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21 st Century Version of “ 4 Horsemen” Required

32% No. 32% Not Sure. 36% Yes. 21 st 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?. * Source: DCM Analysis /Survey of Venture-Backed Companies, 2009 – Participants ( N) = 108.

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21 st Century Version of “ 4 Horsemen” Required

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  1. 32% No 32% Not Sure 36% Yes 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? * Source: DCM Analysis /Survey of Venture-Backed Companies, 2009 – Participants (N) = 108 DCM • Proprietary and Confidential

  2. Sarbanes-Oxley Corporate Governance Regulation Fair Disclosure(Reg FD) Listing Requirements of U.S. Stock Exchanges Other Emerging Company IPOs on International Exchanges: Additional New Liquidity Sources Top 3 Compliance Challenges to Going Public On U.S. Stock Exchanges # of Responses Answered as a Top 3 Issue (Participants =108) Global Venture-Backed IPOs* ** * Sources: Thomson Reuters, Venture Source, Zero2IPO, Venture Intelligence ** Includes VC- and PE-backed IPOs Source: DCM Analysis/Survey of Venture-Backed Companies, 2009 DCM • Proprietary and Confidential

  3. 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 Barriers to Going Public on U.S. Stock Exchanges 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 Current Regulation Has a Major Impact on How Emerging Companies Consider Their Exit Route Source: DCM Analysis/Survey of Venture-Backed Companies, 2009 DCM • Proprietary and Confidential

  4. Cost of Compliance Is Prohibitive for Small Companies Top 3 Compliance Challenges to Going Public onU.S. Stock Exchanges # of Responses Answered as a Top 3 Issue (Participants = 108) 102 Sarbanes-Oxley Corporate Governance 80 Regulation Fair Disclosure(Reg FD) 74 Listing Requirements of U.S. Stock Exchanges 62 6 Other Emerging Companies Need Right-Sized Compliance Requirements to Thrive Source: DCM Analysis/Survey of Venture-Backed Companies, 2009 DCM • Proprietary and Confidential

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