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Sentiments of Pre- and Post IPO CEOs Regarding the US IPO Market

IPO Task Force Survey Results


August 2011

Source: IPO Task Force August 2011 CEO Survey

Confidential

Pre & Post IPO CEO Survey: Objectives & Methodology

Objective: To gather the perspective of pre-IPO and Post-IPO CEOs regarding their top concerns, largest hurdles, and the greatest benefits of going public Methodology: Survey distributed to pre- and post-IPO companies through the membership of the National Venture Capital Association (NVCA) and by NASDAQ (listed companies that went public since 2006). Responses were collected anonymously during a three week period in August 2011

Source: IPO Task Force August 2011 CEO Survey

Confidential

Post-IPO CEO Survey Responses

Source: IPO Task Force August 2011 CEO Survey

Confidential

PostIPO CEOs: Survey Respondents 35 Public Company CEOs (IPO 2006 or later) Industry Sector: 57% IT 29% Life Sciences 9% Non-High Technology

Average Employment in 2011 = 828 Average job growth since IPO = 86%

Source: IPO Task Force August 2011 CEO Survey

Confidential

Public Company CEOs: IPOs Are Important But Increasingly Difficult


Agree Strong & Accessible IPO Market Is Important to U.S. Economy & Global Competitiveness U.S. IPO Market Is Accessible for Small Companies It Is Not as Attractive an Option to Go Public Today as It Was in 1995 Going Public Was a Relatively Painless Experience Going Public Has Been a Positive Event in My Company's History 100% Neutral 0% Disagree 0%

23%

11%

66%

86%

3%

12%

17%

14%

69%

83%

14%

3%

Value of IPO: 86% Growth In Employees


Source: IPO Task Force August 2011 CEO Survey Confidential

Why Post IPO Companies Went Public

Strengthen balance sheet

89%

Access to growth capital

83%

Fortify brand/credibility with customers

63%

Provide currency for acquisitions

60%

Source: IPO Task Force August 2011 CEO Survey

Confidential

Post IPO CEOs Biggest Concerns About Going Public

Accounting & compliance costs Post IPO liquidity SOX & other regulatory risks Public disclosure impact on business Meeting quarterly performance expectations Managing public company communications restrictions

86% 83% 80% 72% 66% 60%

Source: IPO Task Force August 2011 CEO Survey

Confidential

Public Company CEOs Most Significant IPO Challenges

Administrative Burden of Public Reporting Reallocation of CEO's Time to Reporting/Compliance vs. Co. Building Administrative Burden of Regulatory Compliance Managing Public Company Communications Restrictions

92% 91% 89% 88%

Managing IPO Costs and Compliance Was Challenging

Source: IPO Task Force August 2011 CEO Survey

Confidential

Post IPO CEOs: Costs of Going and Staying Public Are High
Average Cost $2.5M to Go Public Annual Cost $1.5M to Stay Public
$3-4M 6% <$1M 14% $1-2M 35% $3-4M 20%

<$1M 0% >$4M 14%

>$4M 3%

$2-3M 31%

$2-3M 31%

$1-2M 46%

Costs Including SOX, Legal, Accounting


Source: IPO Task Force CEO Survey August 2011. of incremental costs of an IPO. Sample set consists of 35 CEOs of companies that went public since 2006; Consistent With Independent Review of Public Filings for 47 2011 IPOs Raising Less Than $200M (Avg. Cost of $3M for IPO)
Source: IPO Task Force August 2011 CEO Survey Confidential 9

Pre-IPO CEO Survey Responses

Source: IPO Task Force August 2011 CEO Survey

Confidential

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Pre-IPO CEOs: Survey Respondents


109 CEOs of venture-backed companies considering an IPO in the next 24 months. Average Employment: 168 Industry Sector Breakdown: 42% IT 11% Cleantech 42% Lifesciences 1% Non-High Technology

Source: IPO Task Force August 2011 CEO Survey

Confidential

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Pre-IPO CEOs Target IPOs To Finance Growth


Motivation for Pre-IPO Companies

Cash to Support Future Growth

63%

Competitive Advantage from Being Public

84%

Premium Valuation from Being Public

61%

Source: IPO Task Force CEO Survey August 2011.


Source: IPO Task Force August 2011 CEO Survey Confidential 12

Pre-IPO CEO Sentiments Regarding U.S. IPO Market

Agree

Neutral

Disagree

Strong & accessible small cap IPO market is critical to maintain U.S. competitiveness

94%

6%

0%

Currently, the U.S. IPO market is easily accessible for small cap companies

9%

11%

79%

It is not as attractive an option to go public today as it was in 1995

85%

7%

8%

Source: IPO Task Force August 2011 CEO Survey

Confidential

13

Pre-IPO CEOs Concerns Regarding Implications of Going Public

Size and vibrancy of small cap public buyer universe Breadth & consistency of research coverage Costs and risks of SOX and other accounting and compliance requirements

88%

81%

80%

Lack of long term holders of IPO stock

77%

Managing Public Company Communications Restrictions

71%

Source: IPO Task Force August 2011 CEO Survey

Confidential

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Sentiments of Pre- and Post IPO CEOs Regarding the US IPO Market
IPO Task Force Survey Results
August 2011

Source: IPO Task Force August 2011 CEO Survey

Confidential

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