DCM • Proprietary and Confidential 1

21st Century Version of “4 Horsemen” Required

Would you consider a boutique I-bank to be the lead book runner for going public

on a U.S. stock exchange?

36%Yes36%Yes

32%No32%No

32%Not Sure32%Not Sure

Total Early stage

Mid stage

Late stage

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NoNot sureYes

* Source: DCM Analysis /Survey of Venture-Backed Companies, 2009 – Participants (N) = 108

Emerging Company IPOs on International Exchanges: Additional New Liquidity Sources

Global Venture-Backed IPOs*

* Sources: Thomson Reuters, Venture Source, Zero2IPO, Venture Intelligence** Includes VC- and PE-backed IPOs

Top 3 Compliance Challenges to Going PublicOn U.S. Stock Exchanges

# of Responses Answered as a Top 3 Issue(Participants =108)

6

62

74

80

102Sarbanes-Oxley

Corporate Governance

Regulation Fair Disclosure(Reg FD)

Listing Requirements of U.S. Stock Exchanges

Other

Source: DCM Analysis/Survey of Venture-Backed Companies, 2009

2007 2008

86

6

2007 2008

455

2007 2008

94

35

2006 2007

3 2

**

DCM • Proprietary and Confidential 2

Preferred Exit Route

Likely Exit Route

46%

19%

54%

81%

15

15

33

53

58

74

76

Exit Route Preferenceand Expectation

(n=108)

Top 3 Barriers to Going Public# of Responses Answered as a Top 3 Issue

(Participants = 108)

M&A

IPO

Compliance Requirements (Sarbanes-Oxley, Audit, Governance)

Increased Volatility in the Public Markets

M&A Better Alternative (Faster Process, More Liquidity)

Investment-Banking Related Issues (Analyst Coverage, Requires High Rev Threshold)

Transaction Costs of Going Public (Legal, Banker Fees, Non-Compliance Related Costs)

Higher Perceived Litigation Risk from U.S. Investor Base

Other

Source: DCM Analysis/Survey of Venture-Backed Companies, 2009

Current Regulation Has a Major Impact on How Emerging Companies Consider Their Exit Route

Barriers to Going Public on U.S. Stock Exchanges

DCM • Proprietary and Confidential 3

Top 3 Compliance Challenges to Going Public onU.S. Stock Exchanges

# of Responses Answered as a Top 3 Issue(Participants = 108)

Sarbanes-Oxley

Corporate Governance

Regulation Fair Disclosure(Reg FD)

Listing Requirements of U.S. Stock Exchanges

Other

Source: DCM Analysis/Survey of Venture-Backed Companies, 2009

Emerging Companies Need Right-Sized Compliance Requirements to Thrive

102

80

74

62

6

Cost of Compliance Is Prohibitive for

Small Companies

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