Presentation to Vancouver TIE meeting. I moderated a panel on funding Internet Media at all stages of growth. I (Brent Holliday) was the moderator and the panel included Ziplocal's Olivier Vincent, W Media Partner's Boris Wertz and Hootsuite's Ryan Holmes.

1. Internet Media Funding
Presentation to TIE Vancouver
February 23rd, 2011
Prepared by:
Brent Holliday, Partner
Capital West Partners
brent@capwest.com

2. Internet Media Funding
Where would you be putting
your money if you were an
investor?
Public markets don’t have any
social media companies to
choose from yet...
Page 1

3. Internet Media Funding
North America Information Technology M&A
Announced M&A values Average EV/LTM Revenue
show a nice rebound, but 2
1.9
look at the Y axis... 1.8
1.7
1.6
High growth Internet Media 1.5 LBO
properties are selling in the 7- 1.4 Strategic
1.3
10x trailing revenue in the past
1.2
4 months. 1.1
1
2008 2009 2010
North America Internet Media M&A
Average EV/LTM Revenue
4.5
4
3.5
3
LBO
2.5
Strategic
2
1.5
1
2008 2009 2010
Page 2

4. Internet Media Funding
Venture Investing
Silicon Valley VCs are more
optimistic today about their
investments that at any time
since 2007 (Silicon Valley VC
Confidence Index at 3.75 out of 5,
January 2011)
Quarterly VC Investment and Deal Volume Trend
Q1 '09 to Q4 '10
730 715 735
678 687
613 612
$6.5
483 $6.1 $5.9 $5.9
$5.3 $5.5 $5.4
$3.9
Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10
Funding ($B) # of Deals
www.cbinsights.com
Page 3

5. Internet Media Funding
The hottest sector in VC is
Internet related...
Internet VC Investment and Deal Volume Trend
Last Five Quarters
272
224 233 233
221
$2,543
$1,618
$1,483
$1,265 $1,253
Q4'09 Q1'10 Q2'10 Q3'10 Q4'10
$ Funding # of Deals
www.cbinsights.com
Page 4

6. Internet Media Funding
The VCs are attracted to
the earliest stages,
including Seed, typically
where angels play...
Share of Internet VC by Series - Number of Deals
Last Five Quarters
4% 6% 1% 4%
6% 7%
8% 6% 5% 5%
13% 18% 15%
17% 19%
23% 20%
27% 18%
28%
40% 42% 38%
38% 33%
11% 11% 12% 13% 13%
Q4'09 Q1'10 Q2'10 Q3'10 Q4'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
Page 5

7. Internet Media Funding
But the biggest jump was in
the later stage Internet
Media deals...
Internet Median Deal Size by Quarter
($ Million)
$20.0
$19.0
$9.0
$7.0
$2.4
$0.6
Seed Series A Series B Series C Series D Series E +
Q4'09 Q1'10 Q2'10 Q3'10 Q4'10
www.cbinsights.com
Page 6

8. Internet Media Funding
Later stage funds, aka
Private Equity, have a
supply problem...
$160 $159.12 $485 $500
Global Private Equity – Capital Raised and Cumulative
Overhang of Un-Invested Funds
$450
$140
$400
$120 $111.67 $114.57
$350
$100
$300
$80 $250
$200
$60
$39.94 $150
$40
$29.17 $100
$20.33
$20
$7.97 $50
$2.56
$0 $0
2003 2004 2005 2006 2007 2008 2009 2010
$ in Billion As of 10/31/2010
Cumulative Overhang Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B $5B+
Source: PitchBook
Page 7

9. Internet Media Funding
So they are pouring more
money into more deals from
growth investing to
buyouts...
Average Deal Value -
IT Private Placements (closed)
without Facebook
25.00
19.75
20.00
15.00 13.26
11.06
10.00
5.00
-
Q2 2010 Q3 2010 Q4 2010
Page 8

10. Internet Media Funding
Rather than IPO today, the
biggest Internet media
companies are taking
private equity...
Presumably solving
everyone’s immediate
problem:
Liquidity
Cash for acquisitions
No red tape
Page 9

11. Internet Media Funding
Today’s Panel
We will discuss the gamut
of financing:
Angel/Seed financing for
Internet Media companies
VC financing for Internet
Media companies
Private Equity financing and
buyouts for Internet Media
companies
Page 10

12. Internet Media Funding
Agenda
Each speaker introduces
their company and the
stage and experience in
Internet Media investing
A few questions from Brent
Audience asks questions
Page 11

13. Mary Meeker (Kleiner, Perkins, Caufield and Byers) Slides
http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011
Page 12

14. Mary Meeker (Kleiner, Perkins, Caufield and Byers) Slides
http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011
Page 13

15. Mary Meeker (Kleiner, Perkins, Caufield and Byers) Slides
http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011
Page 14