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NATIONAL VENTURE
CAPITAL ASSOCIATION
YEARBOOK 2014
INCLUDING STATISTICS FROM THE
PricewaterhouseCoopers/National Venture Capital Association
MoneyTree Report based on data from Thomson Reuters
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March 2014
Dear Colleague:
We are delighted to present to you the NVCA 2014 Yearbook, prepared by Thomson Reuters. This is the17thedition in a series launched in early 1998. Since then, much has changed in the industry. One thingthat has not changed, however, is our commitment to bring accurate and responsible transparency to thispowerful economic force called venture capital. You will nd in this publication new and updated chartsthat track investment activity in the United States. Reecting our dynamic environment, for the rst timewe provide a chapter on Growth Equity an asset subclass that did not exist in its present form when weprinted the rst edition of this publication.
More changes are already in the works. For example, in recognition of the strong and broad emergence ofcorporate venture capital groups and direct corporate investment over the past few quarters, we will soon
be changing our methodology to be more inclusive of solo (i.e., without a traditional venture investor inthe round) and early corporate investment into companies. Further, we will also include corporate directinvestment from the corporation itself, not just from a separate or captive entity. Stay tuned.
The industrys goal remains the same: to create fast-growing and sustainable companies, introduce newtechnologies, and improve medical care and patient well-being, while providing an attractive return tothose who trust the industry with their capital. Whether by traditional venture capital, corporate venturecapital, growth equity, or a number of new and energized investment vehicles, we are here to report thatthe beat goes on.
As always, your feedback and suggestions are welcome. Please feel free to contact us at [email protected] through any NVCA director or staff member.
Very truly yours,
Diana Frazier Bobby Franklin John S. Taylor
FLAG Capital Management NVCA President and CEO NVCA Head of Research
NVCA Director and
Chair, Research Committee
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NVCA BOARD OF DIRECTORS 2013-2014
EXECUTIVE COMMITTEE
Josh Green Scott Sandell
Mohr, Davidow Ventures New Enterprise Associates
Chair Chair-Elect
Anne Rockhold Jonathan Callaghan
Accel Partners True Ventures
Treasurer Executive Committee At-Large
Bruce Evans Jonathan Leff
Summit Partneer Deereld Management
Executive Committee At-Large Executive Committee At-Large,
Research Committee
AT-LARGE
Diana Frazier Mark Leschly
FLAG Capital Rho Ventures
Research Chair Research Committee
John Backus Maria Cirino
New Atlantic Ventures .406 Ventures
David Douglass Claudia Fan Munce
Delphi Ventures IBM Venture Capital Group
Norm Fogelsong Venky Ganesan
Institutional Venture Partners Menlo Ventures
Robert Goodman Mark Gorenberg
Bessemer Venture Partners Zetta Venture Partners
Jason Green Adam Grosser
Emergence Capital Partners Silver Lake Kraftwerk
James Healy Ross Jaffe
Sonnova Ventures Versant Ventures
Scott Kupor Ray Leach
Andreessen Horowitz Jumpstart, Inc
David Lincoln Robert Nelsen
Element Partners ARCH Venture Partners
Art Pappas Sue Siegel
Pappas Ventures GE Ventures
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2014
National Venture Capital Association Yearbook
For the National Venture Capital Association
Prepared by Thomson Reuters
Copyright 2014 Thomson Reuters
The information presented in this report has been gathered with the utmost care
from sources believed to be reliable, but is not guaranteed. Thomson Reuters disclaims
any liability including incidental or consequential damages arising from
errors or omissions in this report.
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National Venture Capital Association
1655 Fort Myer Drive, Suite 850Arlington, Virginia 22209-3114
Telephone: 703-524-2549
Telephone: 703-524-3940
www.nvca.org
President and CEO
Bobby Franklin
President Emeritus
Mark G. Heesen
Head of Research
John S. Taylor
Senior Vice President of Federal Policy and Political Advocacy
Jennifer Connell Dowling
Vice President of Federal Life Science Policy
Kelly Slone
Vice President of Federal Policy and Political Advocacy
Emily Baker
Vice President of Communications
Ben Veghte
Vice President of Membership and Member Firm Liaison
Janice Mawson
Vice President of Administration
Roberta Catucci
Director of Business Development
Hannah Veith
Manager of Administration and Meetings
Allyson Chappell
Accounting Manager
Beverley Badley
Research Lab
Mavis Moulterd (Emeritus), Annie Black, Liberty Benjamin
Lab Assistants
Thea Shepherd, Lexi Oscar, Gracie Baker
Thomson Reuters
3 Times Square, 18th FloorNew York, NY 10036
Telephone: 646-223-4431
Fax: 646-223-4470
www.thomsonreuters.com
Global Head of Deals & Private Equity
Stephen N. Case II
Head of Deals and Private Equity Operations
Katarzyna Namiesnik
Global Business Manager Private Equity
Jim Beecher
Editor-in-Charge
David Toll
Global Private Equity Operations Manager
Anna Aquino-Chavez
Press Management
Matthew Toole
Senior Content Specialist
Michael D. Smith
Content Specialist
Paul Pantalla
Data Specialist
Francis S. Tan
Senior Art Director
David Cooke
Sales Manager Publications (Buyouts, VCJ, peHUB)
Greg Winterton (646-223-6787)
ThomsonONE.com Sales:
1-877-365-1455
National Venture Capital Association 2014 Yearbook
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TABLE OF CONTENTS
What is Venture Capital? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Industry Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 11
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Exits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 14
Industry Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 17
Capital Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Investments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Exits: IPOs and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Growth Equity Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
Appendix A: Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Appendix B: MoneyTree Report Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
Appendix C: MoneyTree Geographical Denitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
Appendix D: Industry Codes (VEICs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Appendix E: Industry Sector VEIC Ranges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Appendix F: Stage Denitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Appendix G: Data Sources and Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Appendix H: International Convergence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
Appendix I: US Accounting Rulemaking and Valuation Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Appendix J: Non-US Private Equity . . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . .. . . . . . . . . 125
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WHAT IS VENTURE CAPITAL?
Venture capital has enabled the United States to support its entrepreneur-
ial talent and appetite by turning ideas and basic science into productsand services that are the envy of the world. Venture capital funds build
companies from the simplest form perhaps just the entrepreneur and an
idea expressed as a businessplan to freestanding, mature organizations.
Risk Capital for BusinessVenture capital rms are professional, institutional managers of risk capi -
tal that enables and supports the most innovative and promising compa-
nies. This money funds new ideas that could not be nanced with tradi -
tional bank nancing, that threaten established products and services in a
corporation, and that typically require ve to eight years to be launched.
Venture capital is quite unique as an institutional investor asset class.
When an investment is made in a company, it is an equity investment in a
company whose stock is essentially illiquid and worthless until a company
matures ve to eight years down the road. Follow-on investment provides
additional funding as the company grows. These rounds, typically oc-
curring every year or two, are also equity investment, with the shares al-
located among the investors and management team based on an agreed
valuation. But, unless a company is acquired or goes public, there is
little actual value.Venture capital is a long-term investment.
More Than MoneyThe U.S. venture industry provides the capital to create some of the most
innovative and successful companies. But venture capital is more than
money. Venture capital partners become actively engaged with a com-
pany, typically taking a board seat. With a startup, daily interaction with
the management team is common. This limits the number of startups in
which any one fund can invest. Few entrepreneurs approaching venture
capital rms for money are aware that they essentially are asking for 1/6
of a person! Yet that active engagement is critical to the success of the
edgling company. Many one- and two-person companies have received
funding but no one- or twoperson company has ever gone public!Along
the way, talent must be recruited and the company scaled up. Ask any
venture capitalist who has had an ultra-successful investment and he or
she will tell you that the company that broke through the gravity evolved
from the original business plan concept with the careful input of an expe-
rienced hand.
Deal Flows Where The Buys AreFor every 100 business plans that come to a venture capital rm for fund-ing, usually only 10 or so get a serious look, and only one ends up being
funded. Theventure capital rm looks at the management team, the con-
cept, the marketplace, t to the funds objectives, the value-added po-
tential for the rm, and the capital needed to build a successful business.
A busy venture capital professionals most precious asset is time. These
days, a business concept needs to address world markets, have superb
scalability, be made successful in a reasonable timeframe, and be truly
innovative. A concept that promises a 10 or 20 percent improvement on
something that already exists is not likely to get a close look.
Many technologies currently under development by venture capital rms
are truly disruptive technologies that do not lend themselves to being em-
braced by larger companies whose current products could be cannibalized
by this. Also, with the increased emphasis on public company quarterly
results, many larger organizations tend to reduce spending on research and
development and product development when things get tight. Many tal
ented teams have come to the venture capital process when their projects
were turned down by their companies.
