VentureSource

U.S. -- 1Q 2014

VentureSource The following report presents Dow Jones VentureSource’s quarterly findings for U.S.

venture capital fundraising, investment, valuation, and liquidity. The included charts and

graphs offer a comprehensive view of the trends currently affecting the venture capital

market.

Highlights for 1Q 2014 include:

U.S. venture capital fundraising doubles in amount raised from last quarter, but number of funds

remains level;

Venture capital investment was at its highest since 1Q 2001;

Median pre-money valuation increased 59% from 4Q 2014;

Venture-backed mergers and acquisitions (M&As) reach highest quarterly figure since 3Q 2000. Initial

public offerings (IPOs), however, took a dip.

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VentureSource

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Amount Raised ($B) $7.12 $3.59 $2.92 $6.75 $7.45 $6.57 $5.03 $2.93 $4.56 $6.75 $4.07 $4.77 $9.64

Number of Funds 40 44 50 52 55 46 53 51 56 57 67 73 73

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$12.00U.S. VC Fundraising (2011 – 2014) Based on multiple closings

Venture Fundraising in U.S. Rises Significantly from 4Q 2013

73 funds garnered $9.6 billion in 1Q 2014, more than doubling the amount raised in the previous quarter, while

number of funds remained stable.

Technology Crossover Ventures VIII LP was the largest U.S. venture capital fund of 1Q 2014 raising $2.2 billion

and accounting for 23% of the total amount raised during the quarter.

Median U.S. fund size was $175 million.

FUNDRAISING

3

VentureSource Largest VC Funds Raised in 1Q 2014

Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type

TCMI Inc. Technology Crossover Ventures

VIII LP $2,230.00 Palo Alto CA Closed

Late-stage venture capital

Venture Capital

Final

Andreessen Horowitz Andreessen Horowitz Fund IV

LP $1,500.00 Palo Alto CA Closed

Multi-stage venture capital

Venture Capital

Final

Founders Fund Management LLC

Founders Fund V LP $1,015.20 San Francisco CA Closed Multi-stage venture

capital

Venture Capital Final

Accel Partners Accel Growth Fund III LP $1,000.00 Palo Alto CA Closed Late-stage venture

capital

Venture Capital Final

Lightspeed Venture Partners Lightspeed Venture Partners X

LP $1,000.00

Menlo Park CA Closed

Multi-stage venture capital

Venture Capital

Final

FUNDRAISING

4

VentureSource

FINANCING

Equity Financings into U.S. –

based, VC-backed Companies

(2011 – 2014)

U.S. Venture Investment on the Rise in 1Q 2014

U.S.-based companies raised $10.7 billion from 862 venture capital deals in 1Q 2014, a 18% increase in capital

and a 10% decline in number of deals from the previous quarter.

In contrast with 1Q’13, amount invested registered a 44% increase, while number of deals dipped 3%.

Information Technology (IT) and Business and Financial Services are the strongest sectors, respectively with

32% and 25% share of total amount invested.

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Amount Raised ($B) $8.13 $9.19 $10.68 $8.16 $7.51 $9.32 $7.81 $8.96 $7.48 $8.50 $9.18 $9.10 $10.74

Number of Deals 835 933 953 914 888 1005 904 896 891 914 903 956 862

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VentureSource

Equity Financings into U.S.–based, VC–backed Companies, by Round Class

(2011 – 2014)

Number of Deals

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Restart 12 26 13 11 9 14 11 18 7 7 8 13 7

Later 271 286 296 292 252 307 281 282 263 287 272 277 282

Second 147 180 158 153 140 179 145 156 147 194 199 207 168

First 270 299 324 309 309 351 324 300 334 294 304 336 289

Seed 91 103 131 109 142 117 110 100 109 106 95 89 91

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400

FINANCING

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VentureSource

FINANCING

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Restart $0.09 $0.40 $0.23 $0.08 $0.09 $0.16 $0.23 $0.68 $0.08 $0.17 $0.08 $0.22 $0.29

Later $4.89 $4.67 $5.95 $4.73 $4.13 $5.11 $4.60 $4.37 $4.39 $4.89 $4.75 $5.04 $5.79

Second $1.45 $1.90 $1.97 $1.54 $1.01 $1.56 $1.27 $1.43 $1.25 $1.69 $2.05 $1.79 $1.75

First $1.30 $1.56 $2.10 $1.44 $1.41 $2.07 $1.38 $1.53 $1.53 $1.30 $1.45 $1.69 $1.44

Seed $0.07 $0.10 $0.12 $0.10 $0.10 $0.09 $0.09 $0.08 $0.06 $0.08 $0.08 $0.05 $0.05

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Equity Financings into U.S.–based, VC–backed Companies, by Round Class

(2011 – 2014)

Amount Raised ($B)

VentureSource

FINANCING

Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M)

(2011 – 2014)

Median Equity Deal Size ($M)

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Median Equity Deal Size ($M) $4.40 $5.00 $5.26 $4.00 $3.88 $4.70 $3.84 $4.27 $4.00 $5.00 $4.00 $4.15 $4.50

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VentureSource

210

38

158

12

171

19

246

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (1Q 2014)

IT saw the largest investment allocation, with 246 deals garnering $3.4 billion and accounting for 32% of total

equity investment.

