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Liquidity & Returning Capital
Request a free [email protected]
John Gabbert Founder & [email protected]
THE PITCHBOOK PLATFORMThe financial information technology trusted by leading
investors, companies and advisors
21,860LPs
94,438Commitmen
ts
150,137GPs/
Investors
33,460Funds
514,170
Performance Data
Lines696,194Portfolio
Companies
491,333Transaction
s
124,748Valuations
25,463Advisory
Firms
1,097,011
People
VC fundraising & deal trends
LPs have been optimistic on the VC asset class, therefore fundraising
benefitsGloba l VC fundra i s ing
*Through 12/31/2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$0
$10
$20
$30
$40
$50
$60
0
50
100
150
200
250
300
350
400
450
$53B
$22B
$48B
392
318
393
363
Total capital raised ($B) U.S. ($B) Europe ($B) RoW ($B)
$53B
Lots of capital being invested…but in fewer and bigger deals
Globa l VC dea l flow
*Through 2/17/2016
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016$0
$20
$40
$60
$80
$100
$120
$140
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
$46B $35B
$99B
$21B
5,596
5,703
12,511
10,088
973
Capital invested ($B) U.S. ($B) Europe ($B) RoW ($B)
$119B
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$0
$20
$40
$60
$80
$100
$120
$140
$45.8B $42.2B
$59.3B
$99.4B
$119.0B
$44.3B $39.0B
$42.9B$35.3B $38.7B
“Tourists” filling VC funding gapGloba l VC fund con t r i bu t ions vs . g loba l VC cap i ta l
i nves ted
*Through 12/31/2015
Non-traditional VC investors account for an increasing share of VC $ spend (about 66%)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$0
$5
$10
$15
$20
$25
$30
$35
0
20
40
60
80
100
120
$0.03B $0.3B $1.3B $2.6B $1.2B$4.8B $2.1B
$4.1B
$19.9B
$29.8B
14
77
8
24 1926
86
113
68 US31 Asia12 Eu-rope2 ROW=113
“Unicorn” rounds have skyrocketed
VC rounds va lued over $1 b i l l i on
*Through 12/31/2015
$66.1B invested across only 189 companies since 2006 (11% of $).
Big increase in seed rounds over last 5 yrs.
Globa l VC dea l coun t by type
*Through 12/31/2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
1,000
2,000
3,000
4,000
5,000
6,000
7,000
528 1,144
4,027 3,921
2,8703,3683,785
5,3115,747
4,777
1,7002,099
2,585 2,843
2,441
Seed round valuations reach levels previously seen at series A
Med ian p re -money va lua t ion ($M) by se r ies
*Through 12/31/2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$3.2$4.8 $4.9 $5.5
$7.3 $6.7$9.6
$12.7$15.4
$22$19
$26
$34
$42
Seed Series A Series B
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
$45.2 $38.1
$56.7 $60.2$78.3
$80.0$65.8
$99.0
$136.4
$184.0
Series C Series D+
2.8X
Median late stage valuations more than double from 2010 levelsMed ian p re -money va lua t ion ($M) by se r ies
*Through 12/31/2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
11,721
15,844
21,280
29,565
34,389
Total2011-2015
Year of Invest-ment
Explosion in # of funded companies require exits at some point, big % not
l ikely to find itGloba l VC company inven to ry
*Through 12/31/2015
Nearly 11,000 companies with backing for more than 5 years. ~23,000 more seeking exit in the next 5 years
Under $5M $5M - $10M $10M - $20M $20M - $50M $50M - $75M $75M - $100M $100M+0%
10%
20%
30%
40%
50%
60%
1.5% 2.0% 3.2%
7.8%
21.7%
35.1%
49.7%
Total VC Capital Raised
A glut of heavily funded companies will be seeking public market exits
% o f VC Backed Cos to I PO by VC Cap i ta l Ra i sed (2006 -2015)
*Through 12/31/2015
800+ co’s raised $100M+ yet to be exited.
