Q4 2010 Venture Capital Activity Report - CB Insights Release)

8/8/2019 Q4 2010 Venture Capital Activity Report - CB Insights Release)

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Venture Capital Activity Report | Q4 2010

www.cbinsights.com

QUARTER SUMMARY 2

QUARTERLY TRENDS 3

SECTOR REVIEW 11

1 INTERNET 11

2 HEALTHCARE 18

3 GREEN / CLEAN TECH 25

GEOGRAPHIC REVIEW

1 CALIFORNIA 32

2 MASSACHUSETTS 38

3 NEW YORK 43

4 WASHINGTON 49

5 TEXAS 54

DEFINITIONS & DATA INTEGRITY 59

TABLE OF CONTENTS

2011, CB Insights. All rights reserved. For more information about CB Insights, please email [email protected].


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Q4 2010 This Quarter in Venture CapitalQuarter sees highest dealflow and funding of last eight quarters. Internet saw Year-over-Year deal count up 21%, Green Tech up 7% and Healthcare up 2%.

2

At $6.5B of venture capital funding over 735 deals, Q4 2010s venture capital stats have something for everyone. Forthose of you looking for a data point that suggests VC is back and on the road to recovery after 2009s tough sledding, theeight quarter high on deals and dollars gives you something to hang your hat on. For those of you who think VC isoverheated and were headed for a bubble, the eight quarter high on deals and dollars gives you something to hang yourhat on. Yesits all a matter of perspective.

Overall, 2010 saw $23.7B of funding into 2792 deals which represented 14% growth in funding and 13% growth in dealsover 2009s VC nadir.

Say Bye Bye Massachusetts NY is #2 for Tech VC

Over the last five quarters, NY has seen 208 tech dealsvs. 207 for Massachusetts. Funding to NY techcompanies came in at $1.22B vs. $1.21B forMassachusetts. The margin of victory for NY is ever so

slight, but most striking is the trend for both states whichare going in very different directions. (Trend can beseen here: http://bit.ly/dLmLYG)

Seed VC Retains Its Share | Early Stage Grows

Q3 2010 saw 11% of deals going to Seed VC deals andthat share stayed consistent in Q4 2010. The share ofSeries A deals increased over Q3 2010. Early stagedeal activity was nearly 50% of total deals representingthe highest level seen in five quarters.

VCs Connecting With Internet Deals Often

The growth in the quarter was driven largely by a red-hot internet sector which hit a five quarter high (by a lot)on both deals and dollars. Early stage activity remainedstrong as did NY on the internet deal and dollar front.

Green Tech / Clean Tech Investments Stay Flat

After two quarters of VC funding to Green Tech/CleanTech investments declining, the space saw deals anddollars hold vs. the prior quarter. On a year-over-yearbasis, investment funding was up 40%. Early stageinvestment on a deals basis into Green Tech fell to a

five-quarter low. Renewables and Energy Efficiencymaintained their positions as the top 2 areas for GreenTech investment and in aggregate, they garnered theirlargest share of deals of the last five quarters.

Healthcare VC A Mixed Bag

Deals in the Healthcare space were up modestly YoY funding was down almost 16%. The growth in fundingand deals seen over the last 2 quarters ceased as welMass and Cali took over 50% of Healthcare funding buMass share of Healthcare VC fell to a five-quarter lowEarly stage activity in Healthcare hit a five quarter high

Cali's Number of VC Deals Grows, Funding Down

California retained its belt as uncontested venture capheavyweight champion. Relative to 2009, California s3% growth in deals and a 2% drop in VC funding. Thestate saw 14% growth in deals on a sequential basis oQ3 2010. 60% of the state's funding went to Internet aHealthcare companies. Mobile also took its largest shof deals in the last five quarters.

Colorado - The New Green Tech Hub?

Three of the top 10 green tech deals in the quarter wein Colorado. The state which is usually 3-4% of greentech deals jumped to 10%.

Texas Gets the Early Stage Bug

In aggregate, Texas stayed within its recent historicalrange, but it did see growth in early-stage deals with 610 deals in the quarter being into early stage deals.

Washington At Five Quarter Low in VC Funding

Over 50% of Washington deals were in early-stagecompanies and almost 60% of deals were to Internetfirms. The smaller checks to less capital-hungry webcompanies helped to drive Washington to a five quartelow on VC funding.

It isworth noting what we included and what we didnt as this quarter had some mega-deals which can and did greatlyimpact results. For example, Groupons funding was included as there was VC participation although we only included the

portion of their funding that closed in 2010, i.e. $500M. Wed recommend you also review our definitions and methodology

on p. 59 for details on our approach to VC data.
http://bit.ly/dLmLYGhttp://bit.ly/dLmLYGhttp://bit.ly/dLmLYG


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3

$3.9

$5.3

$6.1

$5.5$5.9 $5.9

$5.4

$6.5483

613678 687

730

612

715 735

Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Quarterly VC Investment and Deal Volume TrendQ1 '09 to Q4 '10

Funding ($B) # of Deals

$6.5B over 735 Deals Highest Totals of Last 8 QuartersContinued strength in seed VC funding led to a two-year high in number of deals.Total VC funding hit high on back of mega-deals which buoyed funding total.


