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quartile benchmarks for U.S. venture capital healthcare and/or U.S. total venture capital.7

• Exceeded relevant public equity indices by substantial margins on all realized funds:
Members of the New Leaf team invested $1.02 billion in the portfolios of healthcare technology investments in four Sprout Capital funds (Sprout Capital IX, L.P., Sprout Capital VIII, L.P., Sprout Capital VII, L.P. and Sprout Growth II, L.P.), and these are now fully realized (or near fully realized in the case of Sprout Capital IX, L.P.). The net annual IRR’s on the healthcare technology portfolios in these funds outperformed the S&P 500 (568 – 2,258 bps), S&P Healthcare (302 – 2,064 bps), NASDAQ Composite (451 – 2,125 bps), and the Russell 3000 (502 – 2,215 bps) using the Public Market Equivalent Plus (PME+) methodology8. Although PME+ methodology is most informative when used to analyze funds whose returns are mature, the PME+ methodology shows that NLV-I is outperforming these same indices, and shows encouraging results for NLV-II despite its relative immaturity.

It is this consistently high level of return over an 18 year period, spanning several challenging investment cycles, that creates a truly unique track record within the venture capital sector.

The chart below illustrates details of the gross and net performance by fund.

Chart 1: Returns by Fund
As of March 31, 2014
($ in millions)

Fund: Growth II HCT | Sprout VII HCT | Sprout VIII HCT | Sprout IX HCT | NLV-I | NLV-II
Fund Size: $15M Fund | $95M Fund | $147M Fund | $690M Fund | $310M Fund | $450M Fund
Paid-In Capital $15M | $95M | $147M | $690M | $303M | $407M
Vintage Year: (1993 - 2007) | (1995 - 2011) | (1998 - 2012) | (2000) | (2005) | (2008)

First Investment 1995 | 1995 | 1998 | 2000 | 2005 | 2008

Gross Fund Returns
Total Multiple N: 4.4x | 2.6x | 1.7x | 2.0x | 2.1x | 1.8x
Realized Multiple N: 4.4x | 2.6x | 1.7x | 2.2x | 1.7x | 2.0x
Total IRR D: 44% | 19% | 10% | 15% | 19% | 30%
Realized IRR D: 44% | 19% | 10% | 17% | 23% | 33%

Net Fund Returns
Net Total Multiple N: 3.69x * | 2.17x * | 1.49x * | 1.66x * | 1.75x | 1.45x
Net Total IRR D: 28.9% | 12.0% | 6.0% | 9.3% | 12.0% | 16.7%
Net Distributed / Paid-In Multiple F: 3.69x | 2.17x | 1.49x | 1.55x | 0.51x | 0.50x
Net Distributed $s to LPs: $56.3 | $207.0 | $218.7 | $1,071.5 | $154.7 | $204.2

Interim Fund Liquidity Metrics
(Distributed + Public) / Paid-In Multiple G: -- | -- | -- | 1.62x | 0.74x | 1.18x
(Distributed + Liquid Public) / Paid-In Multiple H: -- | -- | -- | 1.58x | 0.57x | 0.75x

IRR Outperformance Versus Public Indices **
PME+ (Basis Points over S&P 500 Healthcare Sector): +2,064 bps | +302 bps | +441 bps | +776 bps | +201 bps | -187 bps
PME+ (Basis Points over S&P 500) **: +2,258 bps | +568 bps | +587 bps | +638 bps | +496 bps | +275 bps
PME+ (Basis Points over Russell 3000) **: +2,215 bps | +554 bps | +502 bps | +565 bps | +446 bps | +218 bps
PME+ (Basis Points over Nasdaq Composite) **: +2,125 bps | +554 bps | +725 bps | +451 bps | +181 bps | -21 bps

NLV and Sprout fund data as of March 31, 2014. Sprout fund statistics computed based on healthcare portfolio within Sprout.
* See Appendix 2 and endnotes A and E in Appendix 4. Based on synthetic funds with assumptions around recycling and fee structure.
** Based on Public Market Equivalent (PME+) methodology. See Appendix 3 and endnotes A, B, E and G in Appendix 4.
Please Section XIII: "Appendices" for definitions of terms and/or methodology.

7 Please refer to Section III: "Summary of Historical Investment Performance" and Section XIII: "Appendices" and endnotes B (regarding public indices) and C (regarding information provided by Cambridge Associates) in Appendix 4.
8 Please refer to Section III: "Summary of Historical Investment Performance" and Section XIII: "Appendices", Appendix 3 (regarding the PME+ methodology) and to endnotes B, D, E and F in Appendix 4.

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