What's the right funding option for your Salesforce biz? Watch this webinar and hear directly from investors at Emergence Capital & Lighter Capital. Learn which funding options best suit each stage of the business growth cycle - from startup through the $10M revenue milestone - and what to consider when evaluating those options for your business.

1. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Which funding option is
right for your business?
Financing options for Salesforce Partners
June 5, 2014

2. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Emergence Capital Partners
Leading early stage Silicon Valley VC in SaaS and cloud-based services
› 100% focused on cloud software for business users, including software-as-a-
service “SaaS,” mobile and information services.
› $575 million under management across 3 funds
Building market leaders
Our first investment. (market cap today: $32 billion)
SuccessFactors- IPO in 2007, acquired by SAP for $3.4 billion
Yammer – acquired by Microsoft for $1.2 billion
EchoSign – purchased by Adobe
Veeva – IPO (VEEV) in October 2013 (market cap today: $3
billion)
And Box, Lithium, InsideView, Hightail, Intacct, ServiceMax,
Doximity, Insightly, SteelBrick and many more.
p2

3. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Sean Jacobsohn
Venture Partner at Emergence Capital Partners
Cornerstone OnDemand (VP Channel Management)
Joined at $7M revenue, now $300M revenue & $2B public
company
WageWorks (VP Sales & Partner Development)
Joined at $3M revenue, now $250M revenue & $1.5B public
company
Elance (merged with oDesk)
Joined at $0 revenue, now $100M revenue
Hightail (VP Worldwide Alliances)
Emergence Capital portfolio company formerly known as
YouSendIt
Emergence Joined as Venture Partner
Sourcing business cloud startups for $250M fund. Works
closely with portfolio companies Navera, Intacct, InsideView
15 years in
business cloud
Sean Jacobsohn
Venture Partner,
Emergence Capital
Partners
p3

4. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Lighter Capital
› Lends $50K-$1M in growth capital
› Entrepreneur-friendly structure
called a “RevenueLoan™” –
revenue-based finance
› Tech-enabled analysis, diligence,
underwriting and servicing. Goal:
make funding fast and easy.
› Currently funding 3-4 total
companies per month, including 1
Salesforce Partner per month
p4
Examples of Salesforce
Partners funded

5. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
BJ Lackland
CEO at Lighter Capital
BJ Lackland
CEO,
Lighter Capital
Lighter Capital CEO in 2012
Power Efficiency Corporation CFO & Director
Small public energy efficiency technology company,
raised $20M in equity financing, $5M in various debt
financings
Summit Energy Ventures VP & Director (Partner)
$25M venture capital fund focused on Series A & B
rounds, PIPEs, convertible debt
Other Active angel investor and consultant to erarly
stage companies. Senior finance and marketing
leader at tech startups, EnCompass Globalization
and webStrategic.
p5
15 years financing early
stage tech companies,
either as an
entrepreneur or investor.
Over $50M raised or
invested

6. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Today’s agenda: Funding options for various
“startup” stages of the business lifecycle
Funding options for Salesforce Partners
More on Venture Capital – Sean Jacobsohn
More on RevenueLoans– BJ Lackland
Q&A
p6

7. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Funding Options
Which funding option
is right for your business?

8. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Number of Financings
Source: US Census Bureau, Crunchbase, CB Insights
~6 Million US Business
90% of whom have
20 or fewer employees
127,100 small software companies
2,283 Angel and Seed Investments
Seed / Angel = 1.8%
of small software companies per year
1,009 Series A Investments
Series A = 0.8%
of small software companies per year
p8

9. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
A snapshot of funding options by stage
EstablishedIdeation Launch &
Traction
Growth &
Scale
Breakout
Bootstrap/Self
Family & Friends
Angels and Incubators
Revenue-Based Financing
VC (less pre-product/revenue than in the past, more at later stages)
Banks (w/o VC investor)
Strategic Investors
Note: These are tendencies, NOT hard and fast rules. Many financings happen outside these bands!
$MMs$0 $0-$1M $1M-$5M $5M+
p9

10. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Different companies require different ‘financing roadmaps’
What type of business are you building?
› Long term goals, strategy and business
model drive financing decisions
› Different ‘financing roadmaps’ available,
depending on the business
› Key questions:
› How much capital is required for the
business to succeed?
› What’s the revenue / cash flow /
profitability profile you can attain?
› What is your ultimate goal for the biz?
p10

11. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Venture Capital
Which funding option
is right for your business?

12. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
VC
Math
Investment Total Value
› 3 Total Loss $ 15 $ 0
› 3 Return Investment (1x) $ 15 $ 15
› 3 Sell for profit (4x) $ 15 $ 60
› 1 Home run (10x) $ 5 $ 50
$50 $ 125
Typical Results – 10 Investments
We are wrong
60% of the time!
p12

13. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Companies
› 1200 review materials
› 500 face-to-face 40%
› 50 due diligence x 10%
› 10 investments x 20%
< 1.0%
Typical Pipeline for 10 investments
VC
Math
p13

14. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014 p14

15. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Examples of 1200 Leads
Not competitive with any
portfolio company
Not leveraging a connection for
an introduction
Compelling concise elevator
pitch
Not reading our firm’s website to
see our focus area
Strong founder Not looking at my LinkedIn bio;
call me wrong name
p15

16. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Examples of 500 Meetings
Demonstrated product/ market
fit; outside testing phase
Solves an important problem
outside Silicon Valley
Well versed on
market/competition
Don’t know actual numbers or
metrics well
Not sure how to get to $1M, but
expect $50M in 5 years
Not strong technical team
p16

17. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Examples of 50 Due Diligence
2-3X annual growth in revenue
Positive customer references
Positive team references
High churn
Not met projections from
prior meeting
Concentration of
customer base
p17

18. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Examples of 10 Investments
Efficient customer acquisition
Strong team, where people
followed CEO
Strategic to VC Portfolio
Market size ($300M vs. $1B)
Burn rate (need to
raise too soon)
Valuation too high
p18

19. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Revenue Loans
Which funding option
is right for your business?

20. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
What are RevenueLoans™?
p20
Up to $1M or up to 33% of annualized revenue run rate
› No set interest rate, payment, or maturity
› Monthly payments are a fixed percent of net cash receipts
› Matures in 5 years or when cumulative payments equal a set
amount, usually 1.5 – 2.5x principal
› Small upside participation
Example Loan
› Annual Revenues: $1M
› Principal: $200K
› Maturity: 5 years
› Payment: 5% of monthly revenue
› Repayment: 1.75x principal ($350K)
› Upside Participation: $50K at liquidity event
CumulativePayments
Principal
Loan
Maturity
1.5x
to
2.5x
Principal

21. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
How Does it Work?
p21
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Period
Loan payments are based on a percent of
the company’s revenue.
Company revenue
Loan payment

22. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Early growth stage technology companies
Lighter Capital’s Investment Criteria
Financials:
› Revenue Min: $15k+ / month
› Gross Margin: High (50%+)
› Profitability: Not required, but
clear path to profitability from our funds
› Other Debt: Not too high (unless
convertible debt)
› Customer Base: No major concentration
› Recurring Revenue or Repeat Customers
Management:
› High ownership, full time dedication
Geography:
› HQ in US or Canada
Use of Funds:
› Growth: Sales, marketing, product
p22
Software, SaaS, digital media, tech services and similar

23. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Lighter Capital’s Funding Process
Get funded in as little a four weeks
p23
Result: We fund 18% of companies that meet our criteria
Company
snapshot
Create a high level
company overview online
in 10 minutes.
Getting
the details
We will send you a link
to upload and provide financial
statements, customer and
team information followed by
one or two calls with our
underwriting team.
Closing
the deal
We issue a Term Sheet
for review. Once agreed,
you are funded
STEP 1 STEP 2 STEP 3

24. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Summary: How Do They Compare?
Bank / Debt
Revenue-Based
Finance
Venture
Capital
Guarantees &
Controls
Financial Covenants
Sometimes Personal
Guarantees
No Financial Covenants
No Personal Guarantees
Partner in the Business
(Board Seat, voting
shareholder)
Added Value Low / None Medium High
Dilution None / Low
Low: Small Upside
Participation
High
Payment
Flexibility
Low: Fixed Payments Medium: Variable Payments High: No Payments
Speed 4-8 months 4 weeks
Highly variable. Typical
3-6 months focused
effort
p24

25. EMERGENCE CAPITAL PARTNERS & LIGHTER CAPITAL WEBINAR © COPYRIGHT 2014
Thanks!
Fundraising Resources for Salesforce ISV, OEM & SI Partners
www.lightercapital.com/salesforce
Apply Online for a RevenueLoan from Lighter Capital
secure.lightercapital.com/apply