We are pleased to present the 2016 Executive Compensation ...

We are pleased to present the 2016 Executive Compensation Trend Report based on data collected from our 2016 VC Executive Compensation Survey. With the help of sponsoring venture firms, data was collected from 1568 private, venture-backed companies between midAugust and mid-September 2016.

Thank you to those whose efforts went into in the survey, helping to assure the data is of the highest quality in the industry. The 2016 VC Executive Compensation Survey was sponsored by the following venture firms:

2016 Executive Compensation Trends

In 2016, 1568 private company participants reported 8787 executive jobs, representing an increase of +19% in companies and +18% in jobs when compared to the 2015 survey.

PARTICIPANTS COMPANIES JOBS

2015 1320 7426

2016 1568 8787

+19% +18%

TECHNOLOGY 85.7% of total 1344 Companies

LIFE SCIENCES 14.3% of total 224 Companies

Participants provided data on cash and equity compensation as well as metrics including total capital raised, most recent funding round, estimated current annual revenue, estimated company value, stage of development and number of employees.

Survey Demographics

2016 Geographic Distribution

The SF Bay Area remained the largest region represented in the survey. The SF Bay Area represented 44.8% of the 2016 survey, a slight increase compared to the 42.8% representation in the 2015 survey.

SF BAY AREA 44.8% of total 702 Companies

NORTH EAST 18.9% of total 297 Companies

UNITED STATES REGIONS

SF BAY AREA NORTH EAST PACIFIC NW SO. CALIFORNIA CENTRAL/MIDWEST MID-ATLANTIC MOUNTAIN SOUTH WEST SOUTH EAST

COUNT

702 297 86 70 69 49 45 37 31

% TOTAL

44.8% 18.9% 5.5% 4.5% 4.4% 3.1% 2.9% 2.4% 2.0%

INTERNATIONAL COUNTRIES & REGIONS UNITED KINGDOM CANADA ISRAEL INDIA GERMANY FRANCE OTHER EUROPE APAC OTHER

COUNT

69 32 24 10 10 9 18 5 5

% TOTAL

4.4% 2.0% 1.5% 0.6% 0.6% 0.6% 1.2% 0.3% 0.3%

COPYRIGHT 2016, ADVANCED-HR. INC.

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Industry Sector Distribution

The 2016 industry distribution within the Technology and Life Science sectors was similar to the 2015 distribution. As shown in the table below, Enterprise continued to have the largest representation at 53.1%.

ENTERPRISE 53.1% of total 833 Companies

CONSUMER 24.7% of total 387 Companies

TECHNOLOGY SECTOR ENTERPRISE CONSUMER HARDWARE / DEVICE CLEAN TECH OTHER TECHNOLOGY

COUNT 833 387 101 22 1

% TOTAL 53.1% 24.7% 6.4% 1.4% 0.1%

LIFE SCIENCES SECTOR BIOTECH & PHARMACEUTICAL HEALTHCARE INFO TECH MED. DEVICE & DIAGNOSTIC HEALTHCARE SERVICES OTHER LIFE SCIENCE

COUNT 72 67 60 21 4

% TOTAL 4.6% 4.3% 3.8% 1.3% 0.3%

Funding Round

2016 survey participation by Funding Round was comparable to the survey distribution in 2015. There was a slight increase in post series A, B and C companies while companies with seed funding only decreased by 2.8 percentage points.

POST SERIES A 25.3% of total 397 Companies

POST SERIES B 21.5% of total 337 Companies

FUNDING ROUND SEED FUNDING ONLY POST SERIES A POST SERIES B POST SERIES C POST SERIESD 5+ ROUNDS OF FUNDING GROWTH CAPITAL ONLY

COUNT 267 397 337 245 140 163 19

% TOTAL 17.1% 25.3% 21.5% 15.6% 8.9% 10.4% 1.2%

Cumulative Capital Raised

COPYRIGHT 2016, ADVANCED-HR. INC.

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In 2016, the >$0 - $10M category was broken into two separate categories: >$0 - $3M to assist with understanding seed funding and >$3M - $10M. Cumulative Capital Raised categories were comparable to the survey distribution in 2015.

>$10M - $25M 20.1% of total 315 Companies

>$25M - $50M 19.9% of total 312 Companies

CAPITAL RAISED >$0-$3M >$3-$10M >$10M-$25M >$25M-$50M >$50M-$75M >$75M-$100M >$100M

COUNT 231 242 315 312 167 110 191

% TOTAL 14.7% 15.4% 20.1% 19.9% 10.7% 7.0% 12.2%

Estimated Annual Revenue for Current Fiscal Year

In 2016, the distribution increased for all categories except Pre-Revenue, which decreased by 16% and the >$25M $50M category, which decreased by 13%. Other categories increased roughly proportional to one another.

PRE-REVENUE 24.0% of total 376 Companies

>$0M - $10M 41.4% of total 649 Companies

ANNUAL REVENUE PRE-REVENUE >$0 - $10M >$10M-$25M >$25M-$50M >$50M-$100M >$100M

COUNT 376 649 220 148 108 67

% TOTAL 24.0% 41.4% 14.0% 9.4% 6.9% 4.3%

Number of Employees

All categories increased roughly proportional to survey growth over 2015 participation.

COPYRIGHT 2016, ADVANCED-HR. INC.

