2016 gsv investor day

2016 GSV Capital 3rd Annual Investor Day

June 1, 2016

Michael Moe, CFA Co-Founder, GSV @michaelmoe

GSV Capital (NASDAQ:GSVC)

Investors GSVC Investments

Public Growth - Ins!tu!onal - Individual - Family Office

2015 IN REVIEW

$54.2 Million Net Realized Gains

$2.76 Dividend

RIC APPROVAL

Investments in:

43 Net Promoter Score

Por!olio Companies

LESSONS LEARNED First 5 Years

1) Focus on emerging growth stage companies… Series B and beyond.

2) Don’t buy shares too close to the IPO.

3) We’re agnos!c between primary and secondary shares… but GSV has compe!!ve advantages in secondaries.

4) Avoid “lead” investments and make sure there are top ins!tu!onal investors involved.

5) Sell when you have an opportunity at a fair price.

6) Create unfair advantages through GSV ecosystem… a strong brand creates opportuni!es.

7) Being right on the fundamentals is more important than being perfect on valua!on.

8) Create our own research rather than relying on “experts” and pundits.

9) Short term market vola!lity creates long term investment opportunity.

10) It’s all about the PEOPLE. Great TEAMS find a way to win.

PORTFOLIO State of Play

47 Investments

Q1 Net Assets 2016

$243.1 Million

Q1 NAV 2016

$10.96 per share

100%+ Por!olio Growth Rate

2013 2014 2015E

104%145%

100%

6%

49%

11%26%

9%

Series ASeries BSeries CSeries D & LaterPublic

91% Investments B Round + Beyond

*Figures are based upon the fair value of each holding as of March 31, 2015, or the cost basis of the holding (exclusive of transaction costs) if the investment closed subsequent to March 31, 2015. In either case, these values are divided by the net assets of GSV Capital as of March 31, 2015.

34%67%

PrimarySecondary

Primary vs. Secondary Investments

*Figures are based upon the fair value of each holding as of March 31, 2015, or the cost basis of the holding (exclusive of transaction costs) if the investment closed subsequent to March 31, 2015. In either case, these values are divided by the net assets of GSV Capital as of March 31, 2015.

6%13%

33%

18%30%

Educa!on TechnologySocial/MobileCloud/Big DataMarketplacesSustainability

Por"olio Distribu!on by Sector

*Figures are based upon the fair value of each holding as of March 31, 2015, or the cost basis of the holding (exclusive of transaction costs) if the investment closed subsequent to March 31, 2015. In either case, these values are divided by the net assets of GSV Capital as of March 31, 2015.

GSV Invests Alongside Leading VCs

4

8

12

8

4

856

*Number of Investments to date

Top 10 Posi!ons = 54% of Por"olio14.2%

5.9%

5.0%

4.4%

4.3%

4.3%

4.2%

4.1%

3.7%

3.7%

Realized Gains &

Losses 2015

Gains $64.6M

Losses $10.4M

Net $54.2M

IRR 31.7%Calculated based on full realized gains/losses that occurred in 2015, not including the par"al sales made in Twi#er ($40.2MM in net proceeds) and SugarCRM ($1.9MM in net proceeds) as GSV Capital s"ll hold both posi"ons.

$26.9 Million Realized Gain

40.9% IRR

$37.2 Million Realized Gain

65.1% IRR

Realized LossesTotus Solu!ons ($6,052,203)

DailyBreak ($2,854,204)rSmart ($1,264,160)

NewZoom ($260,476)TOTAL ($10,431,043)

$31 Million 2015 Investments

$10 Million 2015 Investment

$16.2 Million Fair Value, Q1 2016

100 Million Users

30 Million Subscribers

50% Younger than 27

Source: Company Disclosures

70% Reten"on of 2010

CustomersSource: Company Disclosures

$4 Million 2015 Investment

$5.4 Million Fair Value, Q1 2016

+

$2 Million 2015 Investment

$12 Million Fair Value, Q1 2016

$4 Million 2015 Investment

$14 Million Fair Value, Q1 2016

93 Million Americans Un-banked or

Under-banked

Source: FDIC

$2.5 Million 2015 Investment

$14.0 Million Fair Value, Q1 2016

$1 Billion Series F Led by GM

Global Alliance

$3.5 Million 2015 Investment

$6.9 Million Fair Value, Q1 2016

Supply & Demand

Annual IPOs: 1990 - 2000

406

Source: University of Florida (Professor Jay Ritter, Cordell Professor of Finance, 2016)

Annual IPOs: 2000 - 2015

111

406

Source: University of Florida (Professor Jay Ritter, Cordell Professor of Finance, 2016)

77 VC backed companies went public in 2015

3.1 Years Time to Mone"za"on

2000

10 Years Time to Mone"za"on

2015

3,200 Average number of

companies VC invested in 2001-2015

3,709 Companies Receiving VC

Investment in 2015

2,000+ VC-Backed Private

Companies with $100M+ Market Value

16,000

2,000

250

25

35,000 VC-Backed Companies

IPO Market Cap

<$100M Enterprise Value

>$1B Enterprise Value

1990s Today

$1.9 Trillion U.S. Corporate

Cash

Source: New York Times

More than India’s ENTIRE GDP

You could effec!vely purchase:

Technology Industry Rapidly Consolida!ng

2010-2015

504 M&A Transac!ons

Source: Capital IQ, GSV Asset Management

2010-2015

$112 Billion Transac!on Value

Source: Capital IQ, GSV Asset Management

U.S. Publicly Traded Stocks

Declining

Source: Wilshire Associates, GSV Asset Management (Note: Excluding Investment Funds and Trusts)

1997

Un!tled 1

7,313

U.S. Publicly Traded Stocks

Declining

Source: Wilshire Associates, GSV Asset Management (Note: Excluding Investment Funds and Trusts)

TODAY

Un!tled 1

3,700

7,313

Magic of Silicon Valley =Exponential Ideas

Auto Industry?