Common Structure Unique ResultsWhile the legal and economic structures used to create a venture capi-
tal fund are similar to those used by other alternative investment asse
classes, venture capital itself is unique. Typically, a venture capital rm
will create a Limited Partnership with the investors as LPs and the rm
itself as the General Partner. Each fund, or portfolio, is a separate part-nership. A new fund is established when the venture capital rm obtains
necessary commitments from its investors, say $100 million. The money
is taken from investors as the investments are made. Typically, an initial
funding of a company will cause the venture fund to reserve three or four
times that rst investment for follow-on nancing. Over the next three to
eight or so years, the venture rm works with the founding entrepreneur to
grow the company. The payoff comes after the company is acquired or
goes public. Although the investor has high hopes for any company get-
ting funded, only one in six ever goes public and one in three is acquired
Venture Capital Backed CompaniesKnown for Innovative Business Models
Employment at IPO and Now
Company As of IPO Current # Chang
The Home Depot 650 331,000 330,350
Starbucks Corporation 2,521 160,000 157,479
Staples 1,693 89,019 87,326
Whole Foods Market, Inc. 2,350 69,500 67,150
eBay 138 31,500 31,36
Venture Capital Backed CompaniesKnown for Innovative Technology Products
Employment at IPO and Now
Company As of IPO Current # Chang
Microsoft 1,153 94,000 92,84
Intel Corporation 460 100,100 99,640
Medtronic, Inc. 1,287 45,000 43,713
Apple Inc. 1,015 76,100 75,08
Google 3,021 53,861 50,840
JetBlue 4,011 12,070 8,059
Source: Global Insight; Updated fromThomsonOne 2/2013
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Economic Alignment of all Stakeholders An American Success StoryVenture capital is rare among asset classes in that success is truly shared.
It is not driven by quick returns or transaction fees. Economic success
occurs when the stock price increases above the purchase price. When
a company is successful and has a strong public stock offering, or is ac-
quired, the stock price of the company reects its success. The entrepre-neur benets from appreciated stock and stock options. The rank and le
employees throughout the organization historically also do well with their
stock options. The venture capital fund and its investors split the capi-
tal gains per a pre-agreed formula. Many college endowments, pension
funds, charities, individuals, and corporations have beneted far beyond
the risk-adjusted returns of the public markets.
Whats AheadMuch of venture capitals success has come from the entrepreneurial spirit
pervasive in theAmerican culture, nancial recognition of success, access
to good science, and fair and open capital markets. It is dependent upon
a good ow of science, motivated entrepreneurs, protection of intellec-
tual property, and a skilled workforce. The nascent deployment of ven-
ture capital in other countries is gated by a countrys or regions cultural
t, tolerance for failure, services infrastructure that supports developing
companies, intellectual property protection, efcient capital markets, and
the willingness of big business to purchase from small companies.
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EXECUTIVE SUMMARY
During 2013, many of the metrics describing the venture capital indus-
try in the United States were similar to those of the prior three years, with
the exception of a pickup in the breadth of the IPO markets. The decline
in capital managed continued as expected, but not as much as some wereanticipating. A record proportion of venture deals focused on companies
in the seed and early stages, while a number of companies long in the
portfolios nally went public, led by Biotechnology companies in the rst
half of 2013. Investment in early-stage life science companies continued
to fall during the year, although a fourth-quarter increase in rst fundings
of Biotechnology companies was encouraging.
Fundraising remained very challenging for the majority of venture
rms. This is largely because of a dearth of healthy exits through 2012
that would have distributed yet-unrealized returns to current fund inves-
tors. Aside from the Facebook IPO in 2012 ($16.0B of the $21.5B raised
in 2012), 2013 was a much-improved year with 81 venture-backed IPOs.
Remarkably, over half of them were Biotechnology companies. Early
signs for 2014 suggest that IPO momentum carried forward into at least
the rst part of the year.
A healthy venture capital ecosystem requires its metrics to be in bal-
ance. And while the quality of new business opportunities, known as deal
ow, remains very high and the best opportunities are getting funded,
stresses remain.
IntroductionThe National Venture Capital Association 2014 Yearbook provides
a summary of venture capital activity in the United States. This ranges
from investments into portfolio companies to capital managed by general
partners to fundraising from limited partners to valuations of companies
receiving venture capital investments to exits of the investments by ei-
ther IPOs or mergers and acquisitions. The statistics for this publication
were assembled primarily from the MoneyTree Report by Pricewater-
houseCoopers and the National Venture Capital Association, based on
data from Thomson Reuters and analyzed through the Thomson ONE.
com (formerly VentureXpert) database of Thomson Reuters, which has
been endorsed by the NVCA as the ofcial industry activity database
Subscribers to Thomson ONE can recreate most of the charts in this pub-
lication and report individual deal detail and more granular statistics thanthose provided herein.
Industry ResourcesThe activity level of the US venture capital industry is roughly half
of what it was at the 2000-era peak. For example, in 2000, 1,050 rms
each invested $5 million or more during the year. In 2013, the count was
roughly half that at 548.
Venture capital under management in the United States by the end o
2013 decreased to $192.9 billion. However, looking behind the numbers
we know that the industry continues to contract from the circa 2004 high
of $288.9 billion. The peak capital under management that year was a
statistical anomaly caused when funds raised at the height of the 2000 tech
bubble were joined by new capital raised post bubble.
The slight downtick in rms and capital managed (Fig. 1.04) in 2013
understates a consolidating industry. The average venture capital rm
shrunk to 6.7 principals per rm from 8.7 just six years earlier. The corre
sponding drop in headcount to under 6,000 principals is almost one-third
lower than 2007 levels. This meant that there was a general increase in the
average amount of capital managed by each principal. It is possible going
forward that the number of principals per rm will increase as the numbe
of rms decreases. This is because the bulk of the capital being commit
ted today is being raised by larger, specialty, and boutique rms. For our
purposes here, we dene a principal to be someone who goes to portfolio
company board meetings. That is, deal partners would be included and
rm CFOs would not be included.
Contrary to some popular misconceptions, only 43 rms managed more
than $1 billion. By comparison, 277 rms managed less than $25 million
CommitmentsThe year 2013 continued to be a very challenging fundraising year for
most venture capital rms in the United States. This was due to a lack of
recent distributions caused by the tight exit markets, lackluster returns by
many venture funds over the past decade compared with the prior decade
and a challenge for the largest alternative asset investors to place money in
many of the smaller funds in this asset class because of scale. Only $16.8
billion was raised by 187 funds. This was considerably less than the $19.6
billion raised in 2012 or the $19.0 billion raised in 2011. The amount o
new commitments each year by venture capital funds continued to be lesthan the amount they invested in companies.
InvestmentsMeasuring industry activity by the total dollars invested in a given year
shows that the industry has remained generally in the $20 billion to $30
billion range since 2002. In 2013, $29.5 billion was invested in 3,382
companies through 4,041 deals. The number of deals was 4% higher than
2012 counts, but was essentially the same as 2011. The number of rst
time fundings increased in 2013 to 1,334 companies from the previous
1,275, but it remains near the top of the healthy range of 1,000 to 1,400
Figure 1.0
Venture Capital Under Management Summary Statistics
1993 2003 2013
No. of VC Firms in Existence 370 951 874
No. of VC Funds in Existence 613 1,788 1,331
No. of Professionals 5,217 14,777 5,891
No. of First Time VC Funds Raised 25 34 53
No. of VC Funds Raising Money This Year 93 160 187
VC Capital Raised This Year ($B) 4.5 9.1 16.8
VC Capital Under Management ($B) 29.3 263.9 192.9
Avg VC Capital Under Mgt per Firm ($M) 79.2 277.5 220.7
Avg VC Fund Size to Date ($M) 40.2 94.4 110.3
Avg VC Fund Size Raised This Year ($M) 48.3 102.9 89.7
Largest VC Fund Raised to Date ($M) 1,775.0 6,300.0 6,300.0
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rst-time fundings in a year. Further parsing the data shows 50% of the in-
vestment dollars going to California companies, down from 53% in 2012
but consistent with the previous three years. The year 2013 saw a record
56% of the nancing rounds going to seed and early stage companies,
compared with a more typical one-third of deals. A carefully watched sta-
tistic is the investment in the life sciences. It is possible that the downward
plummet in rst-time life sciences investment is starting to reverse, ledby Biotechnology, but it is still too early to be sure. Corporate Venture
investment continues to gain considerable strength and presence in the
overall industry.
Software was the leading sector in 2013, receiving 37.3% of the total
dollars. The second largest sector was Biotechnology, which was less than
half that amount at 15.4% of total investment. Among rst fundings, Soft-
ware led the way with 591 companies getting their initial venture capital
rounds. This is more than 46% of the rst fundings. Again in 2013, the
second most active rst-funding sector is Media and Entertainment at 170
rst fundings.
California-domiciled venture capital rms made investments in 38
states in 2013. Approximately 48% of all the money invested in Califor-
nia came from California-domiciled rms. Conversely, California-based
rms concentrated 68% of their investment dollars within the state.
The number and reach of corporate venture capital groups increased
in 2013, along with the visibility of this group. These groups provided
an estimated 10.5% of the venture capital invested by all venture groups.
They were involved in 16.9% of the deals the highest level in ve years.
Going forward, all signs suggest that these groups are becoming more
involved alongside traditional venture rms in deals, as well as initiating
corporate venture group syndicates to do deals in lieu of, or in advance of,
investment rounds by traditional venture rms.
ExitsOnce successful portfolio companies mature, venture funds generally
exit their positions in those companies by taking them public through an
initial public offering (IPO) or by selling them to presumably larger orga-
nizations (acquisition, M&A, or trade sale). This then lets the venture
fund distribute the proceeds to investors, raise a new fund for future in-
vestment, and invest in the next generation of companies. We consider
each type of exit separately.
