Unique Insights on Venture & Picking Companies

JUNE 12, 2015 Aydin Senkut | @asenkut @felicisventures

Aydin Senkut | @asenkut @felicisventures 1

Our Evolution & Track Record

Aggregate Exit Value Up 3x, Exit Count Up ~2x with Every New Felicis Fund

Aydin Senkut | @asenkut @felicisventures 2

Venture Adages Are Meant To Be Broken

DEFINE YOUR “SANDBOX” (E.G. FINTECH FOCUS, SEED FUND, ENTERPRISE FUND)

STRICT OWNERSHIP TARGETS & BOARD SEATS

SILICON VALLEY IS THE ONLY FERTILE GROUND

Aydin Senkut | @asenkut @felicisventures 3

Our Founders Hail from a Vast Range of Countries & Backgrounds

Aydin Senkut | @asenkut @felicisventures

So Does Our Team: We Have Strong Immigrant / International DNA

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DIVERSITY IS A POINT OF STRENGTH FOR US, NOT AN AFTERTHOUGHT

Aydin Senkut | @asenkut @felicisventures 5

Our Model Is Not One-Size-Fits-All

Aydin Senkut | @asenkut @felicisventures 6

We Try to Pick Sectors Before Inflection Point / Mass VC Interest

Aydin Senkut | @asenkut @felicisventures 7

Our Sectoral Shifts Coincide with Major Changes in Markets

CURRENTLY FOCUSING MORE ON ENTERPRISE, FINTECH AND HEALTH

o  Fintech & Health[care] rising within Nasdaq to 7% & 17% (up from 4% & 7%) + both sectors are non-cyclical

o  Enterprise exits significantly up in last 3 years (M&A up 3x, IPO up 2x)

Top 50 VC-Backed Exits By Year, Consumer vs. Enterprise

Technology

Consumer Services

Healthcare

Financials Industrials Other

Nasdaq by Industry

Source: WSJ, April 23, 2015 Source: CB Insights, April 2015

Aydin Senkut | @asenkut @felicisventures 8

We Adapt Our Strategy to Perceived Market Shifts

FV I FV II FV III FV IV

Vintage 2006 2010 2012 2014

Pre Revenue Mix Pre-revenue (49%) Pre-revenue (49%) Pre-revenue (30%) Pre-revenue (34%)

Top Sectors Consumer Internet Mobile E-Commerce

Enterprise Fintech

Enterprise Health

Aydin Senkut | @asenkut @felicisventures 9

We Look For Global Winners, Not Local Heroes

Aydin Senkut | @asenkut @felicisventures 10

International Founders Capture Arbitrage Opportunities

INTERNATIONAL INVESTMENTS REPRESENT ROUGHLY 20% OF OUR FAIR MARKET VALUE

FIRST BIG FELICIS IPO IS CANADIAN

SIGNIFICANT LABOR COST DIFFERENCE DUE TO GOVERNMENT INCENTIVES IN COUNTRIES LIKE CANADA:

Source: AngelList

Aydin Senkut | @asenkut @felicisventures 11

Picking Winners is Hard, Especially When Valuations Change Drastically

Min – Max Range

Convertible Note 2.5x

Seed 6x

Series A 10x

Average Entry Valuation Range Across Early Stages, 2006-2015

Aydin Senkut | @asenkut @felicisventures 12

We Focus on Revenues, Less On Valuations

TO COMBAT HIGHER VALUATIONS COMPRESSING MULTIPLES, OPT FOR BETTER REVENUE GROWTH POTENTIAL

•  2010: 6 companies* with ~$10M+ annual revenues

•  2015: 9 companies* with ~$100M+ annual revenues; all 6 from 2010 have exited

* Across ALL Felicis Funds

Aydin Senkut | @asenkut @felicisventures

We Look For Great Companies Everywhere

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MORE THAN HALF (52%) OF OUR PORTFOLIO VALUE COMES FROM (18%) DEALS SOURCED OUTBOUND

Aydin Senkut | @asenkut @felicisventures 14

Remain Flexible & Adaptable

ORIGINALLY PLANNED TO INVEST ONLY IN SOFTWARE COMPANIES, BUT BREAKING THAT RULE PRODUCED SOME OF OUR BIGGEST HITS:

Highlights from Portfolio Companies Valued at $100M+

Aydin Senkut | @asenkut @felicisventures 16

Enterprise Leads, Though All Sectors Produced Winners

$100M+ $1B+

Connected Devices 3 1

Fintech 2 3

Mobile 2 -

E-Commerce 2 3

Health 2 -

Consumer Internet 6 1

Enterprise 11 1

Education 1 -

3D 1

Distribution of FV Winners by Sector & Valuation

Aydin Senkut | @asenkut @felicisventures 17

Seed Stage Investments Still Represent Roughly Half Our Winners

$100M+ $1B+

Seed 19 4

Early 6 4

Growth 5 1

Distribution of FV Winners by Stage & Valuation

Aydin Senkut | @asenkut @felicisventures 18

SF Bay Area Dominant Among Winners, but has NO Monopoly on Talent

$100M+ $1B+

SF Bay Area 23 6

Rest of US 5 1

International 1 2

Distribution of FV Winners by HQ Location & Valuation

Aydin Senkut | @asenkut @felicisventures 19

Our Winners Skew Towards 1st Time Founders

$100M+ $1B+

First Time 22 6

Repeat 8 3

Distribution of FV Winners by Founder Experience Level & Valuation

Aydin Senkut | @asenkut @felicisventures 20

Complete Teams Execute & Hire Better

$100M+ $1B+

1 7 -

2 14 5

3 6 2

4 3 2

Distribution of FV Winners by Number of Founders & Valuation

Aydin Senkut | @asenkut @felicisventures 21

Average Founder Age at Start 30, Youngest 21

$100M+ $1B+

Average 30 28

Youngest 21 22

Oldest 40 37

Distribution of FV Winners by Founder Age at Start & Valuation

Aydin Senkut | @asenkut @felicisventures 22

Building Winners Still Takes Time (Though It’s Accelerating)

$100M+ $1B+

Earliest Start 2003 2005

Most Recent Start 2013 2010

Among $1B+ Unicorns: Shopify IPO took 10 years from founding, ~5 years from 1st institutional round Wish took 5 years from founding to reach $1B+ valuation, 5 years from seed round

Distribution of FV Winners by Year Founded & Valuation

Aydin Senkut | @asenkut @felicisventures 23

What We Learned from Our Iconic Companies

FOUNDERS THAT CAN SUCCINCTLY ARTICULATE THEIR SUCCESS MUCH MORE LIKELY TO SUCCEED

•  Founders that can visualize (& articulate) success more likely to achieve it

•  Iconic Founders have a unique insight into what makes their products really awesome

•  Iconic Companies create their own Playbook

•  Iconic Companies execute in short bursts, test hypotheses with real data, fast