Shaking the MoneyTree

PricewaterhouseCoopers/ National Venture PricewaterhouseCoopers/ National Venture Capital Association Capital Association MoneyTreeMoneyTree™™ ReportReportbased on data from Thomson Reutersbased on data from Thomson Reuters

Shaking the MoneyTree™™

Q3 UpdateOctober 2009

Q3 2009Slide 2PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters

PricewaterhouseCoopers / National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters

David Silverman

National Co-Leader - Emerging Company Practice,

PricewaterhouseCoopers LLP


About The Report

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

• ‘Core’ measure of equity investments in venture-backed companies in the United States

• Companies have received at least one round of financing involving a professional VC firm or equivalent

• Captures: tranches, not term sheets, foreign VCs, qualified private placement

• Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc.• MoneyTree™ Report in its 15th year• Results online at www.pwcmoneytree.com, www.nvca.org,

www.venturexpert.com


MoneyTree Total Investments: Q1 2001 – Q3 2009

# of

Deals

2001 2002 2003 2004 2005 2006 2007 2008 2009

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

1,283 1,215 1,004 984 843 855 694 722 705 743 721 791 720 855 696 846 736 834 798 825 882 976 921 964 874 1,061 1,011 1,076 1,015 1,067 994 904 616 657 637


MoneyTree Total Investments: 1980 – YTD 2009

Annual Venture Capital Investments 1980 to YTD 2009


Investments by Region: Q3 2009

Region# of

Deals

% Change $ from Q2’09

Silicon Valley 210 62.82%

New England 86 14.74%

NY Metro 50 -10.97%

Northwest 30 82.79%

LA/Orange County 33 33.19%

San Diego 32 -6.17%Southeast 33 -36.94%Texas 23 170.13%DC/Metroplex 21 25.14%Midwest 40 -22.94%North Central 13 -3.29%Philadelphia Metro 25 -42.05%Colorado 13 -76.47%SouthWest 14 -69.46%Upstate NY 1 207.69%South Central 11 -20.23%Sacramento/N.Cal 2 -80.23%Grand Total 637 16.78%

Q3 2009 Total: $4,808.8 million in 637 deals


Investments by Region –Quarterly Percent of Total U.S. Investments

Top U.S. Regions Q3 ‘08– Q3 ‘09


Investments by Industry: Q3 2009

Industry# of

Deals% Change $from Q2 ’09

Biotechnology 104 -4.42%

Industrial/Energy 52 89.34%

Software 128 -8.52%

Medical Devices and Equipment 71 -5.89%

Media and Entertainment 60 269.40%

IT Services 48 -10.87%

Networking and Equipment 25 17.65%

Semiconductors 21 -14.20%

Electronics/Instrumentation 18 55.42%

Consumer Products and Services 23 149.36%

Telecommunications 32 -17.42%

Financial Services 8 485.55%

Computers and Peripherals 13 -39.55%

Retailing/Distribution 5 101.13%

Business Products and Services 20 -17.10%

Healthcare Services 7 -56.54%

Other 2 -62.54%

TOTAL 637 16.78


Visit www.pwcmoneytree.com for Industry definitions

Q3 2009Slide 9PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report

based on data from Thomson Reuters

Investments by Industry: Q3 2009 – NY Metro($ in millions)

$46.290

$0.940

$18.568

$18.000

$0.060

$27.575

$6.040

$69.135

$8.600

$44.901

$2.800

$6.043

$0 $20 $40 $60 $80 $100

Consumer Products and Services

Healthcare Services

Business Products and Services

Electronics/Instrumentation

Telecommunications

Media and Entertainment

Networking and Equipment

Industrial/Energy

IT Services

Business Products and Services

Software

Biotechnology

Q3 2009 Total: $251.26 million in 50 dealsVisit www.pwcmoneytree.com for Industry definitions


Investments by Industry –Quarterly Percent of Total U.S. Investments

Top 5 Industries – Q3 ‘08 to Q3 ‘09



(% of Total Dollars)

22.7

0%

5.20

%

21.6

0%

4.65

%

9.37

%

17.0

0%

9.60

%

10.9

0%

7.17

%

13.0

3%

18.5

0%

5.14

%

20.3

0%

7.42

%

12.3

9%

13.7

0%

0%

32.4

0%

11.6

6%

10.3

0%

7.39

%

8.20

%

20%

19.3

5%

7.30

%

3.40

%

0%

27.5

0%

0%

7%

0%

5%

10%

15%

20%

25%

30%

35%

Biotechnology Industrial/Energy Software Medical Devices &Equipment

Media & Entertainment

2006 2007 2008 Q1 2009 Q2 2009 Q3 2009

Investments by Industry –Quarterly Percent of Total NY Metro Investments

Top 5 Industries – 2006 to Q3 ‘09


Investments by Stage of Development: Q3 2009

Stage of Development# of

Deals

% Change in $ Amount

from Q2 2009

Later Stage 168 35.14%

Expansion Stage 185 27.13%

Early Stage 198 -0.87%

Startup/Seed 86 -10.88%

Total 637 16.78%




Investments by Stage of Development: Q3 2009 – NY Metro($ in millions)