During 2013, 81 venture-backed companies went public in the United
States, marking the strongest full-year total for the number of new ven-
ture-backed listings since 2007. Remarkably, more than half of them were
Biotechnology IPOs, many of those being modestly sized. While the total
dollars raised in 2012 was higher at $21.5 billion, it is important to re-
member that $16.0 billion of that came from the Facebook IPO alone
The remaining $5.5 billion was raised by the remaining 48 IPOs in 2012
It was a very different story in 2013. $11.1 billion was raised by 81 com-
panies. The increase in mean and median time to exit reects the fact tha
many of these IPOs were mature companies, and many of them were in
the life sciences space, which had been awaiting an IPO opportunity formonths, and in some cases, years.
NVCA is encouraged by the increase in smaller IPOs and biotech IPO
in light of its 2012 legislative successes with the JOBS Act and creating a
pathway for FDA Reform.
The M&A space continued to soften in 2013, with the total number o
deals falling from 473 in the prior year to 376. Total proceeds fell by 27%
Note that only 94 of the 376 acquisitions had reported deal values. Histori
cally, deals with unreported sales prices are fairly diminutive, and in many
cases, re sales. However, an increasing number of deal term sheets spec
ify a non-disclosure restriction on all parties. So going forward, all but the
largest and most visible acquisitions may be hard to measure. Observers
have wondered why, given the huge amounts of cash on the balance sheet
of technology and Biotechnology giants, more acquisitions are not occur-
ring. We did see a urry of acquisitions in early 2014, perhaps signaling
an increase in that kind of activity.
Growth EquityThis edition of the NVCA Yearbook, prepared by Thomson Reuters, for
the rst time proles US growth equity investment in its own chapter. Th
NVCA believes growth equity investing is an important segment of the
overall venture capital industry. Venture capitalists help create and grow
companies; growth equity investors are strongly focused on the growth
component of that mission and help companies scale through fat part of
their hiring curves. The NVCA also believes that growth equity invest-
ing is a critical component of the emerging growth company nancing
continuum and has become, in many respects, the private alternative to
the public markets for both emerging growth companies and their earlier
stage venture capital backers.
Growth equity really emerged as an asset class in 2000 and continues
strong today. In 2013, we identied 342 growth equity deals in the United
States. This compares with 406 in 2012, but is very much in line with
the past several years. A disclosed $12.3 billion in equity investment was
reported for 2013. This does not count the approximately 105 deals for
which no dollar equity amounts were disclosed.
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50
100
150
200
250
300
350
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
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00
20
01
20
02
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20
05
20
06
20
07
20
08
20
09
20
10
2011
20
12
20
13
($
Billions)
Year
Figure 2.0Capital Under Management
U.S. Venture Funds ($ Billions)1985 to 2013
0
20
40
60
80
100
120
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
($
Billions)
Year
Figure 3.0Capital Commitments
To U.S. Venture Funds ($ Billions)1985 to 2013
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Figure 5.0Venture Capital Investments in 2013 By Industry Group
Industry Group # Companies # Deals InvestmentAmt ($Bil)
# Companies # Deals InvestmentAmt ($Bil)
Information Technology 2,360 2,784 20 1009 1009 3.5
Medical/Health/Life Science 649 816 6.9 167 167 1.2
Non-High Technology 373 440 2.7 157 157 0.4
Total 3,382 4,041 29.6 1,334 1,334 5.1
Initial InvestmentsAll Investments
0
20
40
60
80
100
120
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
ons
Year
Figure 4.0Venture Capital Investments ($ Billions)
1985 to 2013
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Seed
3%
Early Stage
34%
Expansion
33%
Later Stage
30%
Figure 6.0Venture Capital Investments in 2013
By Stage
Biotechnology
15%Business Products and
Services 0.4%
Computers and Peripherals 2%
Consumer Products and
Services 4%
Electronics/Instrumentation
1%Financial Services
2%
Healthcare Services
1%
Industrial/Energy
5%IT Services
7%
Media and Entertainment
10%
Medical Devices and
Equipment
7%
Networking and Equipment
2%
Retailing/Distribution
1%
Semiconductors
2%
Software
37%
Telecommunications
2%
Other
0.2%
Figure 7.0Venture Capital Investments in 2013
By Industry Sector
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Figure 8.0 2013 Investments By State
State Number of Companies
Pct ofTotal
Investment($ Millions)
Pct ofTotal
California 1,280 40% 14,769.7 50%
Massachusetts 326 10% 3,079.3 10%
New York 287 9% 2,870.4 10%
Texas 101 3% 1,315.5 4%
Washington 134 4% 913.2 3%
Maryland 76 2% 664.5 2%
Virginia 85 3% 593.8 2%
Pennsylvania 154 5% 446.5 2%
Illinois 49 2% 434.9 1%
Colorado 62 2% 428.8 1%
All Others 676 21% 4,028.6 14%
Total 3,230 29,545.2
Figure 9.0 Venture-Backed IPOs
Year Num of IPOs Offer Amount($Mil)
Med Offer Amt($Mil)
Mean Offer Amt($Mil)
Post Offer Value($Mil)
Med Post Value($Mil)
Mean Post Value($Mil)
Median Age AtIPO (Years)
Mean Age At IPO(Years)
1985 48 763 13 16 2,020 37 48 3.0 4.0
1986 105 2,417 13 23 166,032 52 1866 4.0 4.0
1987 86 2,125 17 25 10,972 46 155 4.0 4.0
1988 43 769 15 18 21,117 51 571 3.0 4.0
1989 42 873 16 21 4,443 50 131 4.0 4.0
1990 47 1,108 20 24 5,886 60 178 4.0 4.0
1991 120 3,726 27 31 17,611 81 202 5.0 5.0
1992 150 5,443 24 36 15,955 68 146 5.0 5.0
1993 175 6,154 25 35 14,808 75 130 5.0 6.0
1994 138 3,952 24 29 10,344 68 94 5.0 5.01995 184 7,859 36 43 19,300 104 152 4.0 5.0
1996 256 12,716 35 50 51,511 112 240 3.0 4.0
1997 141 5,829 33 41 19,101 99 148 3.0 6.0
1998 78 4,125 43 53 24,655 164 324 3.0 3.0
1999 280 23,975 69 86 147,341 304 532 3.0 3.0
2000 238 27,443 83 115 108,783 325 494 3.0 4.0
2001 37 4,130 80 112 19,233 327 534 4.0 4.0
2002 24 2,333 89 97 8,322 266 347 3.0 5.0
2003 26 2,024 71 78 7,412 252 285 5.0 6.0
2004 82 10,032 70 122 50,268 254 613 6.0 6.0
2005 59 5,113 68 87 39,702 202 673 5.0 5.0
2006 67 7,065 86 105 71,124 283 1078 5.0 6.0
2007 91 12,339 98 136 68,203 365 749 6.0 6.0
2008 7 765 83 109 3,645 278 521 7.0 7.0
2009 13 1,980 123 152 9,192 548 707 6.0 7.0
2010 70 7,774 93 111 114,981 428 1643 5.0 6.0
2011 51 10,690 106 210 94,657 606 1856 6.0 7.0
2012 49 21,460 89 438 122,168 371 2493 7.0 8.0
2013 81 11,068 91 137 62,700 354 784 7.0 8.0
*Age at IPO is defined as time elapsed from first funding round until IPO date.
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Figure 10.0Venture-Backed Mergers & Acquisitions by Year
Year Number Total Number Known Price Average
1985 7 3 300.2 100.1
1986 8 1 63.4 63.4
1987 11 4 667.2 166.8
1988 17 9 920.7 102.3
1989 21 10 746.9 74.7
1990 19 7 120.3 17.2
1991 16 4 190.5 47.6
1992 69 43 2119.1 49.3
1993 59 36 1332.9 37.0
1994 84 57 3208.4 56.3
1995 92 58 3801.8 65.5
1996 108 76 8230.8 108.3
1997 145 100 7798.0 78.0
1998 189 113 8002.0 70.8
1999 228 155 38710.6 249.7
2000 379 245 79996.4 326.5
2001 384 175 25115.6 143.5
2002 365 166 11913.2 71.8
2003 323 134 8240.8 61.5
2004 402 199 28846.1 145.0
2005 446 201 19717.3 98.1
2006 484 208 24291.0 116.8
2007 488 201 30745.5 153.0
2008 417 134 16236.9 121.2
2009 351 109 12364.9 113.4
2010 523 150 17707.3 118.0
2011 490 169 24093.2 142.6
2012 473 132 22694.2 171.9
2013 376 94 16586.5 176.5
($ Millions)
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Figure 11.0Growth Equity Investments ($ Billions)
2000 to 2013*
0
5
10
15
20
25
30
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
($
Billions)
Year
Totals include only disclosed amounts. Many growth equity deal amounts are not reported.
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INDUSTRY RESOURCES
The activity level of the US venture capital industry is roughly half of what it was at the 2000-era peak. For example, in 2000, 1,050 rms each invested
$5 million or more during the year. In 2013, the count was roughly half that at 548.
Venture capital under management in the United States by the end of 2013 decreased to $192.9 billion as calculated using the methodology described
below. However, looking behind the numbers, we know that the industry continues to contract from the circa 2006 high of $288.9 billion. The peakcapital under management that year was a statistical anomaly caused by funds raised at the height of the 2000 tech bubble were joined by new capita
raised post bubble.
