PricewaterhouseCoopers/ National Venture Capital Association … · 2008-05-18 ·...

Shaking the MoneyTree™Q4/Full-Year 2006 Update

P w C

PricewaterhouseCoopers/ PricewaterhouseCoopers/ National Venture Capital Association National Venture Capital Association

MoneyTreeMoneyTree™™ ReportReportbased on data from Thomson Financialbased on data from Thomson Financial

Raleigh, NCRaleigh, NCFebruary 2007February 2007

PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ ReportBased on data from Thomson Financial

Today’s program

The MoneyTree Report – Q4 2006 Analysis• presented by Jeff Barber, PricewaterhouseCoopers LLP

Venture Capital Panel• Jason Caplain, Southern Capitol Ventures• Garheng Kong, Intersouth Partners

1)

2)

Question and Answer Session3)


Speaker Bios


Jeff BarberJeff Barber is the managing partner of the PricewaterhouseCoopers Raleigh office. He also serves as the partner-in-charge of the PwC Carolinas Technology Industry Group. In this capacity he leads a team of 30 professionals in providing services and support to over 75 technology-based companies. Jeff has over twenty years of experience serving technology companies, including extensive experience working with clients from the organizational stage through the initial public offering and subsequent expansion.

Jeff spent two years in the PwC National Office in New York City where he worked in the Firm’s Accounting and SEC Group. His responsibilities there included researching accounting issues, writing various PricewaterhouseCoopers publications and assisting the Firm’s national consulting partners in their consultation on client related matters.

Jeff is actively involved in the Triangle area business community. He is currently on the board of directors of the Council for Entrepreneurial Development (“CED”), where he is a past chairman of the board, and the North Carolina Technology Association (“NCTA”), where he has served as Treasurer. In January 2006, Jeff received the NCTA “Volunteer of the Year” award. In June 2000, Jeff received the CED “Outstanding Service” award. Jeff is also actively involved in various civic organizations. He currently serves on the board of directors of the North Carolina Museum of Art Foundation and the Juvenile Diabetes Research Foundation. In the past, he has served as a member of the UNC Accounting Advisory Board and a member of the NCSU College of Management Board of Advisors. In addition, Jeff has served as president of Artspace, Inc., chairman of the board of the Community Learning Centers, Inc., a member of the board of directors of the Greater Raleigh Chamber of Commerce and a member of the board of directors of the United Arts Council. Jeff is a graduate of the Leadership Raleigh and Leadership Lexington (KY) training programs. He holds a B.S. in Accounting from the University of Kentucky.


Jason Caplain

Jason is a general partner and co-founder of Southern Capitol Ventures, a Raleigh based venture capital firm. SCV focuses on companies in the Southeast and Mid-Atlantic with investments including ChannelAdvisor, Motricity, Art.com and Batanga. Previously, Jason spent two years at Red Hat where he directed the company's global budgeting process, provided financial analysis for the successful IPO in August 1999 and performed due diligence on many of the company's acquisitions. Prior to Red Hat, Jason was a partner at Harrison Hurley and Company, an investment banking and business-consulting firm headquartered in Providence, RI.

Jason was on the board of directors of Synthematix which was acquired by SymyxTechnologies (NASDAQ:SMMX) and a board observer for Batanga which merged withPlaneta Networks. He is currently on the boards of eMinor and the Council for Entrepreneurial Development which is the largest entrepreneurial support organization in the nation. While at Southern Capitol Ventures, he has also served as interim CFO for one of its portfolio companies.

Jason writes a monthly column for TechJournal South, has a blog called SoutheastVC and he has received the Triangle Business Journal's "40 under 40" leadership award. Jason received his BS in Finance from Bentley College.


Garheng KongSince joining Intersouth Partners in 2000, Garheng has focused primarily on Intersouth’s life science portfolio. His role at Intersouth involves all aspects of venture investing. He has full-cycle investing experience, successfully sourcing, syndicating, managing and exiting investments.

Prior to joining Intersouth, Garheng worked as a clinical scientist at Glaxo Wellcome. While completing his Ph.D., he worked with the Duke University Office of Science and Technology to help commercialize early stage technology. He has performed research in the fields of drug delivery, cancer therapy, bioremediation and self-assembled monolayers. He has published ten peer reviewed scientific articles and numerous abstracts, and has presented at international scientific conferences.

Garheng serves on the board of directors of the North Carolina Medical Device Organization and the SEBIO organization, and has served on the Duke University Medical Center Institutional Review Board. He graduated at the top of his class from Duke’s School of Medicine and received his Ph.D. in Biomedical Engineering from Duke University. He received his M.B.A. from Duke’s Fuqua School of Business, where he also graduated at the top of his class. Dr. Kong holds a B.S. in Chemical Engineering and a B.S. in Biological Sciences from Stanford University.


