1. Granahan Investment Management, Inc.
Small Cap Focused Growth Product December 31, 2011
At a Glance Annualized Performance Granahan Focused Growth Russell 2000 Growth
Product Assets ($000): $419
35 30.0
Minimum Investment ($000): $3,000 Small Cap Focused Growth
Status: Open 30 Net of Fees
Inception Date: August 1, 2007 December 31, 2011
25 22.0
Benchmark: Russell 2000 Growth 19.0
Capitalization: Typically, $200 Mil - $2 Bil at purchase 20 15.0
Portfolio Manager: Andrew L. Beja, CFA 12.1
15
Typical Number of Holdings: 30-40 7.5
10
Distinguishing Factors
5 1.5
• Experienced portfolio manager with a demonstrated
record of success. 0
• Seeks capital appreciation through investment in a
limited number of sustainable growth companies -5 -2.9
using a strict risk/reward discipline. 4Q2011 1-Year 3-Year Since Inception
• Research centered on the manager’s areas of
expertise. Annualized (Aug 2007)
Investment Philosophy
Granahan Investment Management (GIM) believes that Selected Portfolio Statistics
small dynamic companies provide the greatest potential
Trailing 3-years through 12/31/2011
for superior long-term performance. Granahan Focused
Growth product invests using a bottom up approach to Gross of Fees
researching companies and a strict risk/reward discipline
for selecting stocks and managing the portfolio. The net Annualized Alpha 14.1%
result is a portfolio of 30-40 attractively priced stocks of Upside Capture 107.9%
some of the most exciting and innovative companies in
Downside Capture 55.6%
the economy.
Tracking Error 9.2
Investment research for the product concentrates on Information Ratio 1.3
areas of the portfolio manager’s core competency,
including technology services, internet, consumer, and Source: Informais
business services. The Focused Growth investable
universe is approximately 100 companies that enjoy
large, open-ended opportunities, sound business
models based on sustainable competitive advantages,
strong financials, and superior management teams. LifeCycle Diversification: Adds Stability
Company analysis is combined with a rigorous ongoing
valuation and portfolio construction discipline centered
on expected return and risk/reward. The net result is a
portfolio that has generated consistent, strong risk- Core Growth
adjusted returns over time. 47%
Firm History Pioneer
21%
Founded in 1985, Granahan Investment Management,
Inc. is a 100% employee-owned firm specializing in
smaller cap equity investments for large institutions and
wealthy individuals. The firm utilizes fundamental,
bottom-up research to uncover and invest in fast
growing companies under $6 billion in market cap. The
Cash
firm has grown to nearly $3 billion in assets under
7% Special Situation
management representing several large institutional
clients. The three founding principals have consistently 25%
added to the investment team which now totals twelve
professionals.

2. Granahan Focused Growth Composite December 31, 2011
Composite Assets Annual Performance Results
Total Firm
Assets
Date ($-Millions) U.S. Dollars Number of Composite Composite Russell 2000 Composite Non-Fee
($-Millions) Accounts Gross Net Growth Dispersion Paying
Index Assets (%)
2011 $2,741.5 $.4 <5 13.19% 12.07% -2.91% NA 100
2010 $5.4 8 30.06% 28.81% 29.08% 0.15 7
2009 $4.2 8 53.80% 52.33% 34.47% 0.06 10
2008 $1.9 6 -46.34% -46.91% -38.54% NA 10
2007* $.4 <5 18.24% 17.76% 3.28% NA 100
NA – Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year.
*Partial year performance: August 1, 2007 through 12/31/2007
Composite Footnotes
Granahan Investment Management claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS
standards. Granahan Investment Management has been independently verified for the periods January 1, 1993 through March 31, 2011. Verification assesses whether (1) the firm has
complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present
performance in compliance with the GIPS standards. GIM is an independent, SEC- registered investment firm that oversees small and mid-cap equity portfolios for large institutions and
wealthy individuals. The Small Cap Focused Growth product utilizes fundamental, bottom-up research and analysis to invest in companies in the small cap sector of the market that exhibit
sustainable high earnings growth, with a focus on the technology services, internet, consumer, and business services sectors. The benchmark for the Small Cap Focused Growth product is
the Russell 2000 Growth. The composite, created in December 2011, is calculated by asset-weighting the performance of each account on a monthly basis. The composite includes returns
from the portfolio manager’s prior firm, from inception of August 1, 2007 through December 30, 2011. Accounts are included beginning with the first full month under management and
terminated accounts are included in the composite. Performance calculations, expressed in U.S. dollars, produce a total return including cash and the reinvestment of dividends and interest.
Standard Deviation is calculated using equal-weighted total returns for accounts in the composite the entire year. Leverage is not utilized. Policies for valuing portfolios, calculating
performance, and preparing compliant presentations are available upon request.. Returns are gross of investment management fees, which when included, reduce investment returns. Net of
Fees returns are calculated by applying the fee schedule below to all accounts in the composite. The fee for accounts managed in the Small Cap Focused Growth style is payable quarterly in
arrears and is calculated by applying the following ANNUAL percentages to the average value of the assets in an account on the last day of each month in the quarter: First $15 million 1.00%,
next $35 million 0.80%, next $50 million 0.60%, above $100 million 0.73%. Fees are collected quarterly, which produces a compounding effect on the total rate of return net of management
fees. Market value is based on trade date and security pricing is supplied by Telemet. A complete list and description of all of the firm's composites is available upon request. Past
performance is no guarantee of future results.
Top Ten Holdings December 31, 2011
Small Cap Russell 2000
December 31, 2011
Focused Growth Growth
Name %
Median Market Cap 1.16 bil 0.52 bil
Monotype Imaging Holdings 8.4 Weighted Avg. Market Cap 1.69 bil 1.38 bil
Equinix, Inc. 7.4
Est. 3-5 Year EPS Growth 20.5% 16.0%
DealerTrack Holdings 7.4
Forward P/E Ratio 23.5X 19.2X
ATMI Inc. 7.2
Affiliated Managers Group 7.0 Dividend Yield 0.14% 0.77%
SPS Commerce 5.5 Long Term Debt to Capital 13.4% 18.5%
Aspen Technology 4.0 Average Price/Book 2.95 3.02
Constant Contact 3.9 Source: FactSet
51job Inc. ADS 3.2
Tennant Co. 3.1
Granahan Investment Management, Inc.
Specialists in Small Cap Equity Management
275 Wyman St., Suite 270, Waltham MA 02451 781-890-4412 www.granahan.com info@granahan.com