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On Tuesday, November 12, 2013, Institutional Investor and SumZero, the worlds largest online
membership community of buy-side investment professionals, hosted an idea competition at
Columbia University Business Schools Uris Hall Auditorium.
Nineteen emerging managers were selected from within the SumZero community on the basis of
strong performance and high-quality peer reviews. Each manager gave a three minute pitch on their
best idea to an audience of analysts and investors who rated their pitch for validity of the thesis,
strength of the argument, feasibility of the trade and originality.
We invite you to view these ideas and register to download each presenters bio and full pitch paper.
If youre a professional investment ofcer or analyst, we invite you to register to vote for the winning
idea.
Favorite Investment Book:
The Most Important Thing by Howard Marks
Favorite Quote/Author:
I dont want a lot of good investments - I want a few out-
standing ones. Philip Fisher
Most Attractive Area of the Market Right Now:
Undervalued stocks in good businesses that have pricing
power, healthy balance sheets, opportunity for secular
revenue growth, and management teams concerned with
shareholder value.
Least Attractive Area of the Market Right Now:
Overvalued stocks with competitively disadvantaged busi-
ness models, weak balance sheets, and burning cash from
operations.
Languages Spoken:
English
Best Past Investment Made:
TYPE in 2013. Purchased in 2011 at an average cost of
$11.67 and sold last shares recently at $26.10. Owns the
trademarks to the worlds most popular fonts and one of
the better business models I have ever come across.
Worst Past Investment Made:
RIMG in 2007. Although historically a good business and
cheap, it was ghting the end of a demand curve in CD/
DVD publishing equipment. I am now more careful about
technological obsolescence.
Personal Investing Style:
Value
Areas of Personal Expertise:
Equities, General, North America
Eileen Segall Tildenrow Partners, LP
Age: 35 Title: Founder and Portfolio Manager Location: New York, NY
Education (Undergrad/Grad/Certications):
M.I.T B.S. in Materials Science and Engineering
Previous Employers/Positions: Assistant Portfolio Manager and Director of Research, Nicusa
Capital Partners, LP (2003-2006); Equity Research Associate, Robertson Stephens.
Bio:
Eileen Segall is the Founder and Portfolio Manager of Tildenrow Partners, LP. Ms. Segall has thirteen years of experience
in the investment industry and has managed Tildenrow Advisors, LLC since November 2006. Ms. Segall is a value inves-
tor and employs fundamental analysis and a disciplined investment process to research equities mis-priced by the mar-
ket. Previously she spent four years at Nicusa Capital, where she helped to develop Nicusas value-oriented investment
strategy in her primary role as Assistant Portfolio Manager. Ms. Segall started her career as an equity research associate
covering telecommunications equipment at Robertson Stephens Investment Bank in New York City. She has a Bachelors
of Science degree in Materials Science and Engineering from the Massachusetts Institute of Technology (M.I.T.)
AUM: $1-50 million Firm Focus: North America Equities Past Ideas Submitted on SumZero: Long PRCP
Firm Strategy: Long-biased, concentrated capital in great businesses, often niche, unknown, or misunderstood, selling
at cheap prices.
Fund Disclaimer: Please see section 4 of appendix.
Fund Description:
Tildenrow Partners, LP runs a concentrated value strategy in primarily North American equities. The fund is long-biased
in undervalued stocks with high return on invested capital (ROIC), strong free cash ow, growing market opportunity,
sustainable competitive advantage, and shareholder-friendly management. Most of Tildenrows opportunities are uncov-
ered through a disciplined quantitative screening process. They are typically executed in inefciently traded stocks where
extensive due diligence can yield a tangible edge. Short positions are smaller in size and are opportunistic in expensive,
competitively weak businesses. The fund has a long-term investment horizon and is not overly concerned with short-
term uctuations in individual stock prices. Tildenrow Partners, LP is a private investment partnership open to accredited
investors that meet the funds investment criteria. The partnership began investing assets under management on January
1, 2008. Tildenrow Advisors, LLC, launched in November 2006, is the investment advisor to the partnership.