The slight downtick in rms and capital managed (Fig. 1.04) in 2013 perhaps understates a consolidating industry. The average venture capital rm
shrunk to 6.7 principals per rm from 8.7 just six years earlier. The corresponding drop in headcount to under 6,000 principals is almost one-third
lower than 2007 levels. This meant that there was a general increase in the average amount of capital managed by each principal. It is possible going
forward that the number of principals per rm will increase as the number of rms decreases. This is because the bulk of the capital being committed
today is being raised by larger, specialty, and boutique rms. For our purposes here, we dene a principal to be someone who goes to portfolio company
board meetings. That is, deal partners would be included and rm CFOs would not be included.
Geographic location of the largest venture rms is quite concentrated. 49% of the industrys California-domiciled rms manage capital, although these
rms may be actively investing in other states and countries. This concentration has been consistent for several years and may increase going forward
given the movement of some East Coast funds westward. Taken together, the top ve states (California, Massachusetts, New York, Connecticut, and
Illinois) hold 81.1% of total venture capital in this country, essentially the same as a year ago.
Contrary to some popular misconceptions, only 43 rms managed more than $1 billion. By comparison, 277 rms managed less than $25 million.
Methodology
Historically, we have calculated industry size using a rolling eight
years of fundraising proxy for capital managed, number of funds, num-
ber of rms, etc. The number of rms in existence will vary on a rolling
eight-year basis as rms raise new funds or do not raise funds for more
than eight years. Currently, we know the industry is consolidating, but the
eight-year model now includes fund vintage years 2006-2013.
Under this methodology, we estimate that there are currently 874 rms
with limited partnerships in existence. To clarify, this is actually stating
that there are 874 rms that have raised a venture capital fund in the last
eight years. In reality, only 548 of them invested at least $5 million in
companies in 2013, and 136 of them invested more than $5 million in rst
rounds for a company.
For this publication, we are primarily counting the number of rms with
limited partnerships and are excluding other types of investment vehicles.
From that description, it may appear that the statistics for total industry
resources may be underestimated. However, this must be balanced with
the fact that capital under management by captive and evergreen funds is
difcult to compare equitably to typical limited partnerships with xed
lives. For this analysis only, the rms counted for capital under manage -
ment include rms with xed-life partnerships and venture capital funds
they raised. If a rm raised both buyout and venture capital funds, onlythe venture funds would be counted in the calculation of venture capital
under management.
Venture capital under management can be a complex statistic to esti-
mate. Indeed, capital under management reported by rms can differ from
rm to rm as theres not one singular denition. For example, some rms
include only cumulative committed capital, others may include commit-
ted capital plus capital gains, and still other rms dene it as committed
capital after subtracting liquidations. To complicate matters, it is difcult
to compare these totals to European private equity rms, which include
capital gains as part of their capital under management measurements.
For purposes of the analysis in this publication, we have tried to clarify
the industry denition of capital under management as the cumulative to
tal of committed capital less liquidated funds or those funds that have
completed their life cycle. Typically, venture capital rms have a stated
10-year xed life span, except for life science funds, which are often
established as 12-year funds. Figure 1.09 shows the reality of fund life
Thomson Reuters calculates capital under management as the cumulative
amount committed to funds on a rolling eight-year basis. Current capital
under management is calculated by taking the capital under management
calculation from the previous year, adding in the current years funds
commitments, and subtracting the capital raised eight years prior.
For this analysis, Thomson Reuters classies venture capital rms us
ing four distinct types: private independent rms, nancial institutions
corporations, and other entities. Private independent rms are made up
of independent private and public rms including both institutionally and
non-institutionally funded rms and family groups. Financial institu
tions refers to rms that are afliates and/or subsidiaries of investmen
banks and non-investment bank nancial entities, including commercia
banks and insurance companies. The corporations classication includes
venture capital subsidiaries and afliates of industrial corporations. In
2013, we will modify the methodology to reect virtually all direct cor
porate investment because many of the corporate venture investors do no
operate out of a separate fund or group. The capital under managemenstatistics reported in this section consist primarily of venture capital rms
investing through limited partnerships with xed commitment levels and
xed lives and do not include non-vintage evergreen funds or true cap
tive corporate industrial investment groups without xed commitmen
levels. The term evergreen funds refers to funds that have a continuous
infusion of capital from a parent organization, as opposed to the xed life
and commitment level of a closed-end venture capital fund.
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Figure 1.01Capital Under Management U.S. Venture Funds ($ Billions)
1985 to 2013
0
50
100
150
200
250
300
350
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
($
Billions)
Year
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Figure 1.03Distribution of Firms By Capital Managed 2013
Figure 1.02Total Capital Under Management By Firm Type 1985 to 2013
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Private Independent 11,766 14,721 17,459 18,850 22,369 22,722 21,893 22,643 25,162 28,490 33,308 40,201 51,940 76,560 119,121
Financial Institutions 3,388 3,520 3,447 3,190 2,719 2,793 2,384 2,214 2,431 2,873 3,688 5,070 7,061 10,238 15,291
Corporations 1,582 1,545 1,895 1,989 1,931 1,963 1,907 2,032 1,517 1,564 1,526 2,219 2,531 3,425 8,169
Other 864 914 900 871 781 722 616 312 190 273 378 410 667 877 1,119
Total 17,600 20,700 23,700 24,900 27,800 28,200 26,800 27,200 29,300 33,200 38,900 47,900 62,200 91,100 143,700
Figure 1.02 (Continued)Total Capital Under Management By Firm Type 1985 to 2013
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Private Independent 187,356 221,327 222,028 224,828 233,595 241,637 255,315 239,643 194,573 171,016 174,722 186,032 186,676 179,202
Financial Institutions 22,980 24,459 23,945 23,015 21,659 21,110 18,325 13,914 6,034 4,708 5,620 7,734 7,970 6,615
Corporations 12,995 14,153 14,126 13,886 13,627 13,467 13,297 8,990 4,294 3,125 3,688 4,860 4,892 6,401Other 1,469 2,061 2,201 2,170 2,219 1,986 1,963 1,754 1,399 851 670 674 662 682
Total 224,800 262,000 262,300 263,900 271,100 278,200 288,900 264,300 206,300 179,700 184,700 199,300 200,200 192,900
0
50
100
150
200
0-10
10-25
25-50
50-100
100-25
0
250-50
0
500-10
00
1000
+
164
113 114
107
132
82
5343
This chart shows capital committed to US venture firms in active funds. While much of the capital is managed by larger firms, of the 808 firms included in this calculation at theend of 2013, roughly 62% of them (498) managed $100 million or less. By comparison, just 43 firms managed active funds totaling more than $1 billion.
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Figure 1.05Number of Active Investors 1985 to 2013
Year # of ActiveInvestors
# of Active FirstRound Investors
# of Active LifeScience Investors
1985 92 11 1
1986 115 24 12
1987 112 29 13
1988 119 32 26
1989 116 22 23
1990 101 25 18
1991 81 14 15
1992 104 34 31
1993 92 35 29
1994 110 46 33
1995 184 95 53
1996 251 122 631997 344 138 83
1998 411 169 87
1999 717 321 106
2000 1,050 546 148
2001 760 220 155
2002 534 137 147
2003 509 136 165
2004 579 202 201
2005 562 183 193
2006 572 192 197
2007 630 238 236
2008 602 212 219
2009 463 105 173
2010 508 136 177
2011 549 159 195
2012 534 139 175
2013 548 136 179
Firms included in each count must have invested $5 million in that year in thatcategory. Life Sciences investor count includes investment in companies inthe two MoneyTree Categories: Biotechnology/Pharma and Medical Devices/
Equipment.
Figure 1.06Principals Information
Year No.PrincipalsPer Firm
EstimatedIndustry
Principals
Avg MgtPer Principal
($M)
2007 8.7 8665 30.0
2008 8.5 7293 28.3
2009 8.6 6760 26.4
2010 8.0 6328 25.7
2011 7.4 6231 28.6
2012 7.0 5887 33.8
2013 6.7 5891 32.8
Figure 1.07Top 5 States By Capital Under
Management 2013
State ($ Millions)
CA 94,076.6
MA 32,636.6
NY 19,480.4
CT 5,815.1
IL 4,517.3
Total* 156,526.1
*Total includes above 5 states only
The correct interpretation of this chart is that since the beginning of the in-dustry to the end of 2013, 1,938 firms had been founded and 4,957 funds hadbeen raised. Those funds totaled $569.2 billion. At the end of 2013, 874 firmsas calculated using our eight-year methodology managed 1,331 individualfunds, with each fund typically being a separate limited partnership. Capitalunder management, again calculated using a rolling eight years of fundrais-
ing, by those firms at the end of 2013 was $192.9 billion.