$11.7

$56.2

$49.5

$133.9

$0 $50 $100 $150

Startup/Seed

Early Stage

Expansion

Later Stage

Stage of Development# of

Deals

Later Stage 11

Expansion Stage 15

Early Stage 19

Startup/Seed 5

Total 50

Q3 2009 Total: $251.26 million in 50 deals


First Sequence Financing –Number of Deals

First Sequence Deals


First Sequence Financing –Investment Amount

First Sequence Investments


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


Stage of Development –Quarterly Percent of Total First Sequence Dollars

Stage Development – Q3 2008 to Q3 2009


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


Post-Money Valuations – Early Stage Companies Q2 2002 to Q2 2009

12 Month Average

Source: Thomson Reuters


Post-Money Valuations – Expansion Stage Companies Q2 2002 to Q2 2009

12 Month Average



Post-Money Valuations – Later Stage Companies Q2 2002 to Q2 2009

12 Month Average



Q3 2009 – Most Active Venture InvestorsVenture Capital Firm Location Total DealsNew Enterprise Associates Baltimore, Maryland 20Polaris Venture Partners Waltham, Massachusetts 17U.S. Venture Partners Menlo Park, California 16Draper Fisher Jurvetson Menlo Park, California 14Kleiner Perkins Caufield & Byers Menlo Park, California 14Sequoia Capital Menlo Park, California 13ARCH Venture Partners Chicago, Illinois 11Venrock Associates Palo Alto, California 11Menlo Ventures Menlo Park, California 10Sigma Partners Menlo Park, California 10Domain Associates LLC Princeton, New Jersey 9Flagship Ventures Cambridge, Massachusetts 9Highland Capital Partners LLC Lexington, Massachusetts 9Rho Ventures New York, New York 9Benchmark Capital Menlo Park, California 8CMEA Capital San Francisco, California 8DCM Menlo Park, California 8InterWest Partners Menlo Park, California 8Kansas Technology Enterprise Corporation Topeka, Kansas 8North Bridge Venture Partners San Mateo, California 8


Q3 2009 – Top 10 Deals in NY Metro

Company Location Industry Stage $ Invested

Gilt Groupe, Inc. New York, NY Consumer Products and Services Expansion $43.0

**Confidential** Short Hills, NJ Telecommunications Expansion $20.0

Tremor Media, Inc. (FKA: Tremor Network, Inc.) New York, NY Telecommunications Expansion $20.0

Tervela, Inc. New York, NY Networking and Equipment Expansion $18.0

TxVia, Inc. (FKA: TxCore, Inc.) New York, NY Software Expansion $15.5

Cadent, Inc. Carlstandt, NJ Software Later $15.0

TradeCard,Inc. (FKA: Full Service Trade System, Inc.) New York, NY Software Later $13.0

MediaMath, Inc. New York, NY IT Services Early $10.0

TRAFFIQ, Inc. New York, NY IT Services Early $9.99

5min, Ltd. New York, NY Media & Entertainment Early $7.5


Analysis of Venture-Backed IPO and M&A Activity

Quarter/Year Number of IPOs* Total Venture-Backed Offer Amount ($M)

Average Venture-Backed IPO Offer amount ($M)

Number of Venture-backed M&A deals

Average Venture-Backed M&A deal size**

2004 94 11,378.0 121.0 346 85.32005 57 4,485.0 78.7 351 187.02006 57 5,117.1 89.8 369 105.02007 86 10,326.3 120.1 372 170.92008 Q1 5 282.7 56.6 108 127.22008 Q2 0 0.0 0.0 84 126.72008 Q3 1 187.5 187.5 88 96.32008 Q4 0 0.0 0.0 62 140.4

2008 6 470.2 78.4 342 120.5

2009 Q1 0 0.0 0.0 63 47.0

2009 Q2 5 720.7 144.1 64 197.7

2009 Q3 3 572.1 190.7 62 57.5

Source: Thomson Reuters and National Venture Capital Association

* Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile**Only accounts for deals with disclosed values


Venture Capital FundraisingYear First Time Funds Follow-On Funds Total Number of Funds VC Raised ($M)

2004 64 154 218 19,154.4

2005 68 174 242 28,962.7

2006 57 185 242 31,925.0

2007 62 189 251 36,064.9

2008 51 173 224 28,604.6

Quarter

Q3 ’07 15 62 77 8,595.8

Q4 ’07 27 59 86 12,322.5

Q1 ’08 12 62 74 7,228.4

Q2 ’08 23 59 82 9,284.5

Q3 ’08 14 49 63 8,497.0

Q4 ’08 12 37 49 3,594.7

Q1 ’09 3 47 50 4,810.9

Q2 ’09 8 19 27 1,965.5

Q3 ’09 4 13 17 1,557.8Source: Thomson Reuters & National Venture Capital AssociationData current as of October 12, 2009

Closing Thoughts & Comments

David SilvermanPartnerPhone: 646-471-5421Email: [email protected]

© 2009 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PwC

Shaking the MoneyTree

Economy & Finance

Transcript of Shaking the MoneyTree