About The Report

• PricewaterhouseCoopers and the National Venture Capital Association produce the MoneyTree ™ Report based on data from Thomson Financial

• ‘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 12th year

• Results online at www.pwcmoneytree.com, www.nvca.org, www.venturexpert.com


The National Picture

Historical Trends


MoneyTree Total Investments: Q1 1998 – Q4 2006

($ in billions)

$4.1

$6.6

$28.

4

$12.

8

$6.8

$4.3 $5

.2

$5.1 $6

.3

$5.7

$11.

0

$28.

0

$11.

4

$6.0

$5.0 $6

.3

$6.4

$6.9

$5.3

$13.

2

$26.

4

$8.3

$4.5

$4.8

$4.8 $5

.6 $6.6

$6.0

$23.

4

$22.

2

$8.1

$4.5 $5

.6

$5.8

$5.7

$5.7

$0.0

$8.0

$16.0

$24.0

$32.0

1998 1999 2000 2001 2002 2003 2004 2005 2006

1998 1999 2000 2001 2002 2003 2004 2005 2006

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

771 798812719

Q1 Q2

839 913

Q3

678

# ofDeals

815

Q4

862 802840698

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

704 7717326887216878448319791001122412891746193121052131186714231303916990910901846


MoneyTree Total Investments: 1980 – 2006

($ in billions)

$0.6

$1.2

$1.6

$3.0

$3.0

$2.8

$3.1

$3.3

$3.3

$3.3

$2.8

$2.2

$3.6

$3.7

$4.1 $8

.1 $11.

3

$14.

9

$21.

1

$54.

2

$105

.0

$40.

7

$21.

8

$19.

7

$22.

1

$22.

8

$25.

5

$0

$20

$40

$60

$80

$100

$120

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Annual Venture Capital Investments 1980 to 2006


Investments by Region: Q4 2006(dollars in millions)

HA W AII

MA UI

KAHOOLA WE

LANAI

MOLOKAI

O AHU

KAU AI

NIIHA U

Texas$ 169.430 Deals

Silicon Valley$2,159.1

260 Deals

New England$695.2

96 Deals

Midwest$ 233.233 Deals

South Central$17.74 Deals

Northwest$279.341 Deals

Sacramento/N. CA$7.0

2 Deals

San Diego$380.239 Deals

Southeast$330.350 Deals

Southwest$50.2

19 Deals

LA/Orange County$378.9

53 Deals

DC/Metroplex$137.8

48 Deals

NY Metro$550.2

56 Deals

Philadelphia Metro$124.5

22 Deals

North Central$93.4

18 Deals

Q4 2006 Total Investments - $5,722M in 802 deals

Colorado$65.1

16 Deals

AK/HI/PR$12.2

7 Deals

Upstate NY$35.7

6 Deals

**Undisclosed$2.32 deals


Investments by Region: Q4 2006($ in millions)

$2.3

$7.0

$50.2

$65.1

$93.4

$124.5

$137.8

$169.4

$233.2

$279.3

$330.3

$378.9

$380.2

$550.2

$2,159.1

$695.2

$35.7

$17.7

$12.2

$0 $500 $1,000 $1,500 $2,000 $2,500

Unknown

Sacramento/N.Cal

AK/HI/PR

South Central

Upstate NY

SouthWest

Colorado

North Central

Philadelphia Metro

DC/Metroplex

Texas

Midwest

Northwest

Southeast

LA/Orange County

San Diego

NY Metro

New England

Silicon Valley

Region# of

Deals% $ Change from Q3 ‘06

Silicon ValleyNew EnglandNY Metro

San Diego

LA/Orange CountySoutheastNorthwestMidwestTexasDC/MetroplexPhiladelphia MetroNorth CentralColoradoSouth WestUpstate NYSouth Central 4 68.9%

Sacramento/N.Cal 2 -64.9%AK/HI/PR

Undisclosed/Other

Total 802 -13.4%

260 -2.4%96 6.3%56 20.3%

39 26.5%

53 -31.2%

41 41.2%33 47.1%30 -69.0%48 -60.2%22 -39.2%18 -34.5%16 -70.8%19 -76.5%6 1.9%

7 NM

2 NM

50 NM

Q4 2006 Total: $ 5,722 (NM = Not Meaningful)


Investments by Region: Full-Year 2006(dollars in millions)