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4

Cali Maintains, NY Gains and Mass Wanes in Deal ShareBig Three (NY, Mass, Cali) bounced back from Q3 2010 lows based on strength ofCali and NY. Mass and Washington share of deals dipped.

44% 41% 43% 38% 42%

13%12%

14%

12%

11%

6%8%

8%7%

9%

6% 5%5%

5%5%

4%4%

4%

5%4%

28% 31% 26% 33% 29%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Venture Capital by State - Number of DealsFive Quarter Trend

California Massachusetts New York Texas Washington Other


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49% 49% 52% 49%40%

12% 15%12%

9%

10%

5%5% 6%

5%7%

4%4% 4%

7%5%

3%2% 4%

4%

2%

26% 23% 23% 27%36%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Venture Capital by State - Dollars of FundingFive Quarter Trend

California Massachusetts New York Texas Washington Other

The Big Threes Share of VC Funding Falls to 5 Quarter LowNY gained in terms of dollars as did Mass. Cali, Texas and Washington all fell. Impactof a mega-deal (Groupon) is clearly evident given the large Other category.


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6

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Sector Coverage

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Over 82,000 high value privatecompany profiles across industries andsectors. Medical devices tomobile. Industrial to internet.

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Management & Board Information

Find out about the people behind thecompanies including management andboard of directors profiles.

Analytics & Reporting

Downloadable reports and analyticswhich allow you to manipulate datawhen and how you want to.
http://www.cbinsights.com/http://www.cbinsights.com/


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7

$1.6

$1.9 $1.9

$2.3

$1.7

$2.0

$1.7 $1.6

$2.5

$2.1

$1.5

$1.8$1.7 $1.7

$3.2220

230 237 223

275

232

178190

244

298

205 212193

259283

Monthly VC Investment and Deal Volume TrendOctober 2009 to December 2010

Funding ($B) # of Deals

2010 Ends with a Bang VCs Scurry to Get Deals DoneQ4 2010 started flat but ended with a flurry of activity. December 2010 saw the 2ndhighest deal flow and the highest venture funding of the last 15 months.


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6% 6% 9% 11% 11%

31% 28%33% 33% 36%

28%27%

24% 24%22%

14% 19%18% 15% 18%

10% 9%12%

8%7%

11% 10%4%

10% 7%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Venture Capital by Series - Number of DealsFive Quarter Trend

Seed Series A Series B Series C Series D Series E +

0% 0% 1% 1% 1%

20%14% 17%

20%15%

26%34% 22%

30%

20%

21% 19% 32%

20%

28%

16% 15%

23%12%

20%

16% 19%

6%16% 16%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Venture Capital by Series - Dollars of FundingFive Quarter Trend


Seed VC Stays Strong. Early Stage Continues ClimbQ4 saw seed deals retain share of deals and also saw Series A deals climb. Laterstage deals garnered an increased share of venture funding.


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25% 24% 23% 26% 24%

33% 30%38% 33% 37%

4% 7%7% 6% 6%

10% 8%7% 8% 8%

4%3%

4% 4% 3%9%

8%8% 7%

10%

16% 20%14% 17% 13%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Venture Capital by Sector - Number of DealsFive Quarter Trend

Healthcare InternetEnergy & Utilities Software (non-internet/mobile)Computer Hardware & Services Mobile & TelecommunicationsOther

33%24% 28%

33%24%

27%

21%

28% 23% 39%

5%

15%

17%9%

8%9%

7%

6%8%

7%4%

4%

4%8%

3%7%

8%

6%5% 6%

14%22%

12% 15% 14%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Venture Capital by Sector - Dollars of FundingFive Quarter Trend

Healthcare InternetEnergy & Utilities Software (non-internet/mobile)Computer Hardware & Services Mobile & TelecommunicationsOther

Internet Climbs & Healthcare Dips; Energy VC Stays FlatPerennial top 2 sectors retain their positions with internet gaining. Mobile also seeshighest share of deals of last 5 quarters. Energy & utilities stagnant.


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10

Get Started for Free with CB InsightsBasic membership to CB Insights venture capital and angel investor database is free.Just visit http://www.cbinsights.com. And also connect with us via any of the following.

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INTERNET

Q4 2010 Venture Capital

11


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$1,483$1,265

$1,618

$1,253

$2,543224 221

233 233

272

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Internet VC Investment and Deal Volume Trend

$ Funding # of Deals

Last Five Quarters

Internet VC Hits 5 Quarter HighOptimism around internet deals didnt abate with both deals and dollars way up. VCdeals and funding even after excluding Groupon stands at 5 quarter high.