850 462 co’s respectively
VC exit trends
2014 was a banner year for VC exit activity, 2015 stil l very strong
Globa l VC ex i t flow
*Through 2/17/2016
Avg. exit sz:$104M
Avg. exit sz:$180M
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016$0
$20
$40
$60
$80
$100
$120
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
$60B
$23B
$112B
$6B
984
716
1,702
1,520
141
Total exit value ($B) U.S. ($B) Europe ($B) RoW ($B)
$71.3B
2015 exits gradually cooled off as public markets slowed
Globa l VC ex i t flow by quar te r
*Through 12/31/2015
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q2010 2011 2012 2013 2014 2015
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
0
50
100
150
200
250
300
350
400
450
500
$8B
$15B$11B $12B
$20B
$46B
$16B
$23B262
328 358 344
441
387
330
After rebounding post financial crisis, IPOs fell out of favor sharply
in 2015Globa l VC ex i t coun t by type & IPO % o f ex i t s
*Through 2/17/2016
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20160
200
400
600
800
1,000
1,200
1,400
1,600
0%
5%
10%
15%
20%
25%
20.8%
10.3%
16.2%
9.7%
4.3%
779
1,039
1,4271,373
135205 119275
1476
IPOs as % of VC exits Acquisition/buyout count IPO count
IPO values down, Acq. values fairly steady
Med ian ex i t va lua t ion ($M) by ex i t t ype
*Through 2/17/2016
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016$0
$50
$100
$150
$200
$250
$300
$350
$400
$286.0
$363.1
$210.4
$240.2
$160.6
$51.0$51.2 $50.1 $41.2
$49.0
IPO Acquisition/buyout
Top quartile exit valuations have steadily increased over the decade
Globa l VC ex i t s i ze quar t i l e s
*Through 2/17/2016
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016$0
$20
$40
$60
$80
$100
$120
$140
$17.2$14.4
$17.5$13.6
$18.0
$49.3$50.0 $54.0
$47.7$50.0
$111.3$120.3 $125.8 $125.0
$130.0
25th percentile Median
European exits seem to be more capital efficient in recent years
Med ian ex i t va lua t i on / to ta l cap i ta l r a i sed by ex i t yea r
*Through 12/31/2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
4.56x
2.13x
4.58x3.91x
4.84x
3.27x
6.69x6.29x
North America Europe
Median unicorn: 5.67x
Last 4 years Ave. VC ownership at exit: 51%
2014 returned record $54 bil l ion to LPs, 2015 likely to be similar
Globa l VC fund cashflows
*Through 6/30/2015
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
-$60
-$40
-$20
$0
$20
$40
$60
$12B $13B $13B
$27B
$39B
$54B
$35B
-$15B-$17B
-$30B
$5B
Contributions ($B) Distributions ($B)
Recent vintages’ IRRs are way up…Globa l VC fund IRR quar t i l e s
*Through 6/30/2015
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-20%
-10%
0%
10%
20%
30%
40%
-7.7%
1.0%4.8% 6.6%2.3% 0.4%
8.9%
19.6% 18.4%
7.0% 6.3%
16.1%
34.9%38.9%
IRR 25th IRR Median IRR 75th
…however…
Recent vintages hold large majority of value in current portfolio
Globa l VC fund avg . TVP I & RVP I % o f TVP I
*Through 6/30/2015
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
1.6x
1.8x
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1.15 1.13 1.56 1.50 1.33 1.15
26.4%
55.3%62.8%
72.3%
89.9%96.9%
Avg. TVPI Avg. RVPI % of TVPI
2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
11,721
15,844
21,280
29,565
34,389
Total2011-2015
Year of Invest-ment
Explosion in # of funded companies require exits at some point, big % not
l ikely to find itGloba l VC company inven to ry
*Through 12/31/2015
Nearly 11,000 companies with backing for more than 5 years. ~23,000 more seeking exit in the next 5 years
Top exiters 2014 & 2015 – European HQd companies
Firm Name Exit Count
High-Tech Gründerfonds 12Enterprise Ireland 9Deutsche Telekom Strategic Invs. 8KfW IPEX-Bank 8Life Sciences Partners 8Holtzbrinck Ventures 8Vækstfonden 7Tekes 7Seventure Partners 7Gimv 7Almi Invest 7
Firm Name Exit Count
Scottish Enterprise 11Enterprise Ireland 9Verdane Capital 8High-Tech Gründerfonds 8CM-CIC Capital Privé 6Albion Ventures 6Seventure Partners, SEED Capital Denmark, Kreos Capital, KfW IPEX-Bank, Index Ventures, Draper Esprit, Edmond de Rothschild Investment Partners, Bonsai Venture Capital, Amadeus Capital Partners, Acton Capital Partners, Almi Invest
Tied at 5
2014 2015
Top exiters 2014 & 2015 – U.S. HQd companies
Firm Name Exit Count
New Enterprise Associates 30SV Angel 29Kleiner Perkins Caufield & Byers 29Accel Partners 27Y Combinator 25GV 24Techstars 22Western Technology Investment 21Battery Ventures 21Greylock Partners 20Bessemer Venture Partners 20
2014 2015
Firm Name Exit Count
SV Angel 31New Enterprise Associates 25500 Startups 25Western Technology Investment 24Y Combinator 19Kleiner Perkins Caufield & Byers 19Intel Capital 19Greylock Partners 19
Techstars, Sequoia Capital, Khosla Ventures, Great Oaks Venture Capital
Tied at 15
US +1 206.623.1986UK +44 207.190.9809
Test drive [email protected]
Software companies consistently account for over 1/3 of VC exits
Globa l VC ex i t coun t by indus t ry
*Through 12/31/2015
2006 2007 2008 2009 2010 2011 2012 2013 2014 20150%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
28.0% 35.2% 36.2% 34.3% 35.3%
11.6% 8.7% 9.8% 12.8% 12.9% Commercial Svcs.
Consumer Goods & Rec.
Energy
Healthcare
IT Hardware
Media
Pharma & Biotech
Software
Other
SaaS and mobile models are driving software exits for VCs2014 – 2016 YTD so f tware ex i t s by ve r t i ca l
*Through 2/17/2016
45.6%
24.3%
5.8%
4.6%
4.5%4.0%
3.1%2.9%
5.2%
SaaSMobileSecurityMarketing TechBig DataFinTechE-CommerceAdTechOther