HA W AII

MA UI

KAHOOLA WE

LANAI

MOLOKAI

O AHU

KAU AI

NIIHA U

Texas$ 1,384.6176 Deals

Silicon Valley$9,156.9

1,108 Deals

New England$3,036.4

413 Deals

Midwest$ 978.1

160 Deals

South Central$77.5

17 Deals

Northwest$1,156.7166 Deals

Sacramento/N. CA$35.17 Deals

San Diego$1,229.9125 Deals

Southeast$1,211.9216 Deals

Southwest$468.5

76 Deals

LA/Orange County$1,820.5205 Deals

DC/Metroplex$1,125.3204 Deals

NY Metro$1,945.0

249 Deals

Philadelphia Metro$690.6

96 Deals

North Central$386.9

59 Deals

Full-Year 2006 Total Investments - $25,505M in 3,416 deals

Colorado$621.892 Deals

AK/HI/PR$31.4

14 Deals

Upstate NY$142.1

30 Deals

*Undisclosed$5.63 deals


Investments by Region Full-Year 2006

Full-Year 2006 Total: $25,505

$9,156.9

$5.6

$1,229.9

$1,211.9

$1,156.7

$1,125.3

$978.1

$690.6

$621.8

$468.5

$386.9

$142.1

$77.5

$35.1

$31.4

$1,945.0

$1,820.5

$1,384.6

$3,036.4

$0 $2,000 $4,000 $6,000 $8,000 $10,000

Undisclosed

AK/HI/PR

Sacramento/N.Cal

South Central

Upstate NY

North Central

SouthWest

Colorado

Philadelphia Metro

Midwest

DC/Metroplex

Northwest

Southeast

San Diego

Texas

LA/Orange County

NY Metro

New England

Silicon Valley

(NM=Not Meaningful)

($ in millions)

Region# of

Deals% Change from 2005

Silicon Valley 1,108 12.8%

New England 413 11.0%

NY Metro 249 NM

LA/Orange County 205 24.8%

Texas 176 28.1%

San Diego 125 16.5%

Southeast 216 5.2%

Northwest 166 15.3%

DC/Metroplex 204 12.7%

Midwest 160 17.4%

Philadelphia Metro 96 20.3%

Colorado 92 -4.9%

Southwest 76 -23.3%

North Central 59 25.3%

Upstate NY 30 142.4%

South Central 17 37.9%

Sacramento/N.Cal 7 -54.1%

AK/HI/PR 14 80.9%

Undisclosed 3 NM

2005 Total 3,416 12.0%


Q4 2006 Top 10 States Garnering Venture FundsQ4 2006 Top 10 States Garnering Venture Funds

State Deals Investment Amount

1. California 354 $ 2,295,154,700

2. Massachusetts 86 $ 659,710,900

3. New York 43 $ 436,818,500

4. Washington 35 $ 260,468,200

5. New Jersey 23 $ 176,410,300

6. Texas 30 $ 169,391,400

7. North Carolina 14 $ 118,846,700

8. Pennsylvania 21 $ 114,639,300

9. Georgia 17 $ 113,371,700

10. Illinois 14 $ 94,729,200


Full Year 2006 Top 10 States Garnering Venture FundsFull Year 2006 Top 10 States Garnering Venture Funds

State Deals Investment Amount

1. California 1,445 $ 12,242,425,300

2. Massachusetts 368 $ 2,819,468,800

3. Texas 176 $ 1,384,577,200

4. New York 190 $ 1,256,823,700

5. Washington 135 $ 1,012,071,100

6. Pennsylvania 102 $ 777,783,000

7. New Jersey 84 $ 771,270,600

8. Maryland 108 $ 636,215,300

9. Colorado 92 $ 621,816,300

10. North Carolina 65 $ 471,606,600

PricewaterhouseCoopers/National Venture Capital Association MoneyTree ™ ReportBased on data from Thomson Financial

Investments by Industry Full-Year 2006($ in millions)

Visit www.pwcmoneytree.comfor Industry Definitions

$26.1

$2,612.3

$1,986.0

$1,765.8

$1,622.4

$1,082.7

$999.7

$681.1

$653.1

$510.7

$424.3

$404.9

$393.5

$207.2

$4,970.3

$4,510.7

$2,654.0

$0 $2,000 $4,000 $6,000

Other

Retailing/Distribution

Healthcare Services

Computers and Peripherals

Financial Services

Consumer Products and Services

Business Products and Services

Electronics/Instrumentation

IT Services

Networking and Equipment

Media and Entertainment

Industrial/Energy

Semiconductors

Telecommunications

Medical Devices and Equipment

Biotechnology

Software

Full-Year 2006 Totals: $25,505

Industry# of

Deals% $ Change from 2005

Software 865 3.2%

Biotechnology 423 16.8%Medical Device & Equip. 308 23.6%Telecommunications 294 4.7%

Semiconductors 219 5.5%

Industrial/Energy 183 107.6%

Media & Entertainment 299 54.3%

Networking and Equipment 134 -25.9%

IT Services 152 9.9%

Electronics/Instrumentation 89 76.2%

Business Prod & Services 116 37.8%

Consumer Products & Srvcs 90 40.1%

Financial Services 74 -46.7%

Computers & Peripherals 64 -19.3%

Healthcare Services 58 -13.5%

Retailing/Distribution 39 -17.7%

Other 9 -58.0%

TOTAL 3,416 12.0%


Investments by Q4 ’06 Top Five Industries –Quarterly Percent of Total U.S. Investments

Top 5 Industries – Q4 ‘04 to Q4 ‘05(% of Total Dollars)

19.8

%

17.6

%

11.7

%

12.7

%

7.9%

21.7

%

14.3

%

11.3

%

9.3%

7.7%

19.8

%

19.5

%

8.3% 9.