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Quarter Highlights

272 deals | $2,543M

Top Five Deals

Top Cities

Chicago, IL

7 deals | $540MSan Francisco, CA

36 deals | $398MNew York, NY

38 deals | $244MWashington, DC

3 deals | $204M

Austin, TX8 deals | $102MMountain View, CA

9 deals | $98MArlington Heights, IL

1 deals | $68MLos Angeles, CA

8 deals | $66MRedwood City, CA

5 deals | $62MSeattle, WA

9 deals | $49M

GrouponTwitterLivingSocialWhale Shark Media

FleetMatics

47%

3%

14%1%

8%

3%

6%

1%

2%

2%

13%

VC Deal Volume (#) in Internet by State, Q410

California

Illinois

New York

DC

Massachusetts

TexasWashington

North Carolina

Georgia

Maryland

All Other

39%

24%

10%

8%

5%

4% 2%

2% 1% 1%

4%

VC Investment ($) in Internet by State, Q410

California

Illinois

New York

DC

Massachusetts

Texas

Washington

North Carolina

Georgia

Maryland

All Other

NY Takes Hold of #2 Spot for Internet VC Deals and DollarsCalifornia continued to dominate internet VC followed by New York on deals.Excluding Groupon, NY would be #2 on funding as well.


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46% 43% 47% 44% 47%

12% 13%15% 15% 14%

1% 1%2% 1%

3%10% 9%

10% 11%8%

5%5%

3% 6% 6%

26% 29% 24%23% 21%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Internet VC by State - Number of Deals

California New York Illinois Massachusetts Washington Other

Last Five Quarters

56% 52% 56% 50%39%

9% 16%15%

12%

10%

2% 1%

9%

0% 24%

7% 7%

7%

8%

5%4% 7%

1%

5%

21% 17%12%

25% 21%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Internet VC by State - Dollars of Funding

California New York Illinois Massachusetts Washington Other

Last Five Quarters

~70% of Internet Deals Go To Big Three StatesInternet VC deals maintained similar geographic pattern as prior quarters. Massinternet share dropped to five quarter low.


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11% 11% 12% 13% 13%

38% 33%40% 42% 38%

27%28%

23% 20%18%

13% 17%18% 15%

19%

8% 6%6% 5% 5%

4% 6% 1% 4% 7%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Internet VC by Series - Number of Deals


Last Five Quarters

1% 1% 2% 1% 1%

22% 19% 20%31%

12%

28% 33% 19%

27%

16%

28% 24%40%

23%

19%

16%10%

19%7%

27%

5%13%

1%10%

25%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Internet VC by Series - Dollars of Funding


Last Five Quarters

Early Stage Internet Investing Represented 50+% of DealsEarly stage (Seed / Series A) dealflow dipped slightly from last quarter but still over50%. Series C, D and E+ deals increased share of funding.


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2%

11%

12%

4%

4%

8%

3%

2%

1%1%

3%

2%

2%1%

44%

VC Deal Volume (#) in Internet by Sub-Industry, Q410Discount

Social

Advertising, Sales & Marketing

Bus. Intelligence, Analytics & Performance Mgmt

Video

Gaming

Data Storage

Data & Document Management

Health & Wellness

Conferencing & CommunicationInformation Providers & Portals

eCommerce enablement

Travel (internet)

Content Management

All Other

26%

24%

6%5%

3%

3%

3%2%

2%

2%2%

1%

2%

1%18%

VC Investment ($) in Internet by Sub -Industry, Q410Discount

Social

Advertising, Sales & Marketing

Bus. Intelligence, Analytics & Performance Mgmt

Video

Gaming

Data Storage

Data & Document Management

Health & Wellness

Conferencing & Communication

Information Providers & Portals

eCommerce enablement

Travel (internet)

Content Management

All Other

VC Internet Investment Remains Diverse Across IndustriesSocial and Advertising remained strong. Gaming made a come back from Q3 2010.


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17

$0.6

$2.4

$7.0

$9.0

$19.0$20.0


Internet Median Deal Size by Quarter($ Million)

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Early Stage Medians Fall. Late Stage Medians Up Big.Seed, Series A and Series C median deal sizes all were smaller. Series B up withSeries D and Series E+ were up big on back of many larger late stage web deals.


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HEALTHCARE


18


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$1,830

$1,405

$1,639$1,753

$1,541

169 173

138

184173

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Healthcare VC Investment and Deal Volume Trend


Last Five Quarters

Healthcare Investment Dips After 2 Qtrs of Funding GrowthHealthcare deals were up modestly YoY but funding levels down almost 16% vs. yearago. Deals down vs. prior quarter and funding down over 12% qoq.


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Quarter Highlights

173 deals | $1,541M

Top Five Deals

Top Cities

33%

13%

6%7%

4%

4%

3%

3%

3%

1%

23%

VC Deal Volume (#) in Healthcare by State, Q410

California

Massachusetts

Pennsylvania

Texas

New Jersey

New YorkNorth Carolina

Colorado

Minnesota

Michigan

All Other

39%

16%

9%

6%

5%

4%

3%

3%2%

2%

11%

VC Investment ($) in Healthcare by State, Q410

California

Massachusetts

Pennsylvania

Texas

New Jersey

New York

North Carolina

Colorado

Minnesota

Michigan

All Other

Cambridge, MA9 deals | $143M

Redwood City, CA4 deals | $135M

San Diego, CA11 deals | $104M

Palo Alto, CA

3 deals | $70MSouth San Francisco, CA

2 deals | $67MWayne, PA

1 deals | $61MNew York, NY

5 deals | $59MMalvern, PA

2 deals | $48MWebster, TX

1 deals | $46MPleasanton, CA

2 deals | $34M

Pearl TherapeuticsMoksha8IDev TechnologiesSutro Biopharma

Genocea Biosciences

Mass and Cali Attract Over 50% of Healthcare VC FundingCali increased over Q3 2010 while Mass declined on # of deals basis. Pennsylvaniaand Texas continue to hold strong.


