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Time-Based Closed Rate Analysis

(As of 1Q20)

Cohort In-Qtr In 1 Qtr In 2 Qtrs In 3 Qtrs In 4 Qtrs In 5 Qtrs In 6 Qtrs


1Q17 0% 4% 6% 2% 4% 2% 0%
2Q17 2% 4% 8% 4% 2% 0% 0%
3Q17 2% 0% 6% 6% 2% 4% 0%
4Q17 0% 2% 10% 2% 0% 0% 0%
1Q18 2% 4% 8% 4% 2% 0% 0%
2Q18 4% 2% 4% 6% 2% 2% 0%
3Q18 2% 2% 6% 4% 2% 0%
4Q18 2% 4% 8% 0% 2%
1Q19 0% 4% 6% 2%
2Q19 2% 4% 8%
3Q19 0% 4%
4Q19 2%
Average 1.5% 3.1% 7.0% 3.3% 2.0% 1.1% 0.0%

Notes
Cells contain percent of oppties generated that closed by quarter
Thinking only about average sales cycle length hides the reality of an underlying distribution
Can do on ARR or oppty count basis; latter is simpler and works to the extent oppties are homogenous
Most companies define an oppty valid as having close date within 4 quarters; nevertheless slips outside that window
Rows with any gray cells are effectively partial close rates (and excluded from total) because the required 6-quarter p

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Total
18%
20%
20%
14%
20%
20%
16%
16%
12%
14%
4%
2%
18.7%

slips outside that window occur


the required 6-quarter period has not fully elapsed
Inverted Funnel Using Time-Based Close Rates

1Q20
Needed
New ARR plan $ 5,000,000
New ARR ASP $ 125,000
Oppties needed to close 40
Oppty surplus or (gap) 2.8
Oppty Sourcing

Quarterly Oppties Oppties


Close Rate Generated Closed
In-Qtr 1.5% Plan 325 4.9
1 Qtr Ago 3.1% 225 7.0
2 Qtrs Ago 7.0% 250 17.5
3 Qtrs Ago 3.3% 225 7.5
4 Qtrs Ago 2.0% 200 4.0
5 Qtrs Ago 1.1% 175 2.0
6 Qtrs Ago 0.0% 150 -
Total 18.1% 42.8

Notes
Orange cells are drivers reflecting oppty generation plan
Blue cells show the oppty surplus or gap generated by this model
This model shows a significant gap at the end of year. While early targets are sufficient to support 1Q-3Q th

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2Q20 3Q20 4Q20

$ 5,250,000 $ 6,000,000 $ 7,500,000


$ 125,000 $ 125,000 $ 125,000
42 48 60
(1.1) (0.9) (10.8)

Oppties Oppties Oppties Oppties Oppties Oppties


Generated Closed Generated Closed Generated Closed
300 4.5 325 4.9 350 5.3
325 10.0 300 9.3 325 10.0
225 15.8 325 22.8 300 21.0
250 8.3 225 7.5 325 10.8
225 4.5 250 5.0 225 4.5
200 2.3 225 2.6 250 2.9
175 - 200 - 225 -
40.9 47.1 49.2

are sufficient to support 1Q-3Q they are not enough to support 4Q

agreement
2020

$ 23,750,000

190
(9.9)

1,300
Inverted Funnel Using Time-Based Close Rates

1Q20
Needed
New ARR plan $ 5,000,000
New ARR ASP $ 125,000
Oppties needed to close 40
Oppty surplus or (gap) 3.6
Oppty Sourcing

Quarterly Oppties Oppties


Close Rate Generated Closed
In-Qtr 1.5% Plan 375 5.6
1 Qtr Ago 3.1% 225 7.0
2 Qtrs Ago 7.0% 250 17.5
3 Qtrs Ago 3.3% 225 7.5
4 Qtrs Ago 2.0% 200 4.0
5 Qtrs Ago 1.1% 175 2.0
6 Qtrs Ago 0.0% 150 -
Total 18.1% 43.6

Notes
Orange cells are drivers reflecting oppty generation plan
Blue cells show the oppty surplus or gap generated by this model
This model increases oppty generation targets across the year to ensure we have enough pipeline to hit b

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2Q20 3Q20 4Q20

$ 5,500,000 $ 6,000,000 $ 7,500,000


$ 125,000 $ 125,000 $ 125,000
44 48 60
(1.5) 4.9 (1.5)

Oppties Oppties Oppties Oppties Oppties Oppties


Generated Closed Generated Closed Generated Closed
375 5.6 400 6.0 425 6.4
375 11.6 375 11.6 400 12.4
225 15.8 375 26.3 375 26.3
250 8.3 225 7.5 375 12.5
225 4.5 250 5.0 225 4.5
200 2.3 225 2.6 250 2.9
175 - 200 - 225 -
42.5 52.9 58.5

we have enough pipeline to hit big 4Q20 target

agreement
2020

$ 24,000,000

192
5.4

1,575