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Figure 1.08Capital Under Management By State 1985-2013
State 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
CA 5,024 5,974 6,815 7,051 8,318 8,192 8,257 8,258 9,062 9,978 12,015 15,379 20,289 27,452 51,226
MA 2,252 2,580 3,409 3,775 4,179 4,057 3,761 4,636 4,830 5,179 6,553 6,980 9,859 15,397 22,905
NY 3,382 4,428 4,370 4,160 5,598 5,805 5,455 5,308 5,904 6,968 8,246 9,995 10,311 19,676 26,659
CT 1,297 1,444 1,807 1,876 1,714 1,713 1,570 1,665 1,927 2,088 2,064 2,194 3,323 4,492 6,787
IL 474 493 725 907 863 876 840 944 1,202 1,275 1,419 1,263 1,939 2,191 3,693
TX 458 493 727 726 798 840 777 809 935 1,143 1,145 1,233 1,688 3,001 4,797
PA 281 347 376 396 564 601 604 598 569 738 822 1,332 1,750 2,105 3,090
NJ 616 713 752 740 736 954 885 549 511 695 958 1,489 1,563 2,177 2,715
DC 36 38 38 40 41 42 42 40 25 24 146 1,698 2,382 2,504 2,661
WA 316 409 387 425 398 385 199 243 227 178 299 463 680 1,081 1,796
MD 91 95 121 117 159 164 98 115 374 784 914 1,523 2,012 2,649 3,513
CO 365 431 399 518 618 575 557 531 616 565 475 552 867 1,165 3,337
VA 73 79 79 85 105 92 56 42 35 32 48 73 252 508 1,238
NC 34 55 87 90 125 114 110 111 108 146 123 294 620 806 1,009
MN 200 297 340 677 749 886 815 768 841 896 877 514 618 715 1,093
UT 9 19 20 15 15 16 16 10 10 25 31 31 94 96 131
MI 112 120 126 123 124 38 14 14 13 10 41 41 66 77 439
GA 89 95 176 260 263 276 264 263 433 432 434 361 765 1,077 1,164
TN 103 128 192 185 216 260 278 271 199 291 306 455 465 745 1,059
DE 39 41 40 39 47 41 41 14 41 51 100 122 115 117 116
MO 562 586 619 596 603 658 656 645 107 137 119 125 148 111 217
OH 860 897 976 838 256 259 275 305 427 469 447 377 692 766 1,247
FL 125 131 173 193 196 133 110 98 151 223 321 304 380 690 1,072
IN 45 56 56 78 97 88 80 97 99 109 111 194 176 192 207
WI 183 100 99 96 104 104 79 79 81 163 168 196 180 204 174
AL 126 132 132 128 135 137 137 138 6 6 6 6 5 24 33
AZ 41 44 44 73 75 76 75 34 44 43 44 10 10 38 38
LA 7 7 7 7 7 5 2 11 22 31 49 90 277 367 444
KY 15 16 16 16 0 0 0 0 0 7 21 21 21 21 21
ME 1 1 20 25 26 26 26 28 29 98 89 87 88 89 207
ID 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
ND 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
OK 1 29 29 28 37 38 37 37 38 9 10 32 23 67 66
OR 170 177 205 241 244 247 229 117 73 74 77 30 30 40 40
NM 71 100 136 133 170 257 244 232 205 179 154 152 121 12 12
SD 0 0 0 0 0 0 0 0 0 0 0 10 10 85 84
HI 2 2 2 2 2 2 2 0 0 0 2 2 2 2 11
KS 0 0 0 0 0 13 13 13 14 14 37 37 57 43 43
IA 50 52 105 102 81 82 62 62 54 55 5 5 16 17 16
VT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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Figure 1.08 (Continued)Capital Under Management By State 1985-2013
State 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
NH 24 25 25 50 50 51 50 51 27 27 47 19 66 67 66
NE 0 0 0 1 1 1 1 1 11 11 105 137 139 141 140
MT 0 1 1 1 1 1 1 1 1 0 0 0 0 0 0
MS 0 0 0 0 0 0 0 0 0 0 11 11 11 12 11
PR 0 0 0 0 0 9 9 9 9 9 9 9 49 40 40
WY 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
SC 1 1 1 1 15 15 15 15 15 15 29 52 37 37 37
RI 15 16 16 36 37 37 36 36 22 22 23 0 2 2 2
NV 0 0 0 0 0 0 0 0 0 0 0 0 0 0 24
WV 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
AR 2 2 2 2 2 2 2 0 0 0 0 0 0 0 19
UNK 46 48 48 47 31 31 21 0 0 0 0 0 0 0 0
AK 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 17,600 20,700 23,700 24,900 27,800 28,200 26,800 27,200 29,300 33,200 38,900 47,900 62,200 91,100 143,700
Figure 1.08bCapital Under Management By State 1985-2013
State 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
CA 85,153 105,283 105,172 107,896 113,719 119,881 128,655 117,244 100,374 87,469 90,424 96,923 99,386 94,077
MA 37,341 45,970 47,440 47,019 47,553 48,784 53,712 50,417 37,146 30,861 30,528 30,209 32,914 32,637
NY 38,938 39,981 38,421 37,176 36,710 36,242 29,115 25,441 13,205 12,198 13,599 18,628 17,653 19,480
CT 8,260 10,623 10,462 10,431 12,066 11,984 13,336 11,699 10,426 7,428 8,201 8,940 6,928 5,815
IL 4,308 4,747 5,202 5,559 5,685 5,163 5,286 4,239 3,620 3,282 3,065 4,595 4,451 4,517
TX 6,881 8,001 7,932 7,806 8,259 8,486 8,242 6,589 5,467 4,193 4,057 4,735 4,455 4,215
PA 6,241 6,344 6,241 6,532 6,439 6,509 7,037 7,143 4,642 4,482 4,495 4,250 4,220 3,623
NJ 3,633 4,315 4,231 4,444 4,083 4,074 5,160 5,022 4,135 3,917 3,965 3,691 3,503 3,447
DC 3,899 4,172 4,739 4,616 3,401 3,582 4,641 5,047 4,833 4,632 4,049 4,527 4,193 3,369
WA 2,803 3,687 3,691 3,568 4,629 4,590 4,597 5,174 4,625 3,721 3,691 3,708 2,943 3,303
MD 5,119 5,383 5,165 5,047 4,811 4,762 4,744 4,433 2,934 3,005 2,927 3,134 3,282 2,854
CO 4,781 5,293 5,438 5,416 5,229 4,882 4,664 3,011 1,603 974 1,139 1,148 1,187 1,635
VA 2,524 2,638 2,652 2,822 2,868 3,338 3,367 3,014 1,801 2,226 2,271 2,081 2,056 1,583
NC 1,367 1,448 1,599 1,803 1,644 1,468 1,678 1,564 1,211 1,238 1,730 1,631 1,726 1,558
MN 2,238 2,189 2,366 2,359 2,361 2,441 2,593 2,473 1,639 1,657 1,319 1,323 1,426 1,531
UT 268 475 449 560 589 546 651 1,259 1,335 1,144 1,209 1,245 1,422 1,429
MI 588 591 590 631 859 912 946 685 919 976 1,065 1,263 1,045 1,203
GA 2,311 2,160 2,154 2,077 2,109 1,835 1,940 1,931 808 783 787 921 882 1,122
TN 1,237 1,281 1,162 1,174 1,043 1,089 887 716 624 614 840 857 845 795
DE 114 80 69 28 15 15 15 251 256 404 504 653 755 756
MO 307 450 418 407 504 1,232 1,293 1,385 1,317 1,182 1,189 1,192 1,324 561
OH 1,850 1,874 1,876 1,855 1,986 1,806 1,722 1,329 713 565 522 573 456 529
FL 1,785 1,751 1,684 1,592 1,577 1,802 1,525 1,284 557 801 875 832 834 529
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Figure 1.08b (Continued)Capital Under Management By State 1985-2013
State 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
IN 663 662 651 684 593 595 608 617 136 342 343 309 344 345
WI 246 245 152 152 133 105 207 254 182 185 212 237 309 339
AL 107 107 107 155 173 225 227 219 359 363 366 391 376 317
AZ 101 104 145 180 180 199 171 173 130 118 263 261 311 295
LA 476 651 648 631 663 502 431 353 336 196 265 282 217 249
KY 21 21 14 14 14 21 219 221 226 228 230 216 223 216
ME 202 290 218 219 214 215 310 194 198 108 109 109 110 110
ID 14 14 14 14 14 14 84 86 73 74 74 74 75 75
ND 0 0 0 0 0 0 0 0 13 13 14 14 14 58
OK 140 140 139 139 117 117 111 121 47 47 48 48 48 50
OR 100 100 112 83 85 85 76 78 34 40 29 29 38 46
NM 12 12 12 33 35 69 74 77 79 80 114 84 83 42
SD 178 178 177 177 175 175 103 113 32 32 48 48 40 40
HI 11 11 11 9 16 16 16 7 14 14 43 44 36 36
KS 42 42 42 19 19 0 0 0 0 0 0 14 14 34
IA 16 60 60 55 65 53 60 67 69 39 39 39 29 29
VT 16 43 43 43 43 43 43 57 41 14 19 19 19 29
NH 65 65 65 46 47 0 11 11 11 11 11 11 16 16
NE 175 165 164 71 38 38 38 38 0 0 2 2 3 3
MT 0 0 0 0 0 0 2 2 2 2 2 2 2 2
MS 11 39 39 28 28 28 29 30 30 1 1 1 1 1
PR 39 68 68 68 68 29 29 30 31 1 1 1 1 1
WY 118 117 117 117 117 118 118 119 0 0 0 0 0 0
SC 36 37 51 38 15 20 20 20 21 20 5 6 6 0
RI 2 26 26 35 35 33 33 33 34 10 10 0 0 0
NV 23 23 33 33 33 33 33 9 10 10 0 0 0 0
WV 21 21 21 21 21 21 21 21 0 0 0 0 0 0
AR 19 19 19 19 19 19 19 0 0 0 0 0 0 0
UNK 0 0 0 0 0 0 0 0 0 0 0 0 0 0
AK 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 224,800 262,000 262,300 263,900 271,100 278,200 288,900 264,300 206,300 179,700 184,700 199,300 200,200 192,900
Figure 1.09Life of IT Funds in Years
Life of IT Funds In Years % of Funds
=19 10%
This chart tracks the year in which a 10-year fund is, infact, dissolved. These later periods are referred to asout years. Historically, after the 10th year, only a fewcompanies that typically do not have huge upside potentiaremain in the portfolios. But the slow pace of exits in recenyears has resulted in a number of good, mature companiesremaining in portfolios well past the nominal 10-year markLife science funds tend to have lives two years longer thantypical technology funds. In preparing this chart, partialyears are rounded to the nearest whole year. So 10.4 yearswould round to 10 years, and 10.5 years would round up to11 years. The median life span of a fund in this analysis is14.17 years.