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21

32% 34% 33% 28% 33%

18% 17%23%

17% 13%

4% 6%5%

8% 6%4%

3%3%

4% 3%4% 3%

6%

5%2%

38% 36%30%

37% 42%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Healthcare VC by State - Number of Deals

California Massachusetts Pennsylvania New Jersey Washington Other

Last Five Quarters

35% 31%40% 42% 39%

18% 27%

23%13% 17%

4%4%

4%6%

10%8%5%

4%

4%5%4% 0%

7%

7%1%

31% 33%22%

29% 29%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Healthcare VC by State - Dollars of Funding

California Massachusetts Pennsylvania New Jersey Washington Other

Last Five Quarters

Cali Stays on Top. Mass Share of Deals Falls to 5 Qtr Low.Massachusetts share of deals continued downward trend. Healthcare sector is mostgeographically diverse with 4 of 10 deals occurring outside of top states.


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22

3% 3% 6%9% 6%

30% 29%36% 27%

39%

30% 30%

24%26%

23%

13% 21%21%

16%

16%12%

9%7%

10%

10%11% 8%

6%13%

6%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Healthcare VC by Series - Number of Deals


Last Five Quarters

0% 0% 0% 1% 1%

24% 22% 25% 17%24%

31% 36%

23% 30% 19%

15%19% 36%

22% 35%

19%11%

7%

14%

16%

10% 11% 9% 16%6%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Healthcare VC by Series - Dollars of Funding


Last Five Quarters

Early Stage Healthcare Hits Five-Quarter HighSeed and Series A healthcare grew to 45% of total healthcare funding. Later stagehealthcare companies took 57% of total funding.


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23

37%

17%

14%

8%

11%

1%

2%2%

1%

7%

VC Deal Volume (#) in Healthcare by Industry, Q410

Medical Devices & Equipment

Pharmaceuticals / Drugs

Biotechnology

Drug Development

Medical Facilities & Services

Drug Manufacturing

Disease Diagnosis

Drug Discovery

NULL

All Other

37%

20%

14%

12%

5%

4%

2% 2% 2%2%

VC Investment ($) in Healthcare by Industry, Q410

Medical Devices & Equipment

Pharmaceuticals / Drugs

Biotechnology

Drug Development

Medical Facilities & Services

Drug Manufacturing

Disease Diagnosis

Drug Discovery

NULL

All Other

Medical Device Investment Remains StrongMedical Devices continued their dominance of the Healthcare sector followed byPharmaceuticals, Biotech, Medical Facilities & Services and Drug Development.


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$1.3$2.6

$7.3

$24.0

$16.0

$13.0


Healthcare Median Deal Size by Quarter($ Million)

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

More Small Series A Healthcare DealsThe increased # of Series A deals (p. 22) also saw smaller amounts of funding. SeedVC, Series C and D medians all climbed.


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GREEN & CLEAN TECH


25


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$565

$1,322

$1,046

$790 $790

55

85

5561 59

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Green VC Investment and Deal Volume Trend


Last Five Quarters

Green Tech Performance In-Line with Last QuarterGreen Tech figures consistent with Q3 Funding steadied at $790M, while deal countfell slightly. Investment dollars were up 40% year-over-year.


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Quarter Highlights

59 deals | $790M

Top Five Deals

Top Cities

41%

10%13%

5%2%

5%

2%

2%3%

15%

VC Deal Volume (#) in Green by State, Q410

California

Colorado

Illinois

Massachusetts

Michigan

ArizonaNew York

Oregon

Ohio

Texas

All Other

39%

24%

13%

11%

5%

2%1%

1%1% 1%

2%

VC Investment ($) in Green by State, Q410

California

Colorado

Illinois

Massachusetts

Michigan

Arizona

New York

OregonOhio

Texas

All Other

Loveland, CO

1 deals | $110MBolingbrook, IL

1 deals | $100MSan Jose, CA

2 deals | $57MMilpitas, CA

2 deals | $43M

Cambridge, MA3 deals | $38M

Fremont, CA

2 deals | $37MLansing, MI

2 deals | $37MSouth San Francisco, CA

1 deals | $30MNorth Lexington, MA

2 deals | $26MWindsor, CO

1 deals | $24M

Abound SolarElevance Renewable ScienceSolopowerSoladigm

LS9

Colorado Shows Its Greener SideColorado emerged as a serious destination for Green Tech investment, taking 3 of thetop 10 Green deals in Q4. As usual, California was the overall leader.