3%

8.4%

16.9

%

17.7

%

10.3

%

13.8

%

7.6%

19.7

%

19.2

%

12.2

%

8.2%

7.3%

0%

5%

10%

15%

20%

25%

30%

Softw are Biotechnology Medical Devices andEquipment

Telecommunications Semiconductor

Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06


Life Science Investments –Percent of Total U.S. Investments Life Science Sectors – Q4 ’05 to Q4 ‘06

(% of Total Dollars)

17.6

%

11.7

%

29.3

%

14.3

%

11.3

%

25.6

%

19.5

%

8.3%

27.8

%

17.7

%

10.3

%

28.0

%

19.2

%

12.2

%

31.4

%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Biotechnology Medical Devices and Equipment Life Sciences

Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06


Investments by Stage of Development - Full-Year 2006

($ in millions)

$1,159.1

$11,207.9

$9,313.2

$3,824.7

$0 $3,000 $6,000 $9,000 $12,000

Startup/Seed

Early Stage

Later Stage

Expansion Stage


Stage of Development# of

Deals

% Change in $ Amount from

2005

Expansion Stage 1,283 29.9%

Later Stage 957 -3.6%

Early Stage 864 3.7%

Startup/Seed 312 45.5

Total 3,416 12.0%


Investments by Sequence of Financing - Full-Year 2006

($ in millions)

$3,948.5

$7,069.3

$5,788.5

$4,572.9

$4,125.6

$0 $3,500 $7,000

Fourth

Third

Second

First

5th & Beyond


FinancingSequence

# of Deals

% Change in$ Amount from

2005

Fifth & Beyond 802 18.4%

First 1,093 3.52%

Second 684 6.78%

Third 464 4.3%

Fourth 373 33.2%

Total 3,416 12%


First Sequence Financing –Investment Amount

($ in billions)

$8.8

$2.9

$1.3

$0.7 $1.0 $1

.4

$1.3$2

.0

$1.2

$1.0 $1.3

$1.5

$1.6

$6.3

$1.3

$1.0

$1.0

$1.2

$1.2 $1

.6

$5.4

$1.3

$0.8 $1.1

$1.2

$1.4

$1.3

$8.5

$0$1$2$3$4$5$6$7$8$9

$10

2000 2001 2002 2003 2004 2005 2006

Q1 Q2 Q3 Q4


Stage of Development –Quarterly Percent of Total First Sequence Dollars

(% of first sequence dollars)

