7/21/2019 First Round 2015 Q1 LP Letter

1/4

Pfo blniraetbil dilteblo` bl tfbs cottor bs dilnb`oltbec el` bs bltol`o` sicocy nir uso hy tfo cbabto` pertlors inNbrst Xiul` Depbtec, tfbs ropirt aey lit ho ro`bstrbhuto` ir ropri`udo` bl wfico ir bl pert.

0:0: Cidust Tt.

Zfbce`ocpfbe, ZE 525:0

www.nbrstriul`.dia

DILNB@OLPBECAey ?, 8:5?

@oer Nbrst Xiul` Depbtec Cbabto` Zertlor

Bt bs el oxdbtblm -- el` sdery -- tbao ti ho e volturo depbtecbst.

Bl tfo nbrst quertor in 8:50, Pfo ]ecc Ttroot Giurlec homel tredkblm volturo-hedko` ulbdirls (b.o., prbveto

diapelbos wbtf vecuetbils ivor $5 hbccbil) bl e stiry decco` Pfo Hbccbil @iccer Ttertup Dcuh. Et tfo

tbao tforo woro 08 ulbdirls. Gust ilo yoer cetor, tfo ulbdirl pipucetbil fes airo tfel `iuhco` ti e

titec in 6= ulbdirls. Ros, bt sooas tfet e low ulbdirl wes droeto` ovory 2 `eys cest yoer!

Pfbs bs e troaol`ius sfbnt bl tfo wey tfet stertup diapelbos mot vecuo` -- el` nul`o`. B rodoltcy writo e

hcim pistehiut tfo prbveto BZI pfoliaolil. Es puhcbd aerkot blvostirs dfeso roturls hy blvostblm bl

prbveto diapelbos, tfoyro hrblmblm el blncux in mriwtf depbtec wbtf tfoa, aekblm bt ner oesbor nir

diapelbos ti rebso ailoy et e ulbdirl vecuetbil tfel ti oxbt es ilo. Airo priin deao iut bl e rodolt

DH Blsbmfts ropirtstetblm tfet tforo woro 2x airo prbveto BZIs (rebsblm et coest $5::A) tfel puhcbd

innorblms bl 8:50.

]fbco aely in tfoso ulbdirls wbcc surocy privo ti ho troaol`iuscy vecuehco, ol`urblm diapelbos, wo

hocbovo tfet siao in tfoa wbcc ho oxpiso` es litfblm airo tfel firsos wbtf stbdks tepo` ti tfobr foe`s

(ir es Hrydo Xihorts et IEP werlo`,Howero in dilnusblm `ilkoys bl perty fets nir ulbdirls).

Pfbs vecuetbil blncetbil bs lit gust e ceto-stemo pfoliaolil obtfor. Too`-stemo vecuetbils fevo bldroeso`

et e pedo in ivor 8:% RiR nir tfo pest 5: yoers. ]o pro`bdt tfet tfo aerkot-evoremo soo` stemo

vecuetbil bl 8:5? wbcc ho ecaist 4x fbmfor tfel bt wes wfol wo rebso` iur nbrst blstbtutbilec nul` bl 8::=.

Pfet tekos wfet wiuc` fevo hool e 4x nul` bl 8::= el` aekos bt e 5x nul` bl 8:5? (essuablm li

bldroeso bl oxbt vecuos). El` bt aoels tfet tfo soo`-stemo bl`ustry es wfico wbcc soo e 4x `odroeso bl

roturls (emebl, essuablm li bldroeso bl oxbt vecuos) bl tfo loxt sovorec yoers.

]o `ilt fevo e drystec hecc -- el` wo delt nirodest tfo nuturo -- hut wo `i fevo e decducetir. Pfo

sbapco aetf in volturo blvostblm seys tfet ilcy twi luahors `otorablo el blvostaolts roturl7 tfooltry prbdo el` tfo oxbt prbdo. El` wfbco 8:50 sfiwo` e scbmft uptbdk bl titec oxbt vecuos nir tfo bl`ustry

(aeblcy `uo ti tfo $52H edqubsbtbil in ]fetsEpp), titec oxbt vecuos fevo lit bldroeso` elywforo loer

tfo pedo in oltry vecuos. Bl`oo`, tfo titec vecuo in A&E oxbts bl 8:54 wes coss tfel bt wes bl 8::=, el`

puhcbd aerkots stbcc roaebl rocetbvocy dciso` ti todflicimy diapelbos.

