Beyond VC: Capital Raising for ISVs Without Giving Up Equity

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Beyond VC: Capital Raising for ISVs Without Giving Up Equity How to fund your growth without losing control ​ BJ Lackland ​ John Stewart ​ CEO, Lighter Capital ​ CEO, Cloudbilt ​ @bjlackland ​ @CloudbiltApps

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Safe Harbor Statement* Safe harbor statement under the Private Securities Litigation Reform Act of 1995: This presentation may contain forward-looking statements that involve risks, uncertainties, and assumptions. If any such uncertainties materialize or if any of the assumptions proves incorrect, the results of salesforce.com, inc. could differ materially from the results expressed or implied by the forward-looking statements we make. All statements other than statements of historical fact could be deemed forward-looking, including any projections of product or service availability, subscriber growth, earnings, revenues, or other financial items and any statements regarding strategies or plans of management for future operations, statements of belief, any statements concerning new, planned, or upgraded services or technology developments and customer contracts or use of our services.   The risks and uncertainties referred to above include – but are not limited to – risks associated with developing and delivering new functionality for our service, new products and services, our new business model, our past operating losses, possible fluctuations in our operating results and rate of growth, interruptions or delays in our Web hosting, breach of our security measures, the outcome of any litigation, risks associated with completed and any possible mergers and acquisitions, the immature market in which we operate, our relatively limited operating history, our ability to expand, retain, and motivate our employees and manage our growth, new releases of our service and successful customer deployment, our limited history reselling non-salesforce.com products, and utilization and selling to larger enterprise customers. Further information on potential factors that could affect the financial results of salesforce.com, inc. is included in our annual report on Form 10-K for the most recent fiscal year and in our quarterly report on Form 10-Q for the most recent fiscal quarter. These documents and others containing important disclosures are available on the SEC Filings section of the Investor Information section of our Web site.   Any unreleased services or features referenced in this or other presentations, press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available. Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements. *also review your Partner Non-Disclosure Agreement (NDA)

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Today’s Agenda •  The funding landscape – why is it so hard? •  What options are available – Cloudbilt’s experience •  Revenue-based financing – why it works for ISV’s

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•  Revenue Based Financing for tech companies •  $50k-$1mm per company •  Technology + Capital = Better for Entrepreneurs SaaS 21% SaaS + Service 52% 25% Tech-enabled services Digital Media •  100+ financings across 70+ companies •  Almost 80% are SaaS

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•  Apps that empower people to move from Insight to Action •  Cloudbilt’s MapAnything™ is a native solution that is part of the Salesforce1 Ready Collection •  Grew AppExchange Product Revenue 4600% from December 2012 (First Funding) till now. •  27,000+ User Subscriptions over 500+ Customers •  #227 500 fastest growing US companies •  #15 in the software industry ​ Funding Story •  5 rounds totaling $1M, starting in November 2012 •  Only outside money raised •  The entrepreneur still owns the majority of the company 5

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The funding landscape for ISV’s - why is it so hard? Cost of Entry Angels/VC Other Sources Speed of Innovation Larger Funds Corporate Venture More Startups Series A is The New B Debt + Crowd funding

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Funding paths for ISV’s Established VC Backed Non VC Blended Equity Debt Breakout Revenue$5m Growth & Scale Launch & Traction Incubator / Angels Ideation Bootstrap / Friends & Family

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What is Revenue-based financing? •  The best of debt and equity – aligned interests with no dilution •  Essentially a royalty agreement •  Monthly payments = fixed % of revenue Company revenue Loan payment •  Fits SaaS Example Financing •  Up to $1M or 33% of annualized revenue run rate •  $500K funding •  Payment: 5% of monthly revenue •  Repayment: 1.7x principal ($850K) •  Maturity: 5 years 1 2 3 4 5 6 7 Period8 p8 9 10 11 12 13 14

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Investment Criteria ​ ISV’s looking to grow: •  Sales and marketing initiatives e.g Dreamforce! •  Hiring new people •  Product development •  Transitioning from services to product ​ Financials: •  Recurring Revenue or Repeat Customers •  Revenue Min: $15k+ / month ​ Management: •  Gross Margin: High (50%+) •  High ownership, full time dedication •  Profitability: Not required, but clear path to profitability from our funds ​ Geography: •  Other Debt: Not too high (unless convertible debt) •  HQ in US •  Customer Base: No major concentration p9

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Q&A Meet our Investment Team in the Partner Zone ​ Branden Harper, North East [email protected] Lighter Capital Resources ​ Apply Online www.lightercapital.com/apply Cloudbilt ​ Online www.cloudbilt.com ​ Jonathan Gagliardoni, East ​ Funding Calculator [email protected] www.lightercapital.com/how-it- ​ @Dreamforce works/see-if-you-qualify ​ Jon Prentice , California •  Cloud Expo West W827 & W124 [email protected] ​ Funding Blog •  Cloud Expo North N1028 & https:// N2009 ​ Rebecca Conner, West www.lightercapital.com/blog/ [email protected]

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Thank you

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