Eileen Segall
Tildenrow Partners, LP

Company: ReachLocal Inc.
Ticker: RLOC (NASDAQ)
Action: Long
Asset Class: Common Stock
Expected Timeframe: 2-3 years
Situation: Value
Current Price: $12.17 USD
Target Price: $33.50
Diluted Shares: 28 million
Cash and Cash Equivalent: $85 million
Debt: $0 million
Market Cap: $336 million
Enterprise Value: $250 million
2012 Revenues: $455 million
2012 Adjusted EBITDA: $24 million
2012 GAAP EPS: ($.01)
2012 Free Cash Flow: $26 million
Currency: USD

Thesis: Long. RLOC is a good business undervalued and misunderstood by the buy side, with 17% of the
stock's float short. At first glance, RLOC can appear to be only a low-barrier search engine optimization
(SEO) technology company. In reality, RLOC has ~1000 marketing executives who work closely with local
businesses, helping them to maximize their online marketing and commerce strategy. As a result, RLOC
has above-average ROIC and strong free cash flow, understated by U.S. GAAP net income. Furthermore,
the company has a healthy balance sheet, active share repurchase program, and is in an industry with
strong secular tailwinds. In 2-3 years, RLOC could be worth $33.50, almost 3x its current stock price of
$12.17, based on EBITDA margin expansion from current depressed levels and reversion to higher
valuation multiples.

Description: ReachLocal, Inc (NASDAQ: RLOC) manages online lead generation, conversion, and
transaction solutions for 24,600 local small and medium sized businesses (SMBs) and national brands
with local presence. The company's typical customer offers a needs-based service such as plumbing,
auto repair, or dentistry in their metro area and spends an average of $22,000 per year with ReachLocal.
Products include ReachSearch (search engine optimization platform), ReachCast (display advertising),
ReachRetargeting (re-marketing), TotalTrack (marketing analytics), TotalLiveChat (click-to-chat),
ReachEdge (SaaS analytics and lead conversion), ReachCommerce (website, mobile, booking and back
office management), and ClubLocal (consumer portal.) The company employs roughly 1000 full-time
marketing executives, called Internet Marketing Consultants "IMCs", in addition to resellers and
partners, and is in 16 countries with headquarters in Woodland Hills, CA.

RLOC is a buy at $12.17 because:

Stock is cheap with low investor sentiment Trades at 0.5x EV/Revenue and 10x EV/FCF on 2012
financials. The stock's float is 17% short, with 24 days to cover, and is below its IPO price of $13.00. The
stock has lagged the run in the S&P 500 by more than 70% the past 3+ years.

Margin expansion EBITDA margins can triple from the current 5.5% reported to the mid teens.
Margins are depressed from roughly $60 million in expenses due to reinvestment in its sales force,
International market expansion, and major new product launches in 2013. EBITDA margins could go to
15% in 2-3 years.

GAAP understates Strong Free Cash Flow and High ROIC - GAAP net income reported on the company's
Income Statement significantly understates free cash flow. GAAP net income was a loss of $232k versus
positive free cash flow of $26 million in 2012. Differences are primarily due to a positive working capital
model as the company grows, arising from prepayments by customers (deferred revenue) and media
purchases (accounts payable.) Return on Invested Capital (ROIC) is above-average at roughly 15-20%,
and is the result of a RLOC's scalable and capital-light business model.

Some "Stickiness" with Customer Base -- Customers interviewed had very positive feedback on RLOC,
with most noting high return on investment (ROI) from products purchased and an active relationship
with their IMC's. Most said they were not interested in switching away from RLOC, and that they would
consider additional products and services from the company. These relationships appear to be
somewhat sticky as revenue from older clients (>1 year) continues to climb as a percentage of RLOCs
total revenue from 11% in 2006 to 47% in 2012.