Rot tfo ailoy diltbluos ti nciw. Cbabto` pertlors diaabtto` ivor $0H in depbtec ti soo`-stemo abdri-

^Ds bl tfo cest niur yoers, droetblm ivor 8:: low abdri-^D nul`s. Pfet roprosolts el ecaist 5:x

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7/21/2019 First Round 2015 Q1 LP Letter

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Pfo blniraetbil dilteblo` bl tfbs cottor bs dilnb`oltbec el` bs bltol`o` sicocy nir uso hy tfo cbabto` pertlors inNbrst Xiul` Depbtec, tfbs ropirt aey lit ho ro`bstrbhuto` ir ropri`udo` bl wfico ir bl pert.

bldroeso bl nul`blm covocs nria tfo prbir niur-yoers. Bl emmrometo, bt eppoers tfoso cbabto` pertlors (el`

molorec pertlors) ero aekblm e hot -- spodbnbdeccy tfet oxbt vecuetbils wbcc sferpcy `ovbeto nria fbstirbdec

evoremos bl tfo diablm yoers.

Ilo diuc` dro`bhcy ermuo tfet tfbs wbcc feppol -- tfet tfo Bltorlot bs nbleccy bapedtblm aegir pirtbils in

tfo pipucetbil (wbtf e hbccbil Bltorlot-dillodto` saert pfilos) el` aegir pirtbils in M@Z (sudf eso`udetbil, foectf dero, nii`, trelspirtetbil) -- el` tfet tfbs wbcc rosuct bl diapelbos tfet droeto

auctbpcos in tfo vecuo tfet prbir diapelbos `b`. Ir, ovol bn tfo durrolt ulbdirls `ilt oxporboldo e

tre`btbilec oxbt nir aely yoers, tfo bldroeso bl sodil`ery secos wbcc privb`o oercy sferofic`ors wbtf

cbqub`bty tfet diapolsetos nir tfo cedk in A&E/BZI mriwtf.

Ba lit audf in e meahcor, hut wfol Ba bl ^omes ir Etceltbd Dbty B `i pcey e cbttco hcedkgedk. El` wfol

B sbt `iwl et tfo tehco, B kliw tfet bn B pcey hy tfo hiik tfo fiuso fes e ?8% dfeldo in wbllblm. Ba

dianirtehco wbtf tfiso i``s, el` B feppbcy sbt `iwl ti pcey. Liw sey tfet B roturl ti tfo seao desbli e

now ailtfs cetor el` sbt et tfo seao tehco. Oxdopt tfbs tbao tfo fiuso fes el 6:% dfeldo in wbllblm

el` tforos li sbml toccblm ao tfet tfo i``s fevo dfelmo`. Pfo meao bs protty `bnnorolt, rbmft9

Bn ilo bs ewero tfet tfo i``s fevo dfelmo` el` stbcc dfiisos ti sbt `iwl et tfo tehco (aeyho hodeuso

tfoy fevo e low stretomyir tfoy diult der`s), tfol bts pornodtcy roesilehco nir tfoa ti diltbluo ti

pcey. Gust cbko bts pornodtcy nblo ti blvost et 4x fbmfor oltry prbdos bn yiu hocbovo tfet oxbt prbdos wbcc sfiw

e dirrospil`blm (ir mroetor) bldroeso -- ir bn yiu hocbovo tfet yiu ero e 4x hottor pbdkor tfel itfor

nbras. Pfet seb`, wo wirry tfet aely blvostirs (hitf ^Ds el` CZs) ero stbcc sbttblm `iwl et tfo

aotepfirbdec hcedkgedk tehcoel` tfoy fevolt edtueccy nbmuro` iut (ir hool tic`) tfet tfo aetf fes

dfelmo`. El` tfets e rodbpo nir e he` lbmft et tfo desbli.

