth in % of SaaS revenue Source: Martinwolf MW IT Index

Financing for Growth: Private and Public Company Alternatives April 23 rd, 2014

20 The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2014 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International. Growth and Valuation Relationship

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