6.6%

45.3

%

34.1

%

14.1

%

16.3

%

36.7

%

17.0

%

29.8

%

41.4

%

11.8

%19.2

%

34.1

%

34.0

%

12.6

%18.7

%

49.1

%

23.3

%

8.9%

14.2

%

32.8

%

0%

10%

20%

30%

40%

50%

60%

70%

Startup/Seed Early Stage Expansion Later Stage

Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06


First Sequence Financing –Percent of Total U.S. Investments

30.1%

23.8%24.4%22.4%

17.6%15.2%15.9%

19.6%20.4%22.3%

17.8%17.1%20.6%21.5%20.3%20.0%19.9%

25.4%

21.1%

28.4%

23.4%22.1%24.9%

22.4%24.2%23.4%

44.9%41.5%

38.1%

29.9%26.9%26.5%

24.2%27.0%28.4%

26.8%25.8%24.6%25.4%25.3%27.4%26.9%

29.0%32.3%

30.4%31.8%29.7%

31.8%34.6% 33.3%34.0%

30.5%

20.8%

31.0% 29.9%

44.9%

0%5%

10%15%20%25%30%35%40%45%50%55%60%

Q1

2000

Q2

2000

Q3

2000

Q4

2000

Q1

2001

Q2

2001

Q3

2001

Q4

2001

Q1

2002

Q2

2002

Q3

2002

Q4

2002

Q1

2003

Q2

2003

Q3

2003

Q4

2003

Q1

2004

Q2

2004

Q3

2004

Q4

2004

Q1

2005

Q2

2005

Q3

2005

Q4

2005

Q1

2006

Q2

2006

Q3

2006

Q4

2006

% of Total Dollars % of Total Deals


Median Deal Size vs. Mean Deal Size –Quarterly Total U.S. Investments

$6.0

$7.5$6.8 $7.0 $6.7

$5.0 $5.0$4.4

$5.0 $5.0$4.0 $4.2

$3.7 $4.0 $4.1 $4.3$5.0 $5.0 $5.0 $5.0 $5.0 $5.0 $5.0

$4.1$5.0 $5.0 $5.0

$4.5$4.0

$12.6$13.6 $13.4

$14.1

$8.5 $8.6

$7.4$6.5

$7.1 $7.2$7.8 $7.4 $7.6 $7.4

$8.1 $7.7 $7.4$7.9 $8.1 $8.0

$7.5

$9.4

$13.2

$10.0

$8.7

$6.8 $6.6$7.6 $7.8

$0

$2

$4

$6

$8

$10

$12

$14

Q4

1999

Q1

2000

Q2

2000

Q3

2000

Q4

2000

Q1

2001

Q2

2001

Q3

2001

Q4

2001

Q1

2002

Q2

2002

Q3

2002

Q4

2002

Q1

2003

Q2

2003

Q3

2003

Q4

2003

Q1

2004

Q2

2004

Q3

2004

Q4

2004

Q1

2005

Q2

2005

Q3

2005

Q4

2005

Q1

2006

Q2

2006

Q3

2006

Q4

2006

Median Deal Size Mean Deal Size


Post-Money Valuations – Early Stage Companies 1995 to 2006

12 Month Average

$12.

8

$17.

9

$17.

7

$26.

1

$19.

4

$10.

1

$8.8

$9.8

$6.8

$6.5

$5.8

$5.4

$8.6

$10.

2

$7.8

$5.4

$5.6

$8.7

$6.4

$4.8

$0

$5

$10

$15

$20

$25

$30

$35

$40

Q4 97 Q4 98 Q4 99 Q4 00 Q4 01 Q4 02 Q4 03 Q4 04 Q4 05 Q3 06

Pre-money Valuation Investment Amount

Q4Year

1997 1998 1999 2000 2001 2002 2003 2004 2005

$15.53 $15.51

Q3 2006

$14.17 $12.17$15.41$27.92$36.22$25.45$24.30$17.55Total


Post-Money Valuations – Expansion Stage Companies 1995 to 2006

$30.

8

$34.

3

$62.

9

$87.

3

$48.

5

$33.

4

$32.

3

$49.

6

$47.

2

$54.

0

$12.

0

$11.

4

$13.

8

$21.

7

$16.

5

$12.

5

$13.

6

$14.

3

$8.8

$8.1

-$10

$10

$30

$50

$70

$90

$110

Q4 97 Q4 98 Q4 99 Q4 00 Q4 01 Q4 02 Q4 03 Q4 04 Q4 05 Q3 06


12 Month Average

Q4Year

1997 1998 1999 2000 2001 2002 2003 2004 2005

$61.66 $61.50

Q3 2006

$43.60 $67.56$45.89$62.27$109.00$79.36$43.02$38.88Total


Post-Money Valuations – Later Stage Companies 1995 to 2006

12 Month Average

$60.

8

$55.

3

$105

.3

$130

.8

$78.

4

$49.

0

$54.

7

$54.

3

$79.

4

$95.

5

$16.

6

$14.

3

$20.

5

$28.

9

$20.

6

$16.

8

$12.

8

$15.

3

$10.

6

$9.8

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

Q4 97 Q4 98 Q4 99 Q4 00 Q4 01 Q4 02 Q4 03 Q4 04 Q4 05 Q3 06


Q4Year

1997 1998 1999 2000 2001 2002 2003 2004 2005

$70.85 $94.65

Q3 2006

$68.96 $108.32$65.81$98.87$159.72$125.87$65.97$70.58Total


Full Year 2006 – Most Active Venture InvestorsVenture Capital Firm Location Total Deals

Draper Fisher Jurvetson Menlo Park, CA 76

Intel Capital Santa Clara, CA 74

New Enterprise Associates Baltimore, MD 71

Polaris Venture Partners Waltham, MA 63

Kleiner Perkins Caufield & Byers Menlo Park, CA 59

U.S. Venture Partners Menlo Park, CA 59

Sequoia Capital Menlo Park, CA 54

Austin Ventures L.P. Austin, TX 46

Oak Investment Partners Westport, CT 51

Venrock Associates New York, NY 50


Thomson FinancialU.S. Private Equity Performance Index (PEPI)(Investment Horizon Performance as of 9/30/2006)

Fund Type 1 Year 3 Year 5 Year 10 Year 20 Year

38.3 20.514.613.916.513.28.4

14.0

NASDAQ 5.5 7.8 8.7 7.1 11.4S&P 500 9.7 9.9 5.2 7.5 9.7

16.89.4

20.58.85.9

11.2

-5.41.82.7

-1.09.22.95.9

5.512.810.59.4

15.64.7

13.2

Early/Seed VC 2.9Balanced VC 10.7Later Stage VC 27.8All Venture 10.8All Buyouts 23.6Mezzanine -8.1All Private Equity 19.0

Source: Thomson Financial/National Venture Capital Association

*he Private Equity Performance Index is based on the latest quarterly statistics from Thomson Financials’ Private Equity Performance Database analyzing the cashflows and returns for over 1860 US venture capital and private equity partnerships with a capitalization of $678 billion. Sources are financial documents and schedules from Limited Partners investors and General Partners. All returns are calculated by Thomson Financial from the underlying financial cashflows. Returns are net to investors after management fees and carried interest. Buyout funds sizes are defined as the following: Small: 0-250 $Mil, Medium: 250-500 $Mil, Large: 500-1000 $Mil, Mega: 1 Bil +