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53% 55% 47% 46% 41%

9% 8%13%

8% 14%

7% 5% 7% 15%3%

4% 4% 2% 3%

10%

2%4% 2%

25% 28% 27% 28% 31%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Green VC by State - Number of Deals

California Massachusetts Texas Colorado Illinois Other

Last Five Quarters

64%79%

62% 59%

39%

4%

6%

10%4%

11%

5%

1%

9% 21%

1%

2%

1%1%

3%

24%

1%

4% 13%25%

13% 15% 12% 12%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Green VC by State - Dollars of Funding

California Massachusetts Texas Colorado Illinois Other

Last Five QuartersLast Five Quarters

California Loses Green Share for Fourth Straight QuarterThe downward trend for California continued, as Texas, Colorado, Massachusetts andIllinois ate into The Golden States Green Tech dominance.


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8%2% 3%

10%

32%33% 31%

27%

31%

32%

25% 29%

39%38%

18%

19%23%

10% 19%

3%12%

11% 7%10%

8% 9%3% 7% 2%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Green VC by Series - Number of Deals


Last Five Quarters

19%8% 10%

16%8%

27% 44%27%

44%

29%

25% 14%

27%

12%

41%

3% 18%28%

22%19%26%

16%7% 6% 4%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Green VC by Series - Dollars of Funding


Last Five Quarters

Green Tech Seed Investment Disappears in Q4 2010Early stage Green Tech investment share crept back to Q2 2010 levels. Investorsfavored Series C and later in Q4.


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44% 40%

49%

39% 46%

4% 6%

2%

3%

2% 2%4%

7% 3%5% 7%

11%11% 15%4%

5%

5%8%

7%

42% 40%29% 31% 29%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Green VC by Industry - Number of Deals

Renewables Automobile Manufacturing

Green/Environmental Software Energy Efficiency

Energy Storage Other

Last Five Quarters

38%

55%68%

42%49%

1%

19%3%

1%18%

15%

3%

2% 6%

7%

7%

3%

4% 7%

6%

5%

37%

19%13%

28%38%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Green VC by Industry - Dollars of Funding

Renewables Automobile Manufacturing

Green/Environmental Software Energy Efficiency

Energy Storage Other

Last Five Quarters

Renewables and Energy Efficiency See an Uptick in ShareGreen Tech Software yielded to Renewable and Energy Efficiency investments.Energy Storage investments held steady.


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31

$0.0$2.8

$7.4

$24.0$26.0

$21.5

$6.2

Seed Series A Series B Series C Series D Series E + Overall

Green Median Deal Size by Quarter($ Million)

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Late Stage Green Tech Deals See Uptick in SizeWith investment share shifting from Green Tech Software to Renewables, late stagemedian deal values climbed higher. Overall median stayed flat at $6.2 million.


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CALIFORNIA


32


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34

$2,685

$2,929$3,062

$2,607 $2,630

300 297

264 271

310

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

California VC Investment and Deal Volume Trend


Last Five Quarters

California Deal Volume Experiences Five Quarter HighFunding levels in California remained relatively flat from last quarter, but deal countsaw a 14% uptick from Q3, and 3% year-over-year growth.


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35

Quarter Highlights

310 deals | $2,630M

Top Sector# of Deals Internet$ of Funding Internet

Top Five Deals

Top Cities

San Francisco

64 deals | $517MRedwood City

13 deals | $237M

Mountain View19 deals | $216M

San Diego20 deals | $185M

San Jose13 deals | $152M

Palo Alto21 deals | $141M

Sunnyvale11 deals | $106M

Los Angeles

14 deals | $97MSouth San Francisco

3 deals | $97MSan Mateo

9 deals | $67M

TwitterPearl TherapeuticsSolopowerSpace Exploration TechnologiFallbrook Technologies

18%

41%5%

8%

3%

12%

3%

4% 0% 2%

4%

VC Deal Volume (#) in California by Sector, Q410

Healthcare

Internet

Energy & Utilities

Software (non-internet/mobile)

Computer Hardware & Services

Mobile & Telecommunications

Industrial

Electronics

Business Products & Services

Consumer Products & Services

All Other

23%

38%9%

7%

2%

9%

3%

2%0%

1%

6%

VC Investment ($) in California by Sector, Q410

Healthcare

Internet

Energy & Utilities




Industrial

Electronics


Consumer Products & Services

All Other

Internet & Healthcare Continue Dominance in CaliInternet and Healthcare combined for more than 60% of overall VC investment inCalifornia; Mobile continued its growth.


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18% 20% 17% 19% 18%

34% 32%41% 38% 41%

5% 8%7% 7% 5%9% 4%6% 7% 8%

6%5%

5% 5% 3%

27% 30%23% 24% 24%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in California by Sector - Number of Deals

Healthcare Internet

Energy & Utilities Software (non-internet/mobile)

Com uter Hardware & Services Other

Last Five Quarters

24%15%

21%28% 23%

31%

23%

30%24% 38%

6%

20%

19%11%

9%10%

3%

6%9%

7%7%

6%

5%8% 2%

22%34%

19% 21% 21%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in California by Sector - Dollars of Funding

Healthcare Internet

Energy & Utilities Software (non-internet/mobile)

Computer Hardware & Services Other

Last Five Quarters

Internet Investment Expands in CaliforniaInternet saw its most dominant position of the last 5 quarters and grew its share ofinvestment by 14% versus Q3. Healthcare and Energy lost ground.