Iur ^bow

Bts vory fer` ti tbao tfo aerkot il obtfor ol` in e dydco. Pforo woro blvostirs bl 522> wfi hocbovo`

tfet tfo Bltorlot `it dia aerkot wes nritfy, hut bn tfoy fe` dfisol ti sbt tfo aerkot iut (el` lit

blvost bl 522= el` 5226) tfoy wiuc` fevo absso` twi in tfo host yoers bl volturo depbtec fbstiry.

Dilvorsocy, wfol tfo aerkot wes perecyzo` wbtf noer bl 8::= el` 8::6 el` aely blvostirs set il tfo

sb`ocblos, Nbrst Xiul` diltbluo` ti `opciy depbtec el` aeko low blvostaolts, e``blm aely strilm

diapelbos ti iur diaaulbty (cbko Epploxus - e rodolt ulbdirl).

Fiwovor, ilo in tfo koy cossils tfet B tiik ewey nria tfo `it dia dresf in 8::: wes tfet e cit in

ailoy wes cist wfol poipco (ir nul`s) ae`o aoelblmnuc dfelmos ti tfobr stretomy et el oxtroao ol` in

e dydco. Pfo nul`s tfet kopt tfobr nul` sbzos el` blvostaolt pedo tfo seao `urblm tfo `it dia hiianero` audf hottor tfel tfiso wfi dfiso ti trbpco tfobr nul` sbzo, ti `reaetbdeccy bldroeso tfobr evoremo

dfodk sbzo, ir ti eddocoreto tfobr blvostblm pedo. Bl`oo`, tforo woro volturo nbras wfi rebso` nul`s bl

5222 tfet woro 4x cermor tfel tfobr prbir nul`sel` `opciyo` tfo oltbro nul` bl 2 ailtfs.

Ti ovol tfiumf tforos ecaist e 5:x bldroeso bl tfo evebcehbcbty in depbtec nir soo`-stemo nul`s rbmft liw,

wovo dfisol lit ti aetorbeccy bldroeso iur nul` sbzo (iur durrolt nul` bs gust 8.6% cermor tfel iur prbir

nul`). El` wfbco tforo fes hool e 0x bldroeso bl tfo luahor in diapelbos mottblm soo` nul`blm, wo

7/21/2019 First Round 2015 Q1 LP Letter

3/4

Pfo blniraetbil dilteblo` bl tfbs cottor bs dilnb`oltbec el` bs bltol`o` sicocy nir uso hy tfo cbabto` pertlors inNbrst Xiul` Depbtec, tfbs ropirt aey lit ho ro`bstrbhuto` ir ropri`udo` bl wfico ir bl pert.

fevolt bldroeso` iur pedo. ]o hocbovo tfet mroet diapelbos oaormo `urblm hitf hiia tbaos el` hust

tbaosel` tfet stbdkblm ti iur blvostaolt ai`oc (el` stretomy) bs ospodbeccy bapirtelt `urblm hitf ol`s

in tfo dydco.

Fbstiry fes sfiwl tfet mroet nul`s del dilsbstoltcy pri`udo mroet roturls ovol `urblm e piir aerkot

olvbrilaolt. ]o rodimlbzo tfet woro lit baaulo tiaerkot roturls. El` woro ewero tfet fbmforoltry prbdos (wfbdf wovo hool peyblm) wbcc aeko bt fer`or ti moloreto tfo roturls tfet wo (el` yiu)

oxpodt wbtfiut el bldroeso bl oxbt prbdos. Fiwovor, mbvol tfo cermor sbzo in iur nul` rocetbvo ti itfor

soo` stemo blvostirs, iur oxporboldo blvostblm tfriumf hucc el` hoer aerkots, tfo piwor in iur hrel`

el` iur ulbquo nidus il hubc`blm e `bnnoroltbeto` pcetnira el` diaaulbtywo hocbovo tfet woro

eailm tfo host pisbtbilo` soo`-stemo nbras ti suddoo` bl e tiumf aerkot.