Analysis of Venture-Backed IPO and M&A Activity

Date Number of IPOs**

Total Venture-Backed Offering Size ($M)

Average Venture-Backed Offering Size ($M)

Number of Venture-backed M&A deals

Average M&A deal size***

2003 29 2,022.7 69.8 291 62.8

2005 Q1 10 720.7 72.1 82 94.9

2005 Q2 10 714.1 71.4 80 133.1

2005 Q3 19 1,458.1 76.7 98 93.1

2005 Q4 17 1,568.1 92.4 87 65.7

2005 56 4,461.0 79.7 347 95.8

2006 Q1 10 540.8 54.1 104 112.2

2006 Q4 21 1,835.1 87.4 56 165.3

2006 58 5,321.1 91.7 335 113.8

2004 93 11,014.9 118.4 339 83.0

2006 Q2 19 20,11.0 105.8 92 101.3

2006 Q3 8 943.2 116.8 83 96.8

* Q4 2006 M&A data, current as of January 2, 2007, is preliminary and subject to change** 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 valuesSource: Thomson Financial & National Venture Capital Association


Venture Capital and LBO/Mezzanine Fundraising*Venture Capital Buyouts & Mezzanine**

Number of Funds

VC Raised ($M)

Number of Funds

Buyout & Mezzanine ($M)

86 24,831.42003 146 10,707.8 91 28,952.82004 203 18,557.1 139 51,236.42005 214 28,001.8 178 96,087.42006 200 28,596.5 138 102,940.7

Q3 ’06 66 5,432.7 35 23,172.1

Quarter

Q4 ’05 76 9,248.1 52 32,902.0

Q2 ’06 66 13,817.3 44 35,999.8

Q4 ‘05 37 2,830.2 39 17,829.7

Q1 ’06 68 6,516.3 49

2002 172

25,939.1

3,820.4

Year

*These figures take into account the subtractive effort of downsized funds** This category includes LBO, Mezzanine, Turnaround and Recapitalization focused funds

Source: Thomson Financial & National Venture Capital Association


North Carolina Picture

Historical Trends


MoneyTree Total North Carolina InvestmentsMoneyTree Total North Carolina Investments1999 1999 –– Q4 2006Q4 2006

1999 2000 2001 2002 2003

# of Deals

2004 2005 2006

$77

$196

$70

$431$408

$625

$497

$224

$119$118$83

$144

$84$119

$150$175

$97

$29

$114

$56

$108

$79$101$87

$158

$304

$118

$82$140

$166

$56

$127

$0

$100

$200

$300

$400

$500

$600

$700

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

45 42 39 28 13 1915 25 19 40 35 31 24 23 15 20 23 22 20 14 9 15 17 14 18 1114 11 19 18

($ in millions)

14 14


$323$472

$774

$591$441

$352

$556

$1,834

1.42%

1.75%

2.55%

1.94%

1.85%1.79%

1.46%

1.45%

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

1999 2000 2001 2002 2003 2004 2005 20060%

1%

2%

3%

Total NC Investments NC % of U.S. Total Amount

($ in millions)

# of Deals

104 156 93 85 5474 55

MoneyTree Total North Carolina Investments MoneyTree Total North Carolina Investments ––1999 1999 –– 20062006

65


5565

93

54

7485

156

1041.7%

1.9%2.6%

1.8%

2.1%

2.0%2.8%

1.9%

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

1999 2000 2001 2002 2003 2004 2005 20060%

1%

2%

3%

Total # NC Deals NC % of U.S. Total DealsAmount Invested

(in millions)$774 $1,834 $591 $556 $352 $472$323 $441

MoneyTree Total North Carolina DealsMoneyTree Total North Carolina Deals––1999 1999 –– 20062006


$3.0

$6.0

$8.0

$14.6

$18.5

$21.0

$24.0

$26.6

$32.2

$41.0

$70.1

$101.1

$102.4

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110

Other

Business Products & Svcs

Industrial/Energy

Electronics/Instrumentation

Consumer Prods & Svcs

Media & Entertainment

Networking & Equipment

Software

Semiconductors

Financial Services

Healthcare Services

Medical Devices & Equip

Telecommunications

Biotechnology

Total Deals2006

% Change in $ Amount from

2005($ in millions)

6

2

1

Total North Carolina Investments by Industry Total North Carolina Investments by Industry ––Full Year 2006Full Year 2006

2006 Total: $471.6

10

3

4

1

$2.6

1

2

11

3

3

2

16

136%

(19%)

100%

1%

64%

73%

(30%)

(5%)

(19%)

3%

2375%

974%

100%

(43%)