Annual R&D Spend:

$7.2 Billion

Source: Company Disclosures

1060Auto Innova"on

Time

Valu

e

1060Tesla = Exponen!al Innova!on

Time

Valu

e

Why Invest in Leaders?

Winner Take All Economy

Value

Scale

10M Users

1.6B Users

Source: New York Times, GSV Asset Management

Value

Scale

21% Search

64% Search

Source: Yahoo Finance

Value

Scale

170M Users

1.1B Users

Source: YouTube, Vimeo

Value

Scale

$125M Revenue

$107B Revenue

Source: Yahoo Finance, Fortune

Source: Economic Policy Institute

CEO Compensa!on

$20

$5,015

$10,010

$15,005

$20,000

1970 1980 1990 2000 2010

Median Income $27K

303x

23x

Source: Forbes

Major League Baseball

$20

$1,140

$2,260

$3,380

$4,500

1970 1980 1990 2000 2010

Median Income $27K

MLB Salary $4.3M

Investment Theme

EDUCATION TECHNOLOGY

50%+ Low Income Students 2000: 4

56%

60%

63%

51%

Source: The Atlantic, Southern Education Foundation, New York Times

50%+ Low Income Students Today: 20

55%

51%59%

50% 68%

60%

61% 61%

65%

71%

58%

51%

50%52%

53%

58%60%58%

59%

51%

Source: The Atlantic, Southern Education Foundation, New York Times

40%+ Low Income Students Today: 39

55%

51%59%

50% 68%

60%

61% 61%

65%

71%

58%

51%

50%52%

53%

58%60%58%

59%

51%

49%

45%

47%

42%

40%

44%

48% 45%

40%49%

47%40%

48%

43%

46%43%

41%

42%

40%

Source: The Atlantic, Southern Education Foundation, New York Times

Low-Income Students 5x More Likely to

Drop out of High School

Source: American Psychological Association

Source: Bill & Melinda Gates Foundation, National Education Association

Dropouts 8x More Likely to

Go to Prison

Source: National Education Association

80% U.S. Prison Popula"on High School Dropouts

400

450

500

550

600

< $20K $40K - $60K $80K - $100K $120K - $140K $160K - $200K

Reading Math Wri!ng

SAT Scores and Family Income

Source: College Board

0%

19%

38%

56%

75%

No College Community College Compe!!ve Most Compe!!ve

Enrollment from Top Quar!leEnrollment from Bo#om Quar!le

Locked Out of Elite Colleges

Source: Pew Research Center

Income Quartile Graduate from CollegeTop 75%

Second 33%

Third 20%

Bottom 8%Source: Pew Research Center

70% of Poor Americans Never Make it to the Middle Class.

Move to Middle+ Stay Put

70%

30%

Source: Pew Research Center

Talent is equally distributed by zip

code…

but opportunity is not.

Educa!on Innova!on…

Time

Valu

e

?

…Exponen!al Opportunity

OPPORTUNITY GAP

Time

Valu

e

Weapons of Mass Instruction

KNEWTON Founded 2008

10+ Million Students

16+ Billion Recommenda"ons

CLEVER Founded 2012

20+ Million Users

COURSERA Founded 2012

18+ Million Students

Investment Theme

SUSTAINABILITY

$0

$20

$40

$60

$80

1977 1983 1989 1995 2001 2007 2013

Moore’s Law in Solar - Swanson’s Law

Solar Cost Declines = Grid Parity

Source: Bloomberg New Energy Finance

Time

Valu

e

Investment Theme

CLOUD + BIG DATA

History of Mankind to 2014

2014 to 2016<

Amount of Data Created

500+ Million Users

1.2 Billion Files Uploaded Daily

Source: Company Disclosures

150,000 Business Customers

Source: Company Disclosures

50% Programs

Watched Were Recommended

Source: Company Disclosures

50% Accuracy

Lung Cancer Diagnosis

Source: The Fourth Industrial Revolution (Klaus Schwab), FortuneSource: IBM

90% Accuracy

Lung Cancer Diagnosis

Source: The Fourth Industrial Revolution (Klaus Schwab), Fortune

$880 Million December 2015 Financing

Source: New York Times

$222 Million U.S. Military Contract Awarded in May

Source: Washington Technology

Investment Theme

Marketplaces

3x Ride Growth 2014-2015

Source: Forbes

11 Million Rides in April

Source: Forbes

5+ Million Members

Source: Company Disclosures

Investment Theme

Social / Mobile

100+ million usersSource: Company Disclosures

9,000 photos uploaded every second

Source: Company Disclosures

10 billion daily video viewsSource: Company Disclosures

Investment Theme

Virtual Reality

AR/VR Industry

$90 Million

$5.2 Billion

2014

2018

176% CAGR

Source: Statista

Lytro fact Lytro

Silicon Valley 3.0

1970

Personal Computer

Graphical User Interface

Computer Mouse

Ethernet

INSERT BETTER PHOTO

GSVlabsInnova!on

Pla#orm

Talent

Startups Corpora!ons

170+ Startups

$200+ Million Raised

GSVlabsEconomic

Model

Corporate Sponsorship

Educa!on Programs

Rent Events

+

Bangalore

Delhi

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