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37

7% 4% 8%11% 12%

25%22%

28% 27%31%

25%28%

23% 24%23%

16% 23%23% 18%

21%15% 13%

14%10%

8%11% 9%

4%11% 6%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in California by Series - Number of Deals


Last Five Quarters

0% 0% 1% 1% 1%

13% 11% 13%16% 15%

20%33%

21%

31%

21%

28%

22%32%

21%35%

24%20%

29%16% 12%

14% 13%4%

14% 17%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in California by Series - Dollars of Funding


Last Five Quarters

Early Stage Deal Volume Remains Strong in CaliforniaEarly stage deal volume increased share by 5% as Seed and Series A both continuedtheir upward trend in California. Series C took larger portion of investment dollars.


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MASSACHUSETTS


38


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39

$653

$898

$689

$466

$630

88 8784

87

78

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Massachusetts VC Investment and Deal Volume Trend


Last Five Quarters

Massachusetts Recovers, but Levels Still Down Versus Q2VC funding in Massachusetts jumped 35% versus Q3, but still was down 4% year-over-year. Mass deal count hit its lowest point in five quarters.


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Quarter Highlights

78 deals | $630M

Top Sector# of Deals Healthcare /

Internet (tie)$ of Funding - Healthcare

Top Five Deals

Top Cities

Cambridge18 deals | $258M

Waltham8 deals | $45M

Newton3 deals | $44M

Boston11 deals | $41M

North Lexington2 deals | $26M

Burlington

2 deals | $22MNorthborough

1 deals | $22MWoburn

4 deals | $19MBeverly

3 deals | $17MBoxborough

1 deals | $16M

Genocea BiosciencesNinePoint MedicalRive TechnologyCerulean PharmaAspen Aerogels

29%

29%

9%

6%

10%

0%6%

4%1%

4%

VC Deal Volume (#) in Massachusetts by Sector, Q410

Healthcare

Internet


Energy & Utilities

Mobile & TelecommunicationsComputer Hardware & Services

Industrial


Electronics

All Other

41%

20%

8%

6%

6%

0%

12%

4%

2% 2%

VC Investment ($) in Massachusetts by Sector, Q410

Healthcare

Internet


Energy & Utilities



Industrial


Electronics

All Other

Healthcare & Internet Remain Atop the Rest in MassHealthcare and Internet combined for 68% of investment dollars and 61% of dealvolume. Mobile doubled its share in terms of deals and investment dollars versus Q3.


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Healthcare Investment Share Down SharplyShare of investment in Internet held steady in terms of both deals and dollars.Healthcare retained top spot, but lost share to Industrial and Mobile investments.

41

34% 33% 38% 37% 29%

26%22%

27% 29%29%

10%11%

10% 10%

9%

5% 10%5% 3%

6%3%

6% 4%8%

6%

22% 17% 17%13%

19%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Massachusetts by Sector - Number of Deals

Healthcare Internet

Software (non-internet/mobile) Energy & Uti li ties

Industrial Other

Last Five Quarters

51%42%

56% 49%41%

16%

10%

16%21%

20%

11%

22%

5% 9%

8%

2% 12%14% 4%

6%

2%1%

2%3%

12%

17%12% 8% 13% 14%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Massachusetts by Sector - Dollars of Funding

Healthcare Internet

Software (non-internet/mobile) Energy & Utilities

Industrial Other

Last Five Quarters


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Seed Share Balloons in Mass, but Early Stage Down OverallSeed deal volume grew its share in Mass threefold versus last quarter, but early stageinvesting (Seed + Series A) lost significant ground overall.

42

7% 4% 7% 3%9%

33%27%

36% 38% 25%

28%

28%

28% 36%

33%

15%

19%

16%16%

15%

6%9%

11%5%

7%

11% 13%2% 2%

11%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Massachusetts by Series - Number of Deals


Last Five Quarters

1% 0% 0% 0% 1%

31%

18%24%

33%23%

29%

31% 24%

46%

35%

12%

9%

30%

15%

19%5%

9%

11%

4%

10%23%

33%

10%2%

13%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Massachusetts by Series - Dollars of Funding


Last Five Quarters


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NEW YORK


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New York VC Activity Explodes Deals and Dollars Way UpNew York saw a 5-quarter high in terms of both investment and deal volume up 90%and 29%, respectively, since last quarter; funding was up 63% year-over-year.

44

$286 $319

$355

$245

$46641

5548 51

66

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

New York VC Investment and Deal Volume Trend


Last Five Quarters


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Newsletter


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Telephone

212-292-3148


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Internet Still Dominates the Empire StateInternets dominance of NY continued as 60% of VC funding went to web companies.Healthcare and Mobile combined for over 20% of deal volume.

46

Quarter Highlights

66 deals | $466M

Top Sector# of Deals Internet$ of Funding - Internet

Top Five Deals

Top Cities

New York63 deals | $457M

Brooklyn1 deal | $7M

Long Island City

1 deal | $2MSea Cliff

1 deal |


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Internet and Mobile Capture 70% of NY Deal VolumeInternet share dropped while Mobile and Healthcare held their ground. For the secondquarter in a row, Computer Hardware & Services took a double digit share of dollars.

