This presentation was delivered at the first ever Local Search Association SMB Cloud Summit in San Francisco 12.7.17. For more visit: http://bit.ly/2nGhO8s

1. T h e C l i m a t e f o r
S m a l l B u s i n e s s
S a a s

2. Private & Confidential | 2
Introduction01
02
03 Lessons and Takeaways
2017 SMB SaaS Deal Landscape
A g e n d a

3. M A R K M A C L E O D
Founder & President
Surepath capital partners
Mark has over 18 years of industry experience with 14 years as CFO for leading companies such as FreshBooks, Shopify,
Tungle and more. He spent 3 years at Real Ventures, Canada’s most active seed stage venture fund, where he was a
founding Partner.
Mark has raised hundreds of millions in capital from investors in Canada, the US and Asia and has sold companies to Airbnb,
Blackberry, Rackable Systems, Return Path and others.
I n t r o d u c t i o n
3

4. To help fund, grow, and exit SMB software companies
SurePath maximizes your optionality:
We make sure you know what it takes to build a market leader and capitalize you towards that
goal.
We ensure you are always in the minds of strategic buyers so that if they decide to make a move
in your space, you are in the conversation. You can then decide; Keep going or exit?
The process of raising growth capital is very different from raising early stage capital
It is cheaper than ever to start companies, but more expensive than ever to build market leaders. If that’s your
aspiration, you need growth capital
We help you prepare for growth stage and help you raise the capital needed to become a market leader
Growth
Funding
We have sat on both sides of the table. We have funded, grown and exited many companies
We remain in touch with our clients between transactions to provide ongoing advice and intros.
A low touch, high impact way to help you grow
Strategic
Guidance
There are few credible choices for advisors to facilitate sub $100M exits. We fill that gap
We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit
No other investment banking firm has the depth of our relationships in the SMB world
Exits
4
S u r e P a t h : O u r P u r p o s e

5. We have been part of some the most successful SMB SaaS companies
We have deep relationships with SMB investors and buyers
SurePath is committed to becoming the leading strategic financial advisor to the global SMB software market
5
S u r e P a t h a n d S M B

6. The SurePath SMB SaaS index is the only
index that is exclusively focused on SaaS
companies with SMB offerings.
It is a basket of 35 public companies is
actively tracked by the SurePath team.
We know executives at almost every
company on our index.
Extending our SMB SaaS thought leadership to the public markets
T h e S u r e P a t h S M B S a a S I n d e x
6

7. served as advisor to
7
R e c e n t D e a l s

8. SMB SaaS Deal Landscape

9. M e t h o d o l o g y
9
Since Jan. 1, 2017, there were over 3,000 deals in the
B2B software space, globally
Of those, there were a total of 1,934
deals in North America
Of those, a total of 309 deals
(291 raises and 18 exits)
involved companies with a
clear SMB SaaS offering

10. 2 0 1 7 D e a l L a n d s c a p e
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, and crowdfunding and deals with undisclosed values
10
$2M $2M
$11M
$26M
$95M
$79M
$85M
43
85
108
54
2
11
5
$0M
$10M
$20M
$30M
$40M
$50M
$60M
$70M
$80M
$90M
$100M
Angel Seed Early Stage VC Late Stage VC IPO M&A Private Equity
AverageDealSize(in$USD)
Average Financing Size Deal Count

11. Applications
27%
Platforms
27%
HR and Training
11%
Productivity
8%
Other
7%
Design
6%
Database
4%
Automation and Workflow
3%
Information Services
2%
Vertical Specific
2%
Communications
2% Finance
1%
D e a l b y C a t e g o r y

12. Q u a r t e r l y F u n d i n g i n 2 0 1 7
12
$24M $27M $10M $5M
$54M $50M $48M $12M
$346M $350M
$302M
$137M
$200M
$394M
$504M
$342M
$0M
$50M
$100M
$150M
$200M
$250M
$300M
$350M
$400M
$450M
$500M
$550M
Q1 Q2 Q3 Q4
CumulativeAmountRaised(in$USD)
Angel Seed Early Stage VC Late Stage VC
14 11
12 6
28 31 21
5
31 34
34
9
14
16
17
8
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, and crowdfunding and deals with undisclosed values
The pace of venture deals has slowed over the year though amount raised per deal has picked up

13. $77M CoVenture
$60M Greylock Partners
$53M Norwest Venture Partners
$53M Accel Partners
$50M New Enterprise Associates
$250M Softbank
$166M CDPQ
$101M Generation Investment Management
$100M JP Morgan Chase, Temasek
$80M Iconiq Capital
2 0 1 7 ’ s T o p R a i s e s
Source: Pitchbook
13

14. Q u a r t e r l y E x i t s i n 2 0 1 7
14
$191M
$40M
$213M
$474M
$142M
$299M
$125M
$0M
$100M
$200M
$300M
$400M
$500M
Q1 Q2 Q3 Q4
CumulativeExitSize(in$USD)
IPO M&A PE
1
4
2
6
1
2
2
1. Source: Pitchbook
2. Deal count excludes deals involving accelerators, incubators, and crowdfunding and deals with undisclosed values
The pace of exits has slowed over the year. Though strategic buyers were more active, PE firms spent more on average. PE
firms were involved in ~30% of non-IPO exits but accounted for ~33% of capital spent.

15. T h e P a t h t o E x i t i s L o n g
1. Source: Pitchbook
15
10 12 41
151
59
330
727
2.3
2.8
3.4
8.3
9.1
14.8
14.5
-
2
4
6
8
10
12
14
16
-
100
200
300
400
500
600
700
800
Angel Seed Early Stage VC Late Stage VC M&A Private Equity IPO
AverageCompanyAgeatTimeofDeal
AverageNumberofEmployeesatTimeofDeal
Average # of Employees Years Since Founding

16. $116M IPO (Nasdaq)
$75M IPO (Nasdaq)
$40M Yelp
$35M Welsh, Carson, Anderson, and Stowe
$32M Gannett Company
$470M Paysafe Group
$230M Clearlake Capital
$135M Snap Inc.
$128M Ellie Mae
$125M K1 Investment Management
2 0 1 7 ’ s T o p E x i t s
16
Source: Pitchbook

17. Lessons & Takeaways

18. L e s s o n s & T a k e a w a y s
18
Funding
• Still lots of early stage activity
• Every category is growing, even Martech
• ~ ½ of funded startups go on to raise additional capital (at every stage)
Funding Challenges
• Growth Rates in SMB
• Churn
Exits
• No natural consolidator in SMB
• 6 exits > $100M
• Private Equity interest

19. T h e C a s e f o r P r i v a t e E q u i t y
19
Better alignment (PEs expect to make money on every deal)
Opportunity to reset clock on cap table
Exit, but stay in charge
Two bites at the apple!

20. Shubham Datta
Director
shubham@surepathcapital.com
647.972.6834
Danial Shaikh
Senior Analyst
danial@surepathcapital.com
647.876.5453
Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004
Josh Scherman
Vice-President
josh@surepathcapital.com
646.420.0074
Toronto • San Francisco