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PricewaterhouseCoopers/ National Venture PricewaterhouseCoopers/ National Venture Capital Association Capital Association MoneyTreeMoneyTree™™ ReportReportbased on data from Thomson Reutersbased on data from Thomson Reuters
Shaking the MoneyTree™™
Q3 UpdateOctober 2009
Q3 2009Slide 2PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
PricewaterhouseCoopers / National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
David Silverman
National Co-Leader - Emerging Company Practice,
PricewaterhouseCoopers LLP
Q3 2009Slide 3PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
About The Report
• PricewaterhouseCoopers and the National Venture Capital Association produce the MoneyTree Report™ based on data from Thomson Reuters
• ‘Core’ measure of equity investments in venture-backed companies in the United States
• Companies have received at least one round of financing involving a professional VC firm or equivalent
• Captures: tranches, not term sheets, foreign VCs, qualified private placement
• Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc.• MoneyTree™ Report in its 15th year• Results online at www.pwcmoneytree.com, www.nvca.org,
www.venturexpert.com
Q3 2009Slide 4PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
MoneyTree Total Investments: Q1 2001 – Q3 2009
# of
Deals
2001 2002 2003 2004 2005 2006 2007 2008 2009
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1,283 1,215 1,004 984 843 855 694 722 705 743 721 791 720 855 696 846 736 834 798 825 882 976 921 964 874 1,061 1,011 1,076 1,015 1,067 994 904 616 657 637
Q3 2009Slide 5PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
MoneyTree Total Investments: 1980 – YTD 2009
Annual Venture Capital Investments 1980 to YTD 2009
Q3 2009Slide 6PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Investments by Region: Q3 2009
Region# of
Deals
% Change $ from Q2’09
Silicon Valley 210 62.82%
New England 86 14.74%
NY Metro 50 -10.97%
Northwest 30 82.79%
LA/Orange County 33 33.19%
San Diego 32 -6.17%Southeast 33 -36.94%Texas 23 170.13%DC/Metroplex 21 25.14%Midwest 40 -22.94%North Central 13 -3.29%Philadelphia Metro 25 -42.05%Colorado 13 -76.47%SouthWest 14 -69.46%Upstate NY 1 207.69%South Central 11 -20.23%Sacramento/N.Cal 2 -80.23%Grand Total 637 16.78%
Q3 2009 Total: $4,808.8 million in 637 deals
Q3 2009Slide 7PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Investments by Region –Quarterly Percent of Total U.S. Investments
Top U.S. Regions Q3 ‘08– Q3 ‘09
Q3 2009Slide 8PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Investments by Industry: Q3 2009
Industry# of
Deals% Change $from Q2 ’09
Biotechnology 104 -4.42%
Industrial/Energy 52 89.34%
Software 128 -8.52%
Medical Devices and Equipment 71 -5.89%
Media and Entertainment 60 269.40%
IT Services 48 -10.87%
Networking and Equipment 25 17.65%
Semiconductors 21 -14.20%
Electronics/Instrumentation 18 55.42%
Consumer Products and Services 23 149.36%
Telecommunications 32 -17.42%
Financial Services 8 485.55%
Computers and Peripherals 13 -39.55%
Retailing/Distribution 5 101.13%
Business Products and Services 20 -17.10%
Healthcare Services 7 -56.54%
Other 2 -62.54%
TOTAL 637 16.78
Q3 2009 Total: $4,808.8 million in 637 deals
Visit www.pwcmoneytree.com for Industry definitions
Q3 2009Slide 9PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Reuters
Investments by Industry: Q3 2009 – NY Metro($ in millions)
$46.290
$0.940
$18.568
$18.000
$0.060
$27.575
$6.040
$69.135
$8.600
$44.901
$2.800
$6.043
$0 $20 $40 $60 $80 $100
Consumer Products and Services
Healthcare Services
Business Products and Services
Electronics/Instrumentation
Telecommunications
Media and Entertainment
Networking and Equipment
Industrial/Energy
IT Services
Business Products and Services
Software
Biotechnology
Q3 2009 Total: $251.26 million in 50 dealsVisit www.pwcmoneytree.com for Industry definitions
Q3 2009Slide 10PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Investments by Industry –Quarterly Percent of Total U.S. Investments
Top 5 Industries – Q3 ‘08 to Q3 ‘09
Q3 2009Slide 11PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Reuters
(% of Total Dollars)
22.7
0%
5.20
%
21.6
0%
4.65
%
9.37
%
17.0
0%
9.60
%
10.9
0%
7.17
%
13.0
3%
18.5
0%
5.14
%
20.3
0%
7.42
%
12.3
9%
13.7
0%
0%
32.4
0%
11.6
6%
10.3
0%
7.39
%
8.20
%
20%
19.3
5%
7.30
%
3.40
%
0%
27.5
0%
0%
7%
0%
5%
10%
15%
20%
25%
30%
35%
Biotechnology Industrial/Energy Software Medical Devices &Equipment
Media & Entertainment
2006 2007 2008 Q1 2009 Q2 2009 Q3 2009
Investments by Industry –Quarterly Percent of Total NY Metro Investments
Top 5 Industries – 2006 to Q3 ‘09
Q3 2009Slide 12PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Investments by Stage of Development: Q3 2009
Stage of Development# of
Deals
% Change in $ Amount
from Q2 2009
Later Stage 168 35.14%
Expansion Stage 185 27.13%
Early Stage 198 -0.87%
Startup/Seed 86 -10.88%
Total 637 16.78%
Q3 2009 Total: $4,808.8 million in 637 deals
Q3 2009Slide 13PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Reuters