47

63%53%

73% 71%59%

10%

11%

8% 8%

9%

2%

5%5%

5% 2%5%9%

13% 14%11%

20% 22%

6% 6%12%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in New York by Sector - Number of Deals

Internet Healthcare

Financial Computer Hardware & Services

Mobile & Telecommunications Other

Last Five Quarters

48%

63%70%

63%53%

7%

19%15%

8%

13%18%

8%

6%4%

16% 12%

2% 9% 9%3%

24%

9% 6% 5% 13%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in New York by Sector - Dollars of Funding

Internet Healthcare

Financial Computer Hardware & Services

Mobile & Telecommunications Other

Last Five Quarters


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Its Not All About Early Stage in New YorkShare of early stage investing dropped in terms of deals and dollars on back of sizableSeries C and Series D deals. Seed VC retained strong presence overall.

48

6% 7%16% 17% 13%

30%39%

45% 46%

39%

30%

30%

20%24%

13%

15%

14%11%

5%

25%

6%5%

5% 5%4%

12% 7%2% 2% 7%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in New York by Series - Number of Deals


Last Five Quarters

0% 0% 1% 2% 2%15% 15%

30%

41%

13%

31%

51% 23%

34%

12%

24%

12%25%

10%

44%

2%

6%17% 3%

13%

28%16%

4%9%

16%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in New York by Series - Dollars of Funding


Last Five Quarters


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WASHINGTON


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Washington Venture Funding Sees Five-Quarter LowWashingtons venture resurgence stalled with investment dollars falling 46% from lastquarter and down 28% year-over-year. Deal volume also saw weakness.

50

$165$138

$211 $222

$119

2629

25

34

28

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Washington VC Investment and Deal Volume Trend


Last Five Quarters


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Internet Swallows Over 50% of Washington Deal VolumeInternet owned the Washington investment scene commanding 57% and 46% of dealsand dollars, respectively. Healthcare and Software rounded out the top 3.

51

Quarter Highlights

28 deals | $119M

Top Sector# of Deals Internet$ of Funding - Internet

Top Five Deals

Top CitiesSeattle

12 deals | $69MRedmond

3 deals | $16MBellevue

4 deals | $10MKirkland2 deals | $7M

Tukwila1 deals | $5M

Gig Harbor1 deals | $4M

14%

57%

0%

7%

11%

3%4%

4%

0%

VC Deal Volume (#) in Washington by Sector, Q410

Healthcare

Internet

Energy & Utilities


Software (non-internet/mobile)Computer Hardware & Services

Environmental Services & Equipment


All Other

18%

46%

0%

1%

20%

8%

2%

4%

0%VC Investment ($) in Washington by Sector, Q410

Healthcare

Internet

Energy & Utilities




Environmental Services & Equipment


All Other

DocusignXenon ArcCoronado BiosciencesSkytapCardiac Dimensions


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Internet Eclipses Healthcare in VC ShareHealthcare lost share to both Web and Software in Q4..

52

27%21%

32% 29%

14%

42%41%

28% 38%57%

8%

7% 12%6%

15%

3%8% 6% 7%

8%

14%6% 11%

14%20% 15%

11%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Washington by Sector - Number of Deals

Healthcare Internet

Energy & Utilities Mobile & Telecommunications

Software (non -in ternet/mobile) Other

Last Five Quarters

41%

4%

51% 56%

18%

36%

66%

9%

26%

46%

4%10%

18%

5%16%

1% 9%

1%

3%

7%6%

20%

12% 13%7%

15%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Washington by Sector - Dollars of Funding

Healthcare Internet


Software (non-internet/mobile) Other

Last Five Quarters


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Trend of Early Stage Investment Emerges in WashingtonOverall investment was down in Wash, but absolute figures dont tell the whole storyFor the third straight quarter, share of early stage (Seed + A) volume was up.

53

0% 0% 4%8% 11%

50%

25%

35%36% 42%

20%

40%

43%24%

21%

10% 20%

9%

16%16%5%

10%9%

4%5%15%

5%12%

5%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Washington by Series - Number of Deals


Last Five Quarters

0% 0% 0% 0% 1%

60%

13%

30%

17%27%

12%

22%

40%

32% 18%

1%

48%

22%

23%

47%

7%

13%

7%

1%

6%

20%

4%

27%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Washington by Series - Dollars of Funding


Last Five Quarters


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TEXAS


54


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VC Funding in Texas Falls, but Remains Strong OverallTexas funding fell 16% versus last quarter while deal volume was up. Funding wasstill up 27% year-over-year.

55

$238

$264

$212

$357

$300

39 38

33 3336

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Texas VC Investment and Deal Volume Trend


Last Five Quarters


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Internet and Healthcare Win Top Honors in TexasWeb took over one-third of overall investment in the Lone Star State, with Healthcarenot far behind. Mobile & Telecom also were strong in Q4.