The Business and Financial Services sector raised the second highest proportion of investment for 1Q’14: 210

deals accumulated $2.6 billion, up 15% in amount raised, but down 7% from respective 4Q’13 figures.

Healthcare placed third with $2.3 billion in 171 deals, a 1% drop from the previous quarter. The sector’s

investment figure represents a 21% share of total equity investment into U.S. VC-backed companies for the

quarter.

$1.8 billion were raised by Consumer Services in 158 deals, a decrease of 15% in deal flow, while capital

invested went up by 10%.

1Q'14 Industry Breakdown

By Number of Deals

1Q’14 Industry Breakdown

By Amount Raised ($B)

FINANCING

9

24%

2%

17%

3% 21%

1%

32%

Business and Financial Services

Consumer Goods

Consumer Services

Energy & Utilities

Healthcare

Industrial Goods & Materials

Information Technology

VentureSource

Co. Name Location Industry Group

Industry Segment

Industry Code Brief Description Close Date Round Type Raised ($M)

Round Investors (* denotes lead)

Cloudera Inc. Palo Alto, CA Information Technology

Software Database Software Provider of open source

database software. 3/31/2014 Corporate $740.00 Intel*

Lyft Inc. San Francisco,

CA Consumer Services

Travel and Leisure Travel

Arrangement/ Tourism

Provider of an on-demand ridesharing service platform.

3/10/2014 5th $250.00

Alibaba Group, Andreessen Horowitz, Coatue Management

LLC, Founders Fund Management LLC, Mayfield

Fund, Third Point Reinsurance Ltd.

AliphCom Inc. San Francisco,

CA Information Technology

Electronics and Computer Hardware

Consumer Electronics

Provider of audio and speech technologies and consumer

products for the mobile communications markets.

2/13/2014 Later $250.00 Rizvi Traverse Management

LLC*

TangoMe Inc. Mountain View, CA

Information Technology

Software Communications

Software

Provider of mobile video communication and

messaging applications. 3/20/2014 Corporate $215.00 Alibaba Group*

Intarcia Therapeutics

Inc. Boston, MA Healthcare Biopharmaceuticals

Biotechnology Therapeutics

Developer of therapeutic products for diseases that require long-term chronic

treatment.

3/27/2014 r4th $200.00

Farallon Capital Management LLC, Foresite Capital

Management LLC, Franklin Resources Inc., New Leaf

Venture Partners, Quilvest Ventures, RA Capital Management LLC*

Top 5 Deals into VC-backed Companies (1Q 2014)

FINANCING

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VentureSource

27 27

21 20 20

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New EnterpriseAssociates

500 Startups LP Khosla Ventures Google Ventures Kleiner PerkinsCaufield & Byers

Most Active Investors for U.S.-based, VC-backed Companies (1Q 2014)

FINANCING

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VentureSource

Amount Raised ($B) in 1Q 2014

by Primary Region

Number of Deals

by Primary Region

1Q 2014

2

166

17

47

38

80

321

28

35

47

73

Alaska/ Islands

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

Amount Raised ($B)

by Primary Region

1Q 2014

$0.004

$1.28

$0.12

$0.24

$0.31

$1.26

$5.68

$0.16

$0.32

$0.29

$0.67

Alaska/Islands

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

Number of Deals in 1Q 2014

by Primary Region

FINANCING

12

Alaska/Islands

Mid-Atlantic

Midwest Central

Midwest East

Mountain

New England

Northern California

Pacific Northwest

South Central

South East

Southern California

VentureSource

$0.13

$0.08

$0.21

$0.11

$0.19

$0.20

$0.21

$0.18

$0.93

$1.23

$5.67

Chicago Metro

Dallas-Fort Worth

Austin Metro

Seattle Metro

Orange County

San Diego Metro

Los Angeles Metro

Potomac

New York Metro

Boston Metro

San Francisco Bay Area

Amount Raised ($B) by Subregion

Subregion Breakout Amount Raised ($B)

Number of Deals

by subregion

1Q 2014

Amount Raised ($B)

by subregion

1Q 2014

Subregion Breakout

Number of Deals

11

9

18

22

16

20

31

38

95

69

320

Chicago Metro

Dallas-Fort Worth

Austin Metro

Seattle Metro

Orange County

San Diego Metro

Los Angeles Metro

Potomac

New York Metro

Boston Metro

San Francisco Bay Area

Number of Deals by Subregion

FINANCING

13

San Francisco Bay Area 320 $5.67

Boston Metro 69 $1.23

New York Metro 95 $0.93

Potomac 38 $0.18

Los Angeles Metro 31 $0.21

San Diego Metro 20 $0.20

Orange County 16 $0.19

Seattle Metro 22 $0.11

Austin Metro 18 $0.21

Dallas-Fort Worth 9 $0.08

Chicago Metro 11 $0.13

VentureSource

VALUATIONS

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Median Pre-money Valuation ($M) $20.27 $22.25 $28.50 $18.26 $18.05 $15.00 $29.88 $40.00 $10.49 $24.20 $17.00 $22.00 $35.00

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$45.00

Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M)

(2011 – 2014)

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VentureSource

LIQUIDITY

Exit Opportunities for U.S.