Total North Carolina Amount

$471.6 million

Total U.S. Amount $25.5 billion

18%

7%

20% 6%

10%

8%

10%

21%

Software$5.0

Industrial/Energy

$1.8

Others$5.5

Telecom$2.6

Medical Devices& Equipment

$2.6Media &

Entertainment$1.6

16%

21%5%

15%

9%

7%

21%

6%

Medical Devices & Equipment

$70.1

Healthcare Services

$41.0

Others$74.3

Financial Services$32.2

Biotechnology$102.4

Software$23.9

Telecommunications101.1

(in billions)(in millions)

Biotechnology$4.5

Total North Carolina vs. U.S. Investments by Industry Total North Carolina vs. U.S. Investments by Industry –– Full Year 2006Full Year 2006

Semiconductors$26.6

Semiconductors$1.9


$112

$141

$191

$118

$160

$227

$103 $102

13.3%

5.0%3.2% 2.7%4.3%4.9% 5.3% 5.0%

12.4%

34.7%

33.6%

23.8%

43.2%

21.7%

28.7%

$0

$50

$100

$150

$200

$250

1999 2000 2001 2002 2003 2004 2005 20060%

10%

20%

30%

40%

50%

Total # NC Deals % of Total U.S. Investment in Biotech % of Total NC Investments

($ in millions)

Biotechnology Investments in NC vs. U.S.Biotechnology Investments in NC vs. U.S.1999 1999 –– 20062006

15 21 17 16 16 1619 17# of Deals

2.3%


$155

$23$43

$87

$327

$151

$541.7%

19.5%

0.5%1.0% 1.1%1.5%1.5% 1.4%

26.3%

5.3%

12.3%

16.9%15.7%

5.1%

17.8%

$0

$50

$100

$150

$200

$250

$300

$350

1999 2000 2001 2002 2003 2004 2005 20060%

10%

20%

30%

Total # NC Deals % of Total U.S. Investment in Software % of Total NC Investments

($ in millions)

Software Investments in NC vs. U.S.Software Investments in NC vs. U.S.1999 1999 –– 20062006

27 38 27 25 21 1118 8# of Deals

.6%$24


Average Deal Size Average Deal Size –– NC vs. U.S.NC vs. U.S.1999 1999 –– 20062006

$7.3 $7.5$7.3$6.8$7.1

$9.1

$13.3

$9.8

$7.2$8.2

$5.8$4.8

$6.5$6.4

$11.7

$7.4

$0

$5

$10

$15

1999 2000 2001 2002 2003 2004 2005 2006

U.S. Average Deal Size NC Average Deal Size

($ in millions)


AmountIndustry

AGDATA, Inc. Software undisclosed

Affinergy, Inc. Biotechnology $ 3,000,000

Amphora Discovery Corporation Biotechnology $ 4,371,200

Bright View Technologies, Inc. Media & Entertainment $ 7,500,200

Centice Biotechnology $ 500,000

Chorus Systems, Inc. Software $ 9,000,000

DARA Biosciences, Inc. Biotechnology $ 10,256,000

Hospital Partners of America, Inc. Healthcare Services $ 25,000,000

Immaculate Baking Company Retailing/Distribution $ 2,000,000

Integrian, Inc. Telecommunications $ 18,000,000

Metabolon, Inc. Biotechnology $ 8,000,000

Motricity Telecommunications $ 3,000,000

Company Name

North Carolina Companies Funded in Q1 2006North Carolina Companies Funded in Q1 2006


Company Name AmountIndustry


(continued)

NContact Surgical, Inc. Medical Devices & Equipment $ 3,000,000

Proventys, Inc. Software $ 1,000,000

Tranzyme Pharma, Inc. Biotechnology $ 10,000,000

VMI, LLC Medical Devices & Equipment $ 2,500,000

Visitar, Inc. Software $ 1,285,000

Ziptronix, Inc. Semiconductors $ 3,100,000

CONFIDENTIAL Financial Services $ 6,714,000

$ 118,226,400



Alveolus, Inc. Medical Devices & Equipment $ 15,000,300

Batanga.com Media & Entertainment $ 5,000,000

Bloodhound, Inc. Software $ 1,000,000

CeNeRx BioPharma, Inc. Biotechnology $ 1,600,000

ChannelAdvisor Corporation Business Products & Services $ 2,999,900

Clinipace, Inc. Software $ 580,000

Hatteras Networks, Inc. Networking & Equipment $ 21,000,100

HyperBranch Medical Technology, Inc. Medical Devices & Equipment $ 500,000

Integrian, Inc. Telecommunications $ 5,120,000

Intervolve, Inc. Software $ 2,000,000

Liquidia Technologies Industrial/Energy $ 6,000,000

Company Name





(continued)

