VC-BACKED M&A SNAPSHOTQ1 2011

APRIL 2011

OVERVIEW COMMENTARY

As we highlighted earlier this week in our Q1 M&A Snapshot, overall M&A activity levels in our sector accelerated with a good overall tone.  Similarly, venture capital-backed M&A volume was up by 35%.

Summary observations for the quarter include:

1. The median return on invested capital was a very healthy 5.4x(a)

2. Five transactions provided extraordinary high returns to investors (in excess of or equal to 9.0x invested capital):

Buyer / SellerSalesforce / Radian6 AOL / GoViralSkype / QikConcur / TripItFacebook / SnaptuBroadcom / Provigent

3. Total liquidity to VCs increased from Q4 2010 levels by 31%.

4. Non-U.S. sellers comprised 37% of transactions. Seven out of ten of these companies were backed by local region VCs.

FOLLOWING ANALYSIS

SUMMARY OF VC-BACKED M&A EXITS:

VC-BACKED M&A TRANSACTIONS:

SUMMARY OF QUARTERLY ACTIVITY IN NUMBERS AND TONE

L I S T I N G O F T R A N S A C T I O N S BETWEEN $25MM-$1B IN VALUE,

2

VC-BACKED M&A SNAPSHOT

Trx Value/Inv. Cap

37.1x11.0x9.2x9.2x9.2x9.0x

Seller DescriptionSocial media monitoringOnline video distribution network Mobile video streaming serviceOnline travel managementRich mobile apps for feature phonesSoC for wireless networks

(a) Note: Data pertains to 23 transactions in the quarter (out of a total of 27), where both acquisition price and total invested capital were disclosed.

COVERAGEArchitect Partners tracks venture capital-backed M&A activity within the converging Internet | mobile | digital media sectors. The following assessment is focused on venture capital-backed M&A transactions with announced values of between $25mm and $1b as these typically represent successful business-building endeavors. We also include transactions with unannounced values which we believe are within $25mm-$1b range.

Note: 1) Dark blue includes VC-backed M&A transactions with announced values of between $25mm and $1b. Light blue includes VC-backed M&A transactions where consideration paid was not announced, however we believe to have values of between $25mm and $1b.2) Total consideration paid and median transaction size are calculated based on transactions with announced values of between $25mm and $1b.3) Percentage is based on U.S. target, calculated based on cumulative transactions with announced and unannounced values.4) Transaction values within a range are presented as a mid-point value

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MARKET TONEQuality businesses with momentum attract close assessment although buyers remain prudent and move at a moderate pace. Valuations solid to robust.

VC-BACKED M&A SNAPSHOT - SUMMARY

Venture-Backed M&A Exits (#)1......................................................................

Total Consideration Paid ($b)2,4........................................................................

Median Transaction Size ($mm)2,4....................................................................

U.S.-based Target (%)3.......................................................................................

2010Q1 Q2 Q3 Q4

12 17 18 16

3 8

4

2026

20

$70

$135

$70

$124

67%

85% 74% 75%

63%

2011Q1

$4.2

$103

$1.4

$2.3

$3.4 $3.2

27

Below, we highlight Venture Capital-backed transactions that have announced values of between $25mm and $1b.

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Note:ND= Funding information undiscloseda) Represents public company at time of acquisition. Funding is cumulative private financing for the company.

VC-BACKED M&A SNAPSHOT - TRANSACTIONS

INVESTED

CAPITAL ($mm)TARGET ACQUIRER

ACQUISITION

PRICE ($mm)

M&A

ALERT

$436

$360

$350

$315

$306

$277

$263

$225

$190

$136

$125

$120

$115

$103

$100

$100

$97

$95

$89

$80

VENTURE CAPITAL FIRMS

$244

$40

$10

$37

$59

ND

$53

$41

$50

$15

$28

$13

ND

$59

$13

$19

$9

$24

ND

$69

MULTIPLE OF

INV. CAPITAL

1.8x

9.0x

37.1x

8.5x

5.2x

ND

5.0x

5.5x

3.8x

9.2x

4.5x

9.2x

ND

1.8x

7.6x

5.3x

11.0x

4.1x

ND

1.2x

TARGET

LOCATION

(a)

(a)

(a)

Stata Venture Partners

Vodafone VenturesTime Warner Investments

Women’s Growth Capital Fund

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VC-BACKED M&A SNAPSHOT - TRANSACTIONS (continued)

INVESTED

CAPITAL ($mm)TARGET ACQUIRER

ACQUISITION

PRICE ($mm)

M&A

ALERT

$65

$61

$58

$55

$45

$34

$31

VENTURE CAPITAL FIRMS

$12

ND

$7

$6

$32

$10

$8

MULTIPLE OF

INV. CAPITAL

5.7x

ND

8.3x

9.2x

1.4x

3.3x

3.9x

7.0x5.4x

TARGET

LOCATION

AverageMedian

Note:ND= Funding information undiscloseda) Represents public company at time of acquisition. Funding is cumulative private financing for the company.