Source: Adams Street Partners, based on2010 analysis of dissolved funds.
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CAPITAL COMMITMENTS
MethodologyThe Thomson Reuters/National Venture Capital Association sample in-
cludes US-based venture capital funds. Classications are based on the
headquarters location of the fund, not the location of the venture capital
rm. The sample excludes fund of funds.
Effective November 1, 2010, Thomson Reuters venture capital fund
data has been updated in order to provide more consistent and relevant
categories for searching and reporting. As a result of these changes, there
may be shifts in fundraising statistics from legacy editions of this publica-
tion due to reclassication of funds based on analysis of actual activity by
primary market, nation, and/or fund stages.
As dened by Thomson Reuters, capital commitments, also known as
fundraising, are rm capital commitments to private equity/venture capi-
tal limited partnerships by outside investors. For purposes of these statis-
tics, the terms capital commitments, fundraising, and fund closes
are used interchangeably. There are three data sources for tracking capital
commitments: (1) SEC lings that are regularly monitored by our research
staff, (2) surveys of the industry routinely conducted by Thomson Re-
uters, and (3) veried industry press and press releases from venture rms
Capital commitments are stated on either (1) a calendar-year basis when
committed (for example, throughout this chapter) or (2) a vintage-year
basis, which is designated once the fund starts investing (for example
gure 1.04). The data in this chapter is by calendar year and incrementally
measures how much in new commitments funds raised during the calen
dar year. Consider, for example, a venture capital rm that announces i
will begin raising a $200-million fund in late 2011, raises $75 million in
2012, and subsequently raises the remaining $125 million in 2013. In this
chapter, nothing would be reected in 2011, $75 million would be counted
in 2012, and $125 million would be counted in 2013. Assuming it started
investing and made its rst capital call in 2013, the entire fund would then
be considered to be a vintage year 2013 fund. In Figure 1.04, for example
this hypothetical fund would show in the totals for 2013.
Note that fund commitments presented in this publication do not in
clude those corporate captive venture capital funds that are funded by a
corporate parent, which do not typically raise capital from outside inves-
tors.
The year 2013 continued to be a very challenging fundraising year for most venture capital rms in the United States. This is due to a lack of recent
distributions caused by the tight exit markets, lackluster returns by many venture funds over the past decade compared with the prior decade, and a
challenge for the largest alternative asset investors to place money in many of the smaller funds in this asset class because of scale. Only $16.8 billion
was raised by 187 funds. This is considerably less than the $19.6 billion raised in 2012 or the $19.0 billion raised in 2011. The amount of new commit-ments each year by venture capital funds continues to be less than the amount they invested in companies.
The top fundraising state in 2013 was Massachusetts at $5.5 billion, which edged typical leader California at $5.3 billion. New York was third largest
at about half that amount. Much further behind, Washington state and Virginia rounded out the top ve. Combined, Massachusetts and California funds
raised 64% of the total. Adding in New York, the top three states raised more than three-quarters (77%) of the total amount.
The Thomson Reuters taxonomy considers venture capital and buyout/mezzanine to be the two components of Private Equity. Figures 2.02 and 2.05
show venture capitals decreasing share of the private equity dollars. Venture capital raised 24% of the asset class allocations in 2009 compared with
11% in 2013.
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0
20
40
60
80
100
120
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
($
Billions)
Year
Figure 2.01Capital Commitments To U.S. Venture Funds ($ Billions)
1985 to 2013
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Figure 2.02Capital Commitments To Private Equity Funds 1985-2013
Year Sum ($Mil) % of Total PE No. Funds Sum ($Mil) No. Funds Sum ($Mil) No. Funds
1985 3,759.9 56% 118 2,971.8 21 6,731.7 139
1986 3,584.5 42% 101 5,043.7 32 8,628.2 133
1987 4,379.1 21% 116 16,234.6 47 20,613.6 163
1988 4,209.7 28% 104 10,946.4 54 15,156.1 158
1989 4,918.8 29% 106 12,068.5 78 16,987.3 184
1990 3,077.5 26% 85 8,831.5 64 11,909.0 149
1991 1,900.3 31% 40 4,242.1 27 6,142.4 67
1992 5,223.1 33% 80 10,752.5 58 15,975.6 138
1993 4,489.2 21% 93 16,961.7 81 21,451.0 174
1994 7,636.7 27% 136 20,157.0 99 27,793.7 235
1995 9,387.3 26% 161 27,040.7 108 36,428.0 269
1996 11,550.0 26% 168 32,789.4 104 44,339.3 272
1997 17,741.9 30% 242 42,165.3 134 59,907.2 376
1998 30,641.7 33% 290 61,636.4 172 92,278.1 462
1999 53,420.2 51% 428 51,363.2 164 104,783.4 592
2000 101,417.9 56% 634 79,164.8 170 180,582.7 804
2001 38,923.4 43% 324 51,388.3 137 90,311.7 461
2002 10,388.1 23% 203 35,123.3 124 45,511.4 327
2003 9,144.7 20% 160 35,946.4 123 45,091.1 283
2004 17,656.3 23% 211 59,837.4 158 77,493.7 369
2005 30,071.9 22% 233 107,746.6 206 137,818.6 439
2006 31,107.6 17% 236 152,899.7 219 184,007.3 455
2007 29,401.0 11% 235 234,460.4 266 263,861.4 501
2008 25,052.7 12% 214 176,340.7 232 201,393.5 446
2009 16,122.0 24% 159 50,145.9 149 66,267.9 308
2010 13,243.3 20% 173 51,901.5 177 65,144.8 350
2011 18,962.3 21% 186 70,344.2 210 89,306.5 396
2012 19,554.6 15% 208 108,076.4 226 127,631.0 434
2013 16,765.7 11% 187 130,256.2 214 147,021.9 401
Venture Capital Buyouts and Mezzanine Capital Total Private Equity
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Figure 2.03Venture Capital Fund Commitments 1985-2013 ($ Millions)
State 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
MA 201.88 1,460.41 546.89 279.00 2,260.07 489.77 473.90 493.63 940.19 1,860.48 2,364.08 1,516.09 3,757.76 9,346.10 9,065.81 15,399.96 3,092.69 7,754.42 1,233.34 2,148.71
CA 1,249.69 972.35 1,268.36 966.91 1,523.51 1,010.69 549.12 1,331.19 1,388.50 1,829.06 3,106.99 3,724.04 5,717.43 8,525.24 21,928.12 44,218.83 14,166.13 2,767.31 5,634.15 8,731.29
NY 534.28 356.09 973.09 813.49 338.52 529.47 180.08 1,051.12 367.79 1,158.41 1,954.71 1,875.06 2,601.56 5,200.95 7,586.57 16,691.77 9,721.17 2,598.46 1,596.98 1,797.30
WA 37.41 33.48 231.25 40.69 161.45 142.81 55.43 381.89 137.00 282.50 193.64 326.00 393.97 1,406.64 1,802.52 3,687.77 2,232.20 185.50 75.63 893.91
VA 299.07 155.86 310.63 357.37 61.50 129.50 150.00 300.30 419.25 388.28 260.20 424.93 1,165.98 1,067.56 2,842.58 1,813.40 3,464.30 46.73 165.00 1,756.45
TN 253.67 61.34 119.67 0.35 125.00 243.46 75.00 110.00 176.58 401.30 213.13 605.75 117.61 1,001.84 569.79 1,040.86 651.68 392.11 560.62 196.70
CO 4.20 7.47 24.18 0.00 49.25 13.61 50.00 0.00 224.90 479.20 66.50 439.00 145.00 768.15 839.70 1,989.92 340.45 380.50 105.00 161.52
TX 89.43 47.02 324.62 157.79 26.20 57.20 94.40 247.17 277.82 182.81 229.68 295.21 575.13 466.35 1,298.59 964.19 1,103.18 477.86 701.08 432.30
PA 31.50 70.55 32.23 69.90 79.71 0.40 0.00 0.00 114.22 0.00 19.35 216.40 252.88 432.62 1,942.08 2,414.30 512.63 117.96 93.92 83.89
OH 25.00 126.13 37.40 59.51 0.00 0.00 5.00 48.00 39.90 36.87 128.50 239.32 179.99 408.79 640.30 1,174.61 888.01 83.03 1.20 955.27
MI 38.74 0.00 0.00 4.80 0.00 0.00 0.00 0.00 0.00 0.00 130.00 820.00 667.60 391.50 359.60 778.29 622.18 314.80 0.00 324.48
MN 20.00 23.45 72.50 0.00 34.07 0.00 0.00 40.00 0.00 115.90 83.77 149.00 109.07 266.36 254.81 261.55 36.93 22.40 93.25 0.00
IL 0.00 3.50 10.00 12.80 15.00 2.00 0.00 17.00 5.00 0.00 7.00 20.00 165.40 255.99 884.03 2,211.92 119.15 37.48 196.27 71.95
NC 9.70 0.00 36.00 10.70 29.30 0.00 35.00 0.00 133.28 105.00 106.00 0.00 77.70 250.00 325.88 954.75 25.75 7.95 56.00 1.00
UT 13.60 109.75 51.20 417.50 20.00 161.80 16.20 946.30 65.85 164.05 46.80 35.50 207.97 216.70 106.57 1,826.52 16.50 275.50 26.00 49.80
GA 0.00 0.00 15.10 65.00 0.00 14.00 0.00 0.00 56.00 0.00 74.19 34.30 40.85 181.00 30.00 917.90 19.00 0.00 0.00 55.00
MO 54.05 73.06 54.65 12.10 117.98 44.52 166.60 30.10 109.70 181.65 113.60 264.00 783.90 177.00 1,240.76 2,751.47 536.61 85.66 387.97 450.73
WI 6.50 7.00 31.48 22.80 38.12 0.60 0.00 0.00 0.00 63.45 10.10 183.50 349.00 173.68 180.41 613.41 119.64 74.90 275.86 17.31
ND 2.56 0.00 86.98 75.00 0.00 30.38 0.00 67.00 4.43 85.97 10.00 0.00 364.95 58.00 658.58 662.03 329.95 101.70 4.88 209.72