Motricity, Inc. Telecommunications $ 37,000,000

Nextreme Thermal Solutions, Inc. Electronics/Instrumentation $ 8,075,000

Nitronex Corporation Semiconductors $ 22,000,000

Overture Networks, Inc. Telecommunications $ 7,500,000

Primo Water Corporation Consumer Products and Services $ 13,160,000

StrikeIron, Inc. IT Services $ 640,000

Visitar, Inc. Software $ 1,317,000

$ 150,492,300


AmountIndustry

Amphora Discovery Corporation Biotechnology $ 123,000

CareAnyware, Inc. Software $ 400,000

Cempra Pharmaceuticals, Inc. Biotechnology $ 14,000,000

eMinor, Inc. Media & Entertainment $ 1,950,000

HexaTech, Inc. Semiconductors $ 1,475,000

HyperBranch Medical Technology, Inc. Medical Devices & Equipment $ 1,000,000

Inlet Technologies, Inc. Media & Entertainment $ 4,400,000

LipoScience, Inc. Medical Devices & Equipment $ 13,000,000

nContact Surgical, Inc. Medical Devices & Equipment $ 7,500,000

ParinGenix, Inc. Biotechnology $ 20,400,200

Phase Bioscience, Inc. Biotechnology $ 293,000

RadarFind Corporation Medical Devices & Equipment $ 500,000

Sicel Technologies, Inc. Biotechnology $ 12,000,000


$ 84,041,200

Company Name



AmountIndustry

Aldagen, Inc. Biotechnology $ 14,299,600

Amphora Discovery Corporation Biotechnology $ 1,307,000

Bariatric Partners, Inc. Medical Devices & Equipment $ 12,000,000

Chorus Systems, Inc. Software $ 33,000

CipherOptics, Inc. Networking & Equipment $ undisclosed

Hospital Partners of America, Inc. Healthcare Services $ 5,000,000

Kolis Scientific, Inc. Medical Devices & Equipment $ 15,075,000

Motricity, Inc. Telecommunications $ 30,499,200

Nascent Pharmaceuticals, Inc. Biotechnology $ 500,000

NewHope Bariatrics, Inc. Healthcare Services $ 11,000,000

ParinGenix, Inc. Biotechnology $ 1,783,000

Primo Water Corporation Consumer Products & Services $ 1,500,000

RPath, Inc. Software $ 7,350,000


$ 118,846,700

Company Name



VC Funds Active in North CarolinaBancAmerica Capital Investors

BB&T Capital Partners

CapitalSouth Partners LLC

Carolina Financial Group

Carousel Capital Partners

Centura SBIC Inc.

Core Capital

Fairview Capital LLC

First Union Ventures Group

Franklin Street Partners

Frontier Capital LLC

Gardiner Capital

Glenwood Venture Partners

Golden Pine Ventures

Grotech Capital Group

Halifax Group

Hatteras BioCapital

H.I.G. Ventures

Intersouth Partners

Kodiak Venture Partners

Lovett Miller & Company, Inc.

Massey Burch

NC IDEA

New Enterprise Associates

Noro-Moseley Partners

Novak Biddle Venture Partners

Pappas Ventures

Piedmont Angel Network

Remington Capital Partners

Research Triangle Ventures

River Cities Capital Funds

SJF Ventures

Southern Capitol Ventures

Southeast Interactive Technology Funds

The Atlantis Group

The North Carolina Enterprise Fund

The Aurora Funds

The Trelys Funds

TriState Investment Group

Wachovia Capital Partners

Wakefield Group

Venture First Associates


Entrepreneurs and Venture Capital OnEntrepreneurs and Venture Capital On--Line Resource ListLine Resource Listwww.pwc.com - The PricewaterhouseCoopers Global website.

www.pwcmoneytree.com, www.nvca.org, www.ventureeconomics.com - The PricewaterhouseCoopers/National Venture Capital Association MoneyTree TM Report based on data from Thomson Financial is a quarterly study of equity investments made by the venture capital community in private companies in the U.S. The survey identifies regional and national trends, entrepreneurial developments and promising industry segments.

www.pwcnextwave.com - PricewaterhouseCoopers’ thought leadership articles for the world of private equity.

www.cfodirect.com - CFOdirect Network – PricewaterhouseCoopers’ online accounting, finance and business resource for senior financial executives.

www.pwcV2R.com - The Vision to Reality Entrepreneur Resource Center site offers proven business plan templates, financial models, technology-specific ratios, benchmarks and more.

www.pwcvc.com - The VC BestPractices site serves to provide an aggregate, comparative view of key issues and activities impacting the venture capital community, and to identify best practices.

www.barometersurveys.com - PricewaterhouseCoopers’ Trendsetter and Technology Barometers site – result & analysis of the quarterly survey of fast-growth and large company CEO’s.

www.cednc.org - The Council for Entrepreneurial Development

www.nc-tech.org - North Carolina Technologies Association

http://www.pwcmoneytree.com/


For more information, contact:

Jeff Barberor

Peter Coode

Carolinas Technology Industry GroupPhone 919 755-3000

[email protected]@us.pwc.com

PricewaterhouseCoopers/ National Venture Capital Association … · 2008-05-18 ·...

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