Investments by Stage of Development: Q3 2009 – NY Metro($ in millions)
$11.7
$56.2
$49.5
$133.9
$0 $50 $100 $150
Startup/Seed
Early Stage
Expansion
Later Stage
Stage of Development# of
Deals
Later Stage 11
Expansion Stage 15
Early Stage 19
Startup/Seed 5
Total 50
Q3 2009 Total: $251.26 million in 50 deals
Q3 2009Slide 14PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
First Sequence Financing –Number of Deals
First Sequence Deals
Q3 2009Slide 15PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
First Sequence Financing –Investment Amount
First Sequence Investments
Q3 2009Slide 16PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
First Sequence Financing –Percent of Total U.S. Investments
Q3 2009Slide 17PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Stage of Development –Quarterly Percent of Total First Sequence Dollars
Stage Development – Q3 2008 to Q3 2009
Q3 2009Slide 18PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Median Deal Size vs. Mean Deal Size –Quarterly Total U.S. Investments
Q3 2009Slide 19PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Post-Money Valuations – Early Stage Companies Q2 2002 to Q2 2009
12 Month Average
Source: Thomson Reuters
Q3 2009Slide 20PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Post-Money Valuations – Expansion Stage Companies Q2 2002 to Q2 2009
12 Month Average
Source: Thomson Reuters
Q3 2009Slide 21PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Post-Money Valuations – Later Stage Companies Q2 2002 to Q2 2009
12 Month Average
Source: Thomson Reuters
Q3 2009Slide 22PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q3 2009 – Most Active Venture InvestorsVenture Capital Firm Location Total DealsNew Enterprise Associates Baltimore, Maryland 20Polaris Venture Partners Waltham, Massachusetts 17U.S. Venture Partners Menlo Park, California 16Draper Fisher Jurvetson Menlo Park, California 14Kleiner Perkins Caufield & Byers Menlo Park, California 14Sequoia Capital Menlo Park, California 13ARCH Venture Partners Chicago, Illinois 11Venrock Associates Palo Alto, California 11Menlo Ventures Menlo Park, California 10Sigma Partners Menlo Park, California 10Domain Associates LLC Princeton, New Jersey 9Flagship Ventures Cambridge, Massachusetts 9Highland Capital Partners LLC Lexington, Massachusetts 9Rho Ventures New York, New York 9Benchmark Capital Menlo Park, California 8CMEA Capital San Francisco, California 8DCM Menlo Park, California 8InterWest Partners Menlo Park, California 8Kansas Technology Enterprise Corporation Topeka, Kansas 8North Bridge Venture Partners San Mateo, California 8
Q3 2009Slide 23PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q3 2009 – Top 10 Deals in NY Metro
Company Location Industry Stage $ Invested
Gilt Groupe, Inc. New York, NY Consumer Products and Services Expansion $43.0
**Confidential** Short Hills, NJ Telecommunications Expansion $20.0
Tremor Media, Inc. (FKA: Tremor Network, Inc.) New York, NY Telecommunications Expansion $20.0
Tervela, Inc. New York, NY Networking and Equipment Expansion $18.0
TxVia, Inc. (FKA: TxCore, Inc.) New York, NY Software Expansion $15.5
Cadent, Inc. Carlstandt, NJ Software Later $15.0
TradeCard,Inc. (FKA: Full Service Trade System, Inc.) New York, NY Software Later $13.0
MediaMath, Inc. New York, NY IT Services Early $10.0
TRAFFIQ, Inc. New York, NY IT Services Early $9.99
5min, Ltd. New York, NY Media & Entertainment Early $7.5
Q3 2009Slide 24PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Analysis of Venture-Backed IPO and M&A Activity
Quarter/Year Number of IPOs* Total Venture-Backed Offer Amount ($M)
Average Venture-Backed IPO Offer amount ($M)
Number of Venture-backed M&A deals
Average Venture-Backed M&A deal size**
2004 94 11,378.0 121.0 346 85.32005 57 4,485.0 78.7 351 187.02006 57 5,117.1 89.8 369 105.02007 86 10,326.3 120.1 372 170.92008 Q1 5 282.7 56.6 108 127.22008 Q2 0 0.0 0.0 84 126.72008 Q3 1 187.5 187.5 88 96.32008 Q4 0 0.0 0.0 62 140.4
2008 6 470.2 78.4 342 120.5
2009 Q1 0 0.0 0.0 63 47.0
2009 Q2 5 720.7 144.1 64 197.7
2009 Q3 3 572.1 190.7 62 57.5
Source: Thomson Reuters and National Venture Capital Association
* Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile**Only accounts for deals with disclosed values
Q3 2009Slide 25PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Venture Capital FundraisingYear First Time Funds Follow-On Funds Total Number of Funds VC Raised ($M)
2004 64 154 218 19,154.4
2005 68 174 242 28,962.7
2006 57 185 242 31,925.0
2007 62 189 251 36,064.9
2008 51 173 224 28,604.6
Quarter
Q3 ’07 15 62 77 8,595.8
Q4 ’07 27 59 86 12,322.5
Q1 ’08 12 62 74 7,228.4
Q2 ’08 23 59 82 9,284.5
Q3 ’08 14 49 63 8,497.0
Q4 ’08 12 37 49 3,594.7
Q1 ’09 3 47 50 4,810.9
Q2 ’09 8 19 27 1,965.5
Q3 ’09 4 13 17 1,557.8Source: Thomson Reuters & National Venture Capital AssociationData current as of October 12, 2009
Closing Thoughts & Comments
David SilvermanPartnerPhone: 646-471-5421Email: david.silverman@us.pwc.com
© 2009 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
PwC
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