DC 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.60 14.20 169.00 18.26 23.95 87.95 51.00 373.35 69.50 26.50 52.00 0.00 72.98
LA 0.00 10.50 0.80 0.00 0.00 0.00 0.00 0.00 0.00 27.00 0.00 0.00 17.00 50.00 61.50 126.00 231.65 0.00 34.30 40.30
KS 0.00 31.82 0.00 0.00 10.30 0.00 0.00 0.00 0.00 0.00 0.00 24.29 0.00 45.30 0.00 110.10 0.00 0.00 0.00 0.00
MS 150.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.00 30.00 0.00 137.00 16.35 11.00 49.00 18.70
OR 643.50 0.00 33.26 0.00 0.00 53.13 0.00 0.00 63.60 0.00 11.30 6.00 45.40 25.03 79.63 64.77 286.20 0.00 0.00 80.30
VT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 11.00 0.00 22.00 14.00 131.00 1.00 0.00 0.00 5.00
IN 0.00 10.00 0.00 27.30 16.30 4.70 0.00 49.00 0.00 20.00 0.00 116.11 0.00 12.80 20.00 103.30 0.00 10.00 35.56 17.00
FL 0.00 0.00 30.00 0.00 0.00 0.00 0.00 0.00 0.00 32.00 32.00 0.00 0.00 10.00 0.00 65.00 0.00 14.00 0.00 2.20
CT 10.73 0.00 60.05 0.00 0.00 0.00 0.00 56.00 0.00 0.00 5.00 0.00 10.50 1.78 5.00 21.00 26.00 0.00 0.00 10.00
NJ 5.00 0.00 6.70 32.50 0.00 0.00 0.00 0.00 3.00 13.50 0.00 26.00 11.30 0.30 320.80 241.00 8.00 0.00 64.84 63.33
MD 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
OK 16.60 0.00 0.00 24.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 25.00 0.00 0.00 0.00
AL 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.60 0.00 0.00 0.00 9.50 0.00 0.00 2.53 0.00 7.86
SD 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 0.00
RI 49.42 0.00 0.00 40.00 0.00 0.00 15.00 0.00 0.00 0.00 20.00 0.00 50.00 0.00 0.00 0.00 0.00 11.20 8.80 0.00
HI 0.00 0.00 22.04 947.60 0.00 0.00 0.00 2.00 0.00 58.80 0.00 21.65 0.00 0.00 126.89 0.00 76.45 15.60 2.95 0.00
MT 0.00 0.00 0.00 37.00 0.00 0.00 0.00 0.00 10.10 0.00 0.00 0.00 0.00 0.00 29.40 60.00 20.70 42.61 40.80 0.00
NH 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.50 4.00 12.75 2.00 0.00
ME 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19.65 25.00 0.00 0.00 0.00
AZ 0.00 0.00 0.00 0.00 12.50 4.50 0.00 0.00 0.00 0.00 14.00 0.00 0.00 0.00 0.00 0.00 0.00 15.00 0.00 0.00
WV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15.00 27.00 0.00 0.00 0.00
SC 0.00 0.00 0.00 0.00 0.00 10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 31.20 0.00 0.00 0.00
ID 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 50.00 25.00 0.00 0.00 25.00 0.00 0.00 10.00 0.00 0.00
PR 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
NV 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 111.01 36.00 0.00 0.00 0.00 40.60 0.00 0.00 0.00 0.00
NE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 25.00 31.00 64.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.00
DE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 62.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
UN 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 26.00 0.00 0.00 0.00 0.00
WY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 0.00
AR 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.00 0.00 31.00 30.15 0.00 16.60 82.00 14.00 0.00 0.00 10.68
NM 36.15 27.70 0.00 2.06 0.00 155.00 40.00 0.00 0.00 6.10 1.90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 17.76 20.35
KY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 14.00 7.40 15.00 0.00 42.00 0.00 0.00 0.00 135.00 8.00 2.14 0.00
Total 3 ,782 .66 3 ,587.47 4, 379.07 4 ,476 .68 4, 918.80 3 ,097.52 1 ,905.73 5 ,243 .80 4, 565 .3 0 7, 73 3.7 2 9,442.31 11,553 .5 8 17, 993.04 3 0,842.67 53, 63 8.36 101 ,740.87 3 8, 952 .18 15,928 .95 11, 465 .2 8 18,696.01
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Figure 2.03 (Continued)Venture Capital Fund Commitments 1985-2013 ($ Millions)
State 2005 2006 2007 2008 2009 2010 2011 2012 2013
MA 1,735.74 2,252.82 4,409.92 1,949.58 1,652.22 1,259.41 4,096.04 659.75 5,474.78
CA 13,319.31 13,635.99 12,533.51 13,972.15 8,635.34 6,337.42 9,678.38 14,708.16 5,315.87
NY 9,150.90 4,365.57 5,121.96 2,516.05 3,573.19 2,664.92 2,339.74 1,414.73 2,200.41
WA 629.84 379.48 263.77 1,037.91 26.79 82.72 209.64 51.34 561.77
VA 143.06 2,910.97 286.64 227.29 157.73 938.22 11.00 23.15 446.06
TN 204.27 1,812.38 235.17 52.79 503.67 112.40 100.27 64.78 310.39
CO 432.75 472.23 782.73 368.88 484.14 67.60 543.52 28.93 275.10
TX 80.46 421.96 544.90 258.01 215.60 237.65 215.05 131.67 274.35
PA 68.76 132.45 358.26 220.75 3.50 262.09 6.13 280.36 259.59
OH 280.57 562.85 1,376.20 492.38 5.28 0.00 0.00 398.81 240.19
MI 392.62 896.30 314.60 1,122.94 204.06 0.00 475.00 0.40 236.24
MN 83.75 61.83 99.50 133.96 88.79 56.95 160.93 277.79 222.01
IL 418.62 555.42 582.42 105.28 14.42 121.37 35.63 44.70 187.62
NC 313.00 11.20 109.26 25.20 32.25 74.55 1.57 268.00 154.98
UT 295.00 473.24 275.00 325.10 21.80 0.00 0.00 150.00 136.85
GA 103.50 361.70 203.00 18.73 18.75 30.00 25.55 17.15 126.45
MO 688.16 794.40 825.81 962.73 233.18 205.17 126.81 281.89 101.38
WI 108.01 401.37 185.28 102.93 5.37 457.40 109.58 479.98 67.50
ND 558.16 152.22 81.45 83.38 1.88 30.27 82.40 29.44 45.27
DC 4.00 12.00 0.00 0.00 0.00 0.00 0.00 0.00 44.80
LA 23.98 169.59 213.15 576.50 34.26 16.45 160.42 159.33 40.00
KS 12.00 37.96 10.50 0.00 0.00 0.00 0.00 0.14 25.86
MS 69.65 19.10 0.00 117.93 101.35 1.53 58.10 19.90 14.23
OR 828.70 39.65 210.30 53.94 0.00 72.00 0.00 155.00 12.02
VT 0.00 3.28 0.00 14.48 0.00 16.00 0.00 0.00 10.00
IN 6.00 24.49 1.16 28.80 1.00 28.05 0.00 38.95 8.00
FL 0.00 0.00 2.03 5.00 5.90 12.25 2.03 6.98 2.00
CT 0.00 42.91 0.00 0.00 15.35 0.00 0.00 0.00 0.00
NJ 122.44 23.00 49.00 255.56 84.00 176.51 193.98 20.11 0.00
MD 0.00 0.25 10.04 19.97 0.00 0.00 7.85 0.00 0.00
OK 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AL 0.00 0.00 0.00 6.39 0.00 0.00 0.00 0.00 0.00
SD 0.00 1.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00
IA 0.00 1.35 0.00 0.00 0.00 0.00 0.00 0.00 0.00
RI 0.00 5.00 6.66 0.00 0.00 0.00 0.00 4.50 0.00
HI 0.00 45.55 19.45 0.00 0.00 0.00 5.50 4.64 0.00
MT 19.00 0.00 0.00 20.00 0.00 0.00 222.18 57.16 0.00
NH 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
ME 0.00 0.00 11.00 3.00 0.00 0.00 0.00 0.00 0.00
AZ 5.60 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WV 0.00 0.00 75.75 0.00 0.00 0.00 0.00 0.00 0.00
SC 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00
ID 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PR 0.00 0.00 0.00 13.20 0.00 0.48 0.00 0.18 0.00
NV 0.00 0.00 0.00 0.00 0.00 2.00 0.00 1.00 0.00
NE 0.00 0.00 0.00 0.00 0.00 100.00 100.00 0.00 0.00
DE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
UN 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
WY 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AR 0.00 80.68 102.33 15.09 9.20 27.32 0.15 40.00 0.00
NM 25.65 5.20 1.27 0.00 0.00 35.00 1.14 0.00 0.00
KY 7.95 65.00 98.00 12.00 0.00 0.00 0.00 7.00 0.00
To ta l 3 0,131 .45 3 1, 23 1. 10 29, 400.99 25 ,1 17.84 16, 12 8.99 13,425 .7 2 18, 968.57 19, 825 .9 1 16,7 93.70
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Figure 2.04Top 5 States
By Venture Capital Committed 2013
State No ofFunds
Committed($Mil)
Massachusetts 24 5,474.8
California 58 5,315.9
New York 25 2,200.5
Washington 5 561.8
Virginia 5 446.1
Subtotal 117 13,999.1
Remaining States 70 2,766.8
Total 187 16,765.9
-
20
40
60
80
100
120
140
160
180
200
220
240
260
280
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
($Bi
llions)
Year
Venture Capital Buyouts and Mezzanine
Figure 2.5Private Equity Annual Commitment ($ Billions)
1985 to 2013
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Measuring industry activity by the total dollars invested in a given year shows that the industry has remained generally in the $20 billion to $30 billion
range since 2002. In 2013, $29.5 billion was invested in 3,382 companies through 4,041 deals. The number of deals is 4% higher than 2012 counts
but is essentially the same as 2011. The number of rst-time fundings increased in 2013 to 1,334 companies from the previous 1,275, but it remains
near the top of the healthy range of 1,000 to 1,400 rst-time fundings in a year. Further parsing the data shows 50% of the investment dollars going toCalifornia companies, down from 53% in 2012 but consistent with the previous three years. The year 2013 saw a record 56% of the nancing rounds
going to seed and early stage companies, compared with a more typical one-third of deals. A carefully watched statistic is the investment in the life sci
ences. It is possible that the downward plummet in rst-time life sciences investment is starting to reverse, led by Biotechnology, but it is still too early
to be sure. Corporate Venture investment continues to gain considerable strength and presence in the overall industry.
