PDF TECHNOLOGY SECTOR TREND REPORT - Advanced-HR

2014 Venture Capital Executive Compensation Survey

TECHNOLOGY SECTOR TREND REPORT

We are pleased to present the 2014 VC Executive Compensation Survey Trend Report for Technology Companies.

The 2014 VC Executive Compensation Survey was sponsored by the following Venture Firms:

Accel Partners Andreessen Horowitz August Capital Azure Capital Partners Balderton Capital Battery Ventures Bay Partners Bessemer Venture Partners Braemar Energy Ventures Canaan Partners Carmel Ventures Charles River Ventures Costanoa Venture Capital Crosslink Capital

Delphi Ventures Draper Fisher Jurvetson Emergence Capital Partners Fontinalis Partners Foundation Capital Foundry Group Greylock Partners Highland Capital Partners Hummer Winblad Ignition Partners Index Ventures InterWest Partners Jafco Ventures Khosla Ventures

Kleiner Perkins Caufield & Byers Lightspeed Venture Partners Mayfield Fund Menlo Ventures Morado Ventures Morgenthaler Ventures New Enterprise Associates Norwest Venture Partners Notion Capital OpenView Venture Partners Opus Capital Partners Polaris Partners Redpoint Ventures Scale Venture Partners

Sequoia Capital Shasta Ventures Sigma Partners Stripes Group LLC Third Rock Ventures Thomvest Ventures Trident Capital Trinity Ventures True Ventures US Venture Partners VantagePoint Capital Partners Venrock Versant Ventures

Through the efforts of sponsoring venture firms and Advanced-HR, Inc., survey data was collected from 899 private, venture backed technology companies between mid-August 2014 and mid-September 2014. Survey participation in 2014 increased 13% from the 797 companies in the 2013 technology sector survey.

This trend report was a collaborative undertaking between Advanced-HR, Inc. and PwC. It is intended to provide an overview of company metrics, company practices and changes in executive compensation from 2013 to 2014.

We wish to thank those whose efforts went into producing the 2014 VC Executive Compensation Survey Trend Report by providing data analysis, trend evaluation, and assessment of company practices.

This report utilizes data from Advanced-HR's Option Impact system. The information contained in this report may not be distributed, either in part or in whole, to any company or person not involved with efforts undertaken through the 2014 sponsoring venture firms or their participating portfolio companies. All data contained in this report is subject to copyright and may not be distributed to unauthorized users without written consent from Advanced-HR, Inc. or PwC.

2014 Venture Capital Executive Compensation Survey TECHNOLOGY SECTOR TREND REPORT

Survey Demographics

The survey of executive compensation in private, venture backed technology companies recorded data in effect at the time of reporting between mid-August 2014 and mid-September 2014. The survey was completed by 899 companies that submitted company metrics and compensation information for 5490 executives globally, an increase of +0.5% in surveyed executives compared with 2013.

The 2014 report provides compensation data for executives based on their founding status with categorization included for company, industry, region, stage, capital raised, funding round, revenue and number of employees. In addition, companies provided information about their total employee ownership as a percentage of the fully diluted shares.

Regions The 2014 regional breakdown for the United States shifted only slightly as a percentage of the survey population compared to survey data from 2013. The table below shows the regional distribution for the 2014 survey and the graph shows a comparative distribution between 2014 and 2013.

2014 Region Breakdown

United States SF Bay Area North East So. California Pacific NW Mountain Central/Midwest Mid-Atlantic South West South East No. Calif (Not SFBA)

Outside the US United Kingdom Europe Israel Other Countries

Count

466 130 47 30 30 28 22 20 17

3

45 27 14 20

% Total

51.8% 14.5% 5.2% 3.3% 3.3% 3.1% 2.4% 2.2% 1.9% 0.3%

5.0% 3.0% 1.6% 2.2%

The map below shows the states comprising each US geographic area in the 2014 survey.

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2014 Venture Capital Executive Compensation Survey TECHNOLOGY SECTOR TREND REPORT

Industries With guidance from our Advisory Board comprised of six of the participating venture firms, the 2014 survey industries were updated to reflect a more contemporary view of technology. The table and graph below show the distribution of the 2014 industry sectors. Comparison to the 2013 survey is omitted due to the industry changes.

2014 Industry Breakdown

Enterprise Consumer Hardware / Device Clean Tech Other Technology

Count 494 280 74 45

6

% Total 54.9% 31.1% 8.2% 5.0% 0.7%

Stage of Development The distribution of companies by stage of development was relatively constant from 2013 to 2014. The table below shows developmental distribution for the 2014 survey and the graph shows a comparative distribution between 2014 and 2013.

2014 Stage of Development Breakdown

Early/Product Definition Product Development Product in Beta Shipping Product Profitable

Count 85 45 56 589 124

% Total 9.5% 5.0% 6.2% 65.5% 13.8%

In 2014, Shipping Product as the largest developmental group has changed somewhat from the 2013 data in its division into two groups: 42% of the companies have revenues of $10M or less; and 58% of the companies have revenues of greater than $10M. In 2013, 52% of the companies had revenues of $10M or less.

Funding The survey distribution of companies by Funding Round in 2014 showed an overall increase of funding to earlier stage companies. In 2014 there was an increase of +66% in data submitted by "Seed Funding Only" through "Post Series A" companies when compared to the 2013 survey population.

The 2014 distribution of companies by Cumulative Capital Raised shifted in the amount of capital raised when compared to 2013 data. There was an increase of +15% in companies raising capital of >$0 - $10M with a corresponding drop in the companies with capital raised of between >$10M - $25M and >$25M - $50M.

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2014 Venture Capital Executive Compensation Survey TECHNOLOGY SECTOR TREND REPORT

The tables below show funding round and capital raised distribution for the 2014 survey and graphs show comparative distribution between 2014 and 2013.

2014 Funding Round

Count

Seed Funding Only

76

Post Series A

201

Post Series B

215

Post Series C

173

Post Series D

110

5+ Rounds of Funding

101

Growth Capital Only

23

% Total 8.5% 22.4% 23.9% 19.2% 12.2% 11.2% 2.6%

2014 Capital Raised ($M)

>$0-$10M

Count 230

>$10M-$25M

204

>$25M-$50M

206

>$50M-$75M

120

>$75M-$100M

49

>$100M

90

% Total 25.6% 22.7% 22.9% 13.3% 5.5% 10.0%

Revenue and Employees Survey distribution for revenue in 2014 was relatively unchanged from 2013. Similarly, the distribution for headcount groupings was relatively unchanged as well.

The tables below show revenue and headcount distribution for the 2014 survey and graphs show comparative distribution between 2014 and 2013.

2014 Revenue

2014 Headcount

Pre-Revenue >$0-$10M >$10M-$25M >$25M-$50M >$50M-$100M >$100M

Count 152 381 152 104 69 41

% Total 16.9% 42.4% 16.9% 11.6% 7.7% 4.6%

200

Count 61 161 193 198 153 133

% Total 6.8% 17.9% 21.5% 22.0% 17.0% 14.8%

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2014 Venture Capital Executive Compensation Survey TECHNOLOGY SECTOR TREND REPORT

Employee Ownership

The table below shows 2014 median (50th percentile) ownership as a percentage of company fully diluted shares by founder, investor and employee groups for five developmental cuts of survey data.

OWNERSHIP All Technology Industries Both Founding and Non-Founding CEOs

Pre-Revenue Companies Post Series A Post Series B

Companies with Revenue Shipping Product, Revenue ................
................

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