56

Quarter Highlights

36 deals | $300M

Top Sector# of Deals Healthcare$ of Funding - Internet

Top Five Deals

Top Cities

Austin20 deals | $186M

Webster1 deals | $46M

Dallas

3 deals | $27M

Houston4 deals | $12M

San Antonio

3 deals | $10MRichardson

1 deals | $10MAddison

2 deals | $6MAllen

1 deals | $3M

33%

8%

25%

14%

0% 6%

6%

0%

8%

VC Deal Volume (#) in Texas by Sector, Q410

Healthcare

Energy & Utilities

Internet





Automotive & Transportation

All Other

30%

4%36%

5%0%

3%

16%

0%

6%

VC Investment ($) in Texas by Sector, Q410

Healthcare

Energy & Utilities

Internet





Automotive & Transportation

All Other

Whale Shark MediaIDev TechnologiesDachis GroupNew Century HospiceSilverback Acquisitions


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Energy Loses Ground to Healthcare and InternetEnergy, which is a mainstay of the Texas venture scene, fell on both deals and dollars.Energys lost share was reaped by Web and Healthcare companies.

57

31%

11% 12%21%

33%

15%

16%

33% 12%

25%3%

8%

12%24%

8%

5%

16%

18%9%

14%

13%

5%

9%

6%

33%45%

15%27%

19%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Texas by Sector - Number of Deals

Healthcare Internet



Last Five Quarters

36%

6%14%

32% 30%

10%

10%

16%

2%

36%1%

10%

48%32%

4%

6%

13%

14%

11% 5%

16%

11%

4%

13%32%

50%

4% 10%

25%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Texas by Sector - Dollars of Funding

Healthcare Internet



Last Five Quarters


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Texas Continues to be a Destination for Early Stage DealsSeed fell off the map, but early stage deals still commanded over 60% of overall dealvolume in Texas. Early stage investment dollars also held their ground.

58

0% 0%6%

18%

0%

20%33%

39%

47%

63%

35%

33% 11%

12%7%20%

10%

17%

12%

4%5%

10% 22%

6%

11%

20%14%

6% 6%15%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Texas by Series - Number of Deals


Last Five Quarters

0% 0% 1% 1% 1%

13% 11% 13%16% 15%

20%33%

21%

31%

21%

28%

22%32%

21%35%

24%20%

29%16% 12%

14% 13%4%

14% 17%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of VC in Texas by Series - Dollars of Funding


Last Five Quarters


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Definitions Ensuring Data IntegrityWhats Included in our Quarterly Venture Capital Numbers? What is not?

59

Given the importance of venture capital in spurring innovation and entrepreneurship, measuring venture capital activityaccurately is important. We encourage you to review the methodology and definitions employed by us to betterunderstand the numbers presented in this report. If you have any questions about our definitions or methodologicalprinciples, we encourage you to reach out to us directly.

Equity financings into emerging companies.Funding must come from venture capital f irms includingcorporate venture groups.

Fundings of only private companies. Publiccompanies of any kind on any exchange (including PinkSheets) are excluded from our numbers even if theyreceived investment by a venture firm(s)

Companies must be headquartered in the USA. Ourgeographic data is based on the city and state where thecompany receiving investment is headquartered. If acompany has a satellite office/presence in multiple citiesor was founded in a particular city but has moved its HQ,our results reflect only this HQ address.

Only include the investment made in the quarter fortranched investments. If a company does a secondclosing of its Series B round for $5M and previously hadclosed $2M in a prior quarter, only the $5M is reflectedin our results.

Round #s reflect what has closed not what is

intended. If a company indicates the closing of $5M outof a desired raise of $15M, our numbers reflect only theamount which has closed.

Only verifiable fundings are included. Fundings areverified via (1) various federal & state regulatory filings(2) direct confirmation with firm or investor or (3) pressrelease.

Funding close date matters. Fundings are providedbased on funding close date and not on announcementdate.

Angel investment. These are not included innumbers unless an investment round included Angelsinvesting alongside a venture capital firm or corporateventure group.

No contingent funding. If a company receives acommitment for $20M subject to hitting certainmilestones but first gets $8M, only the $8M is includedin our data.

No business development/R&D arrangementswhether transferable into equity now, later ornever. If a company signs a $300M R&D partnershipwith a larger corporation, this is not equity financingnor is it from venture capital firms. As a result, it is notincluded.

Buyouts, Consolidations and Recapitalizations.All three of these of transaction types are commonlyemployed by private equity firms and are tracked byCB Insights. However, they are excluded for thepurposes of this report. Private equity investments into

companies which may have received venture capitalinvestment prior are also not included.

Private placements. These investments also knownas PIPEs (Private Investment in Public Equities) evenif made by a venture capital firm(s) are not included.

Debt/loans of any kind. Venture debt or any kind ofdebt/loan issued to emerging, startup companies evenif included as an additional part of an equity financingis not included. If a company receives $3M with $2Mfrom venture investors and $1M in debt, only the $2Mis included in these statistics.

Government funding. Grants, loans, equityfinancings by the federal government, state agencies

or public-private partnerships to emerging, startupcompanies are not included. Strictly venture orcorporate venture outfits.

Incubator investments. Investments of money asequity or debt and/or services by incubators are notincluded.

Strategic corporate investments. Corporationsmaking strategic investments in companies but not aspart of a specific organized venture group are notincluded.

What is included? What is excluded?


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Q4 2010 Venture Capital Activity Report - CB Insights Release)

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