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10-25

26-50

51-100

18.3% of total 18.7% of total 17.9% of total

287 Companies 293 Companies 281 Companies

# OF EMPLOYEES 200

COUNT 238 287 293 281 242 227

% TOTAL 15.2% 18.3% 18.7% 17.9% 15.4% 14.5%

Revenue Rate per Employee

The data provided below is for median revenue per employee by revenue grouping. In 2016, the median revenue per employee increased from $340K per employee to $360K per employee for companies with estimated annual revenues of more than $100M.

EST. ANNUAL REVENUE GROUP >$0-$10M >$10M-$25M >$25M-$50M >$50M-$100M >$100M

COUNT

649 220 148 108 67

MEDIAN REVENUE PER EMPLOYEE ($M)

$ 0.08 $ 0.16 $ 0.19 $ 0.25 $ 0.36

COPYRIGHT 2016, ADVANCED-HR. INC.

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Stage of Development

Survey distribution by stage of development in 2016 was comparable to the 2015 distribution with shipping product having the largest number of participants.

SHIPPING PRODUCT 62.4% of total 979 Companies

STAGE OF DEVELOPMENT EARLY / PRODUCT DEFINITION PRODUCT DEVELOPMENT CLINICAL TRIALS PRODUCT IN BETA SHIPPING PRODUCT PROFITABLE

COUNT 218 72 47 97 979 155

% TOTAL 13.9% 4.6% 3.0% 6.2% 62.4% 9.9%

Estimated Company Value

Company value categories are structured to produce relatively even distribution between groupings in order to provide all customers with strong data sets. The largest category was split to show a greater than $500M category that will be used for further analysis in this report.

$50M - $100M 18.7% of total 293 Companies

COMPANY VALUE $50M-$100M >$100M-$200M >$200M-$500M >$500M

COUNT 374 363 293 242 203 93

% TOTAL 23.9% 23.2% 18.7% 15.4% 12.9% 5.9%

COPYRIGHT 2016, ADVANCED-HR. INC.

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Survey Population Overview

In 2016, companies reported 29% of the 8787 executive jobs as founders. As seen in previous years, founders varied dramatically by position with heavier populations in the C-level positions.

C-LEVEL

CHIEF EXECUTIVE OFFICER PRESIDENT (SEPARATE CEO) CHIEF BUSINESS OFFICER CHIEF OPERATING OFFICER CHIEF TECHNOLOGY OFFICER CHIEF MED. OFFICER, DIRECTOR CHIEF SCIENTIFIC OFFICER CHIEF FINANCIAL OFFICER CHIEF MARKETING OFFICER CHIEF PRODUCT OFFICER CHIEF REVENUE OFFICER CHIEF BUSINESS DEV. OFFICER CHIEF CUSTOMER OFFICER CHIEF ADMINISTRATIVE OFFICER CHIEF PEOPLE OFFICER CHIEF LEGAL OFFICER EXECUTIVE SCIENTIST/ARCHITECT GENERAL MANAGER C-LEVEL OTHER

COUNT

1540 122 27 364 860 55 64 515 249 240 177 22 38

7 43 37 92 130 56

% FOUNDER

75% 66% 26% 36% 63% 18% 47% 5% 10% 53% 10% 32% 24% 14% 0% 11% 51% 12% 57%

% NONFOUNDER

25% 34% 74% 64% 37% 82% 53% 95% 90% 48% 90% 68% 76% 86% 100% 89% 49% 88% 43%

VP-LEVEL

VP MANUFACTURING VP OPERATIONS VP ENGINEERING VP CLINICAL/REGULATORY VP RESEARCH VP FINANCE VP MARKETING VP PRODUCT VP SALES VP BUSINESS DEV. VP SERVICE AND SUPPORT VP ADMINISTRATION VP HUMAN RESOURCES VP LEGAL VP QUALITY VP CONSULTING OTHER VP

COUNT

48 244 722 52 132 273 421 475 633 351 245

8 194 174 15 40 122

% FOUNDER

6% 7% 13% 8% 14% 2% 3% 11% 2% 9% 5% 0% 0% 1% 7% 5% 12%

% NONFOUNDER

94% 93% 87% 92% 86% 98% 97% 89% 98% 91% 95% 100% 100% 99% 93% 95% 88%

Analysis of CEO Cash and Equity Compensation in 2016

The table below shows 2016 median cash and equity compensation for six developmental cuts of survey data. ? In earlier stage, pre-revenue companies (includes Seed Funding Only, Post Series A and Post Series B), founding

CEO base salary was an average of 48% less than non-founders, while equity holdings remained about 2.5 times higher. ? In companies with revenue (includes Shipping Product and Profitable), founding CEO based salary was an average of 24% less than their non-founding counterparts while equity holdings increased to about 2.75 times their nonfounding counterparts.

PRE-REVENUE COMPANIES

SEED FUNDING ONLY POST SERIES A POST SERIES B

FOUNDING CEO COMPENSATION

COUNT

MEDIAN BASE SALARY

MEDIAN TOTAL TARGET

PAY

MEDIAN TOTAL % EQUITY

HELD

206 $85,000 $90,000 32.1%

68 $150,000 $150,000 16.3%

25 $218,500 $250,000 12.2%

NON-FOUNDING CEO COMPENSATION

COUNT

MEDIAN BASE SALARY

MEDIAN TOTAL TARGET

PAY

MEDIAN TOTAL % EQUITY

HELD

2 $182,500 $182,500 14.0%

21 $334,750 $400,000 4.5%

17 $346,839 $464,897 5.0%

COMPANIES WITH REVENUE

SHIPPING PRODUCT, REVENUE ................
................

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