Nbleccy, wo tfblk tfet tforos roec piwor bl ul`orstel`blm tfo aetf in tfo aerkot. B hocbovo tfet aely in

tfo low drip in soo` blvostirs aey lit ho ewero in tfo hot tfoyro aekblm tfoyro lit oxpcbdbtcy

niduso` il tfo lowaetf tfet rosucts nria bldroesblm oltry prbdos. ]o ero. ]o ul`orstel` tfet iur

dilvbdtbil bl iur `odbsbils loo`s ti ho aoelblmnuccy fbmfor bl ir`or ti blvost et aoelblmnuccy fbmfor

vecuetbils. El` wovo spolt aely yoers wirkblm ti `bstblmubsf iursocvos bl el bldroesblmcy driw`o`

aerkot.

Pfo Nbrst Uuertor

]fbco wo diltbluo ti `opciy depbtec el` blvost bl low diapelbos, wovo tfiumftnuccy sciwo` iur pedo.

@urblm tfo cest twi quertors (U0 8:50 el` U5 8:5?), wo nul`o` e titec in tol low blvostaolts. Pfbs bs

iur sciwost twi-quertor porbi` bl sbx yoers (b.o., sbldo U0 8::6 el` U5 8::2). ]o `ilt oxpodt tfet

iur pedo wbcc poraeloltcy roaebl tfbs ciwecroe`y ilo ailtf blti U8, wovo sool el uptbdk bl low

blvostaolts.

]o hocbovo tfet mroet diapelbos del ho sterto` bl ely aerkot, el` wo fevo trbo` ti roaebl `bsdbpcblo`

(bl el ul`bsdbpcblo` aerkot) el` niduso` il tfo twi luahors tfet aettor7 oltry prbdo el` oxbt prbdo.

Nul` Zorniraeldo

]o aivo` ti e low CZ ropirtblm niraet tfbs quertor. Xetfor tfel sol` e sopereto cottor nir oedf nul`

yiuro blvosto` bl, wovo dfisol ti wrbto tfbs ilo cottor ti fbmfcbmft siao tfiumfts il tfo aerkot --

el` ti privb`o e Nul` Tdiroder` nir oedf nul`.

Pfo Tdiroder`s diltebl Mriss el` Lot nul` porniraeldo, es wocc es e suaaery in tfo puhcbdcy ropirto`quertorcy edtbvbty bl oedf nul`. ]fbco wo ero feppy wbtf (aist in) iur nul`sporniraeldos, wo welt ti

stross tfet aist in tfo vecuetbil bldroesos ero ulroecbzo`, el` ultbc tfoso diapelbos ol` up bl tfo

roecbzo` dicual (tfriumf BZI, A&E ir sodil`ery secos) tfo vecuetbils ero gust pepor bldroesos. Iur

vecuetbil picbdy roqubros us ti vecuo iur pirtnicbi diapelbos heso` il aerkot prbdosel` bl ti`eys

aerkot wo ero sooblm diapelbos rebso nicciw-il nbleldblm riul`s et audf fbmfor prbdos tfel wo fevo

sool honiro. Zest oxporboldo fes sfiwl tfet vecuetbils del dfelmo sbmlbnbdeltcy ivor tbaoel` `ospbto

7/21/2019 First Round 2015 Q1 LP Letter

4/4

Pfo blniraetbil dilteblo` bl tfbs cottor bs dilnb`oltbec el` bs bltol`o` sicocy nir uso hy tfo cbabto` pertlors inNbrst Xiul` Depbtec, tfbs ropirt aey lit ho ro`bstrbhuto` ir ropri`udo` bl wfico ir bl pert.

iur host onnirts, wo oxpodt tfet sovorec in iur pirtnicbi diapelbos wbcc ol` up hoblm aerko`

`iwl ivor tbao(wbtf aely pitoltbeccy hoblm wrbttol inn oltbrocy).

Es ecweys, bn yiu fevo ely quostbils ir roqubro ely e``btbilec blniraetbil, pcoeso `ilt fosbteto ti

diltedt ao.

Host romer`s,

Gisf Kipocael