INVESTMENTS
SectorsSoftware was the leading sector in 2013, receiving 37.3% of the total
dollars. The second largest sector was Biotechnology, which was less than
half that amount at 15.4% of total investment. Media and Entertainment,
where much of the social networking is categorized, received 9.9% and
Medical Devices and Equipment received 7.2%.
The life sciences share of the venture capital investment dollars de-
creased in 2013 to its lowest level since 2001 at 23.6% of the total dollars.
(For purposes of this paragraph, life sciences is made up of all three life
science categories. Some industry observers choose to exclude the health-
care services sector from the life sciences totals.) This is down from the
recent peak of 32.7% in 2009. (The all-time peak was 36.3% in 1992.)
This recent downward life sciences trend is very visible when just
looking at rst fundings. In 2013, only 155 life sciences (dened in this
paragraph as Biotech/pharma and Medical Devices/therapeutics, but not
healthcare services) received rst fundings, up just slightly form 148 in
2012. While the uptick driven by Biotechnology rst fundings may be an
early indicator of a rebound, these last two years are the lowest counts
since 1996. The possible recovery in Biotechnology investing may have
been driven in part by the success of recent efforts at FDA reform and the
strong number of Biotechnology company IPOs in 2013 (count = 42).
Among rst fundings, Software led the way with 591 companies get-
ting their initial venture capital rounds. This is more than 46% of the rst
fundings. Again in 2013, the second most active rst-funding sector is
Media and Entertainment at 170 rst fundings.
Stages and First-Time FundingsInvestment activity in the industry seems to be bifurcated by the large
number of later stage companies hoping to join fairly strong public mar-
kets at year end 2013 and the very large number of new companies being
funded by the industry. While many of the larger portfolio companies,
IPOs, and big acquisitions have gotten the headlines and visibility, 2013
actually saw the highest percentage of seed- and early-stage deals ever at55.7% of all deals. This surpasses the prior record of 52.6% in 2012. This
certainly would challenge the suggestion that the industrys attention is
single-focused on later-stage companies. Despite the urry of IPO activity
in 2013 and acquisitions announced for early 2014, there remains a record
number of companies in portfolios in the later stage of development that
in most other positions in the business cycle would have already gone
public or otherwise been acquired.
With the rule of thumb that a healthy venture capital industry invests in
1,000-1,300 new companies each year, the 1,334 rst fundings in 2013 is
very much in that range. Not surprisingly, 83% of those rst round invest-
ments were made at the seed and early stage.
Geographical Spread Across the United StatesThe year 2013 provided an interesting contrast in geographic disper-
sion. The slight majority of investment dollars went to California compa
nies at 50.01%. This is down from the record 53.2% in 2012. Interestingly
companies in 48 states and DC received nancing, which ties the 2012
record high. Ranked by total dollars invested, the top ve states (Califor
nia, Massachusetts, New York, Washington and Texas) received 78% o
all the dollars invested nationally.
This compares to 2011, when California companies received a then-
record 51.2% of the dollars. That year, companies in a record 47 states and
DC received venture capital funding. Together, the top ve states (Cali
fornia, Massachusetts, New York, Texas, and Washington State) received
77% of the total dollars.
California-domiciled venture capital rms made investments in 38
states in 2013. Approximately 48% of all the money invested in Califor
nia came from California-domiciled rms. Conversely, California-based
rms concentrated 68% of their investment dollars within the state.
Corporate Venture Group InvolvementThe number and reach of corporate venture capital groups increased
in 2013, along with the visibility of this group. These groups provided
an estimated 10.5% of the venture capital invested by all venture groups
They were involved in 16.9% of the deals the highest level in ve years
Going forward, all signs suggest that these groups are becoming more
involved alongside traditional venture rms in deals, as well as initiating
corporate venture group syndicates to do deals in lieu of, or in advance of
investment rounds by traditional venture rms.
MethodologyAs calculated by Thomson Reuters, venture capital investment data are
derived from several sources. Primarily, survey information is obtainedfrom the quarterly survey that drives the MoneyTree Report from Price
waterhouseCoopers and the National Venture Capital Association based
on data from Thomson Reuters. This is the ofcial industry database of
venture capital investment. Secondly, Thomson Reuters obtains data from
SEC lings that are regularly monitored by our research staff. Finally
publicly available sources such as press releases and trade publications
are used.
For detailed information on which transactions qualify as MoneyTree
deals and are therefore counted in this chapter, please refer to Appendix B
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0
20
40
60
80
100
120
1
985
1
986
1
987
1
988
1
989
1
990
1
991
1
992
1
993
1994
1
995
1
996
1
997
1
998
1
999
2
000
2
001
2
002
2
003
2004
2
005
2
006
2
007
2
008
2
009
2
010
2
011
2
012
2
013
($
Billions)
Year
Figure 3.01Venture Capital Investments ($ Billions)
1985 to 2013
Figure 3.03Venture Capital Investments
Top 5 States in 2013
State # Companies # Deals Invested($Bil)
California 1,362 1,616 14.8
Massachusetts 307 364 3.1
New York 344 403 2.9
Texas 134 154 1.3
Washington 107 126 0.9
Total* 2,254 2,663 23.0
*Total includes top 5 states only
Figure 3.02Venture Capital Investments in 2013 By Industry Group
Industry Group # Companies # Deals InvestmentAmt ($Bil)
# Companies # Deals InvestmentAmt ($Bil)
Information Technology 2,360 2,784 20 1,009 1,009 3.5
Medical/Health/Life Science 649 816 6.9 167 167 1.2
Non-High Technology 373 441 2.7 158 158 0.4
Total 3,382 4,041 29.6 1,334 1,334 5.1
Initial InvestmentsAll Investments
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AK
AR
NE
WY
PR
VI
GU
5
AL
113
AZ
CA
429
CO
182
CT
286
DC 71
DE
421
FL
412
GA
2
HI
23
IA
7
ID
IL
25
IN33
KS
11
KY
15
LA
3,079
MA
664
MD
27
ME
108
MI
270
MN
77
MO
1
MS
MT
260
NC
24
ND
74
NH
322
NJ
26
NM
7
NV
2,870
NY
319
OH
8
OK
138
OR
447
PA
82
RI
86
SC
12
SD
109
TN
1,316
TX
315
UT594
VA
21
VT
913
WA
36
WI
1
WV
14,770
10
86
435
0
Figure 3.06Amount of Capital Invested By State in 2013 ($ Millions)
USA
AK
AR
NE
WY
PR
VI
GU
4
AL
19
AZ
CA
62
CO
43
CT
27
DC 5
DE
37
FL
35
GA
2
HI
2
IA
2
ID
74
IL
11
IN6
KS
6
KY
6
LA
307
MA
63
MD
4
ME
58
MI
32
MN
32
MO
2
MS
1
MT
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