RLOC can be easily dismissed as a low-barrier search engine optimization (SEO) technology company
because its number one selling product is ReachSearch. ReachSearch optimizes ad spend on search
engines like Google, depending on the SMB's budget and the dynamic pricing of keywords. ReachSearch
customers said the product eases a significant pain point in their business by effectively managing this
portion of their business and were generally unconcerned with RLOC's markup on cost-per-clicks they
could otherwise buy directly from Google. I believe this is a sign RLOC has some pricing power.

Furthermore, RLOC has expanded its products beyond lead generation (ReachSearch being the most
popular) over the past several years to include lead conversion and analytics, website, mobile, and social
media optimization solutions, and online booking and back office management, which are generally too
sophisticated and time consuming for most local SMBs to develop or manage independently or
effectively. I believe these additional products create further stickiness within their customer base.

Revenue growth New product launches (ReachEdge, ReachCommerce, and ClubLocal) in 2013 and
International revenues (growing approximately 40% y/y and now 34% of total revenues) should drive
the majority of revenue growth over next few years. Overall, the industry should have secular tailwinds
for many years as local services transactions (a roughly $3 trillion market) increasingly move online.

North America revenue growth has slowed due to the maturity of the market, U.S. economy, and the
significant decrease in the number of marketing executives (IMCs) selling in North America (in favor of
hiring IMCs for International markets.) I believe further sluggish growth is already priced into the stock
given the high profile of this topic on earnings calls and the stock's cheap valuation. Any positive results
from new products or salesforce spend, which I believe could re-invigorate North American revenues,
would act as a catalyst to the stock.

Strong balance sheet - $3.10 per share in cash, or $85 million, which is 25% of market cap. No debt.

Ownership philosophy -- Share buyback program expanded by $21 million to $47million in March 2013
and to-date the company has repurchased 3.4 million shares for $36 million. 54% of the stock has been
owned for a long time by two of its original venture capital investors. Former and current management
own an additional 10%.

Estimates:
2013E Revenues = $517 million
2013E Adj. EBITDA = $30 million, 5.8% margin
2013E FCF = $24 million

Valuation on 2013 Estimates:
EV/Revenues: 0.5x
EV/Adj. EBITDA = 8.3x
EV/FCF = 10.6x

Price Target of $33.50 is based on multiple of 18x EV/FCF (an average multiple for US stocks historically)
on 2015 estimates, adjusted for the cost of options:

2015E Revenues = $587M (6.6% CAGR over next two years)
2015E Adjusted EBITDA = $92 million, 15.7% margin
2015E FCF = $55 million

Catalysts: improving EBITDA margins from current depressed levels, valuation multiple expansion, any
upside to current low expectations for slowing North America revenue growth.

Some Risks:

RLOCs marketing executives fail to offer a high level of service important to maintain revenue.

Increased competition. RLOC has a head start in its market by building and training a team of ~1000
marketing executives over the last nine years, focused only on online marketing solutions for local SMBs.
The most similar competitor, Dex Media (DXM), has appeared this year as a merger of two bankrupt
yellow pages companies (Dex One and SuperMedia.) With its history in offline rather than online
advertising, however, along with a huge debt load, I believe Dex Media will have trouble competing
profitably with RLOC. Furthermore, much larger companies with resources to build a similar size team
and interested in the local market (like Google, Yahoo, etc.) have typically eschewed business models
that are relationship-based.

Churn is not reported by management and increase may not be immediately apparent in the financials.

Google decides to no longer offer favorable status to ReachLocal as a Gold partner and significantly
reduces its rebates (~4% of revenues) to the Company.

Google, Yahoo, Bing, etc. take actions either technically or business-wise that would force RLOC readjust
its business at RLOC's own expense.

Many of the original founders of the company have recently left, including the CEO. The new CEO, yet-
to-be-decided, and management may not be as good as in the past.

The economy worsens and impacts advertising spend by local businesses.

____________________________
Legal Disclosures:


This investment write-up in no way incorporates any non-public information and/or
unsubstantiated rumors or misrepresentations and does not involve any act, practice, or course of
business which operates or would operate as a fraud or deceit upon any person in connection with an
investment.

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SumZero Idea Database and it complies with all applicable policies of my employer.

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