VC-backed Companies

(2011 – 2014)

Venture M&A and IPO Market Activity in the U.S. during 1Q 2014

Mergers and acquisitions (M&As) of venture-backed companies decreased by 2% from 4Q 2013, with 119

deals garnering $17 billion.

38 venture-backed IPOs took place during 1Q 2014, the highest figure in a quarter since 3Q 2000 when 75

were completed.

0 20 40 60 80 100 120 140 160

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

4Q'12

1Q'13

2Q'13

3Q'13

4Q'13

1Q'14

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

IPOs 11 14 11 10 20 12 10 8 9 20 25 20 38

M&As 140 115 146 141 111 121 102 125 97 90 118 122 119

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VentureSource

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Amount Paid ($B) $11.74 $11.79 $13.55 $9.48 $10.46 $12.00 $11.70 $8.82 $5.47 $8.95 $10.74 $12.45 $17.07

Number of M&As 140 115 146 141 111 121 102 125 97 90 118 122 119

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$18.00U.S. VC-backed M&A Activity

(2011 - 2014)

U.S. VC-backed M&As (2011-2014)

119 M&As of venture-backed companies in U.S. garnered $17 billion during 1Q 2014, the highest quarterly

figure since 3Q 2000, when $23 billion were raised.

In contrast with 4Q 2013, when a total of 122 transactions accumulated $12 billion, though the number of M&As

fell by 2%, the amount raised rose by 37%.

The largest M&A of the quarter was Nest Labs Inc., which was acquired by Google Inc. (Nasdaq: GOOG) for

$3.2 billion.

LIQUIDITY

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VentureSource Top 3 U.S. M&As (1Q 2014)

Company Name

Location Brief Description Industry Code Industry Segment

Industry Group

Close Date Round Type Amount

Paid ($M) Acquirer

Nest Labs Inc. Palo Alto, CA

Manufacturer of energy efficient home products, such as thermostats and

smoke alarms.

Appliances/Durable Household Goods

Household and Office Goods

Consumer Goods 2/7/2014 Acquisition $3,200.00 Google Inc.

AutoTrader.com Inc.

Atlanta, GA Provider of a digital

automotive marketplace. Procurement/Supply

Chain Business Support

Services Business and

Financial Services 1/3/2014 Acquisition $1,800.00 Cox Enterprises

Mandiant Corp. Alexandria, VA

Developer of threat detection and response security software and

services.

Network/Systems Management Software

Software Information Technology

1/2/2014 Acquisition $1,000.00 FireEye Inc.

LIQUIDITY

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VentureSource

U.S. VC-backed IPO Activity

(2011 - 2014)

U.S. VC-backed IPOs (2011-2014)

38 venture-backed companies raised $2.9 billion through public offerings in 1Q 2014. Number of deals

increased by 90%, while capital raised registered a 17% decrease from the previous quarter.

The largest IPO of the quarter was Castlight Health Inc. (NYSE: CSLT), which completed a $178 million IPO.

1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

Raised ($B) through IPO $0.77 $1.71 $0.43 $2.37 $1.42 $7.75 $0.81 $1.22 $0.64 $1.80 $2.22 $3.55 $2.94

Number of IPOs 11 14 11 10 20 12 10 8 9 20 25 20 38

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LIQUIDITY

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VentureSource

Company Name

Location Brief Description Industry Code Industry Segment

Industry Group

Close Date Round Type

Raised through IPO ($M)

Exchange

Castlight Health Inc.

San Francisco, CA

Provider of cloud-based software that attempts to help enterprises manage

health care costs.

Clinical Decision Support

Medical Software and Information

Services Healthcare 3/14/2014 IPO $177.60 NYSE: CSLT

Coupons.com Inc. Mountain

View, CA

Provider of digital coupons. Advertising/Marketing Business Support

Services Business and

Financial Services 3/7/2014 IPO $168.00 NYSE: COUP

Acucela Inc. Seattle, WA

Developer of therapeutics to treat and slow the

progression of sight-threatening ophthalmic

diseases.

Biotechnology Therapeutics

Biopharmaceuticals Healthcare 2/13/2014 IPO $162.35 TSE: M

Top 3 U.S. IPOs (1Q 2014)

LIQUIDITY

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VentureSource

ABOUT US

Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and stage of development throughout the world. The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.

About Dow Jones

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