Transcript None - Southeast VC

Shaking the MoneyTree™
Q3 2006 Update
Raleigh, NC
November 2006
PricewaterhouseCoopers/
National Venture Capital Association
PricewaterhouseCoopers/National
Venture Capital Association MoneyTree™ Report
MoneyTree™
Report
based on data from Thomson Financial
based on data from Thomson Financial
November 2006
pwcSlide 1
Today’s program
The MoneyTree Report – Q3 2006 Analysis
•
presented by Laura Hoke, PricewaterhouseCoopers LLP
Venture Capital Panel
•
•
David Kirkpatrick, SJF Ventures
Janet Yang, Novak Biddle Venture Partners
Question and Answer Session
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 2
Speaker Bios
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 3
Laura Hoke
Laura is a senior manager in the Raleigh office of PricewaterhouseCoopers ("PwC"), where she
is responsible for providing a range of audit, business advisory and consulting services. She
has extensive experience in the software industry, as well as other technology-backed
industries including biotech, pharmaceutical and professional services. In addition to her audit
and business advisory services, Laura has significant SEC experience, including several initial
public offerings. She has been involved in numerous Sarbanes Oxley projects and has led the
404 implementation efforts at several organizations. Laura rejoined PwC’s Raleigh office after
serving as the Corporate Controller for a global software company, where she was responsible
for the domestic and international accounting functions, as well as the development,
implementation and maintenance of the internal control structure. Laura has extensive
experience in mergers and acquisitions and was responsible for the integration of acquisitions
for a global distribution and manufacturing company.
Laura’s primary client is Lenovo Group, Limited although she participates on several other
technology-backed engagements throughout the Carolinas. Laura graduated with a B.S. from
Virginia Tech, is a member of the AICPA and the North Carolina Association of Certified Public
Accountants. She also serves on the Board of Directors of Artspace, a nonprofit visual arts
center in downtown Raleigh.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 4
David Kirkpatrick
David Kirkpatrick is Managing Director and co-founder of SJF Ventures, socially
responsible venture capital fund with $40 million under management with offices in
Durham, NC and New York, NY. SJF focuses on rapidly expanding cleantech, business
services and consumer products firms, has 16 portfolio companies, and is investing from
its second fund. SJF assists and invests in enterprises across the Eastern U.S. with
unique cleantech or workforce innovations which create strong competitive advantages.
The SJF portfolio includes groSolar, Salvage Direct, EdMap, Home Bistro, Ryla
Teleservices, Evco Research, Preclick, and B.B. Hobbs.
David was named the national 2005 CDVC Practitioner of the Year by the Community
Development Venture Capital Alliance. Previous to SJF, he founded and managed two
other successful enterprises – KirkWorks, an environmental investment research firm, and
SunShares, a solar energy and recycling company. David was named Recycler of the
Year in 1996, the National Recycling Coalition’s award for leadership in the recycling
industry.
David earned a BA in Physics and History from Duke University in 1982 and an MBA from
UNC Business School in 1991. He is a graduate of the Venture Capital Institute’s VCI
1999 and VCI-Grad 2000 programs. He serves on the Boards of groSolar, B.B. Hobbs,
and the Duke-Durham Neighborhood Partnership.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 5
Janet Yang
Janet Yang joined Novak Biddle Venture Partners in 2006. Trained in electrical engineering
from Stanford University, Janet started her investment career on Wall Street as a sell-side
equity research analyst for Merrill Lynch and later Salomon Smith Barney, where she was a
top-ranked analyst in her sector according to fund managers’ surveys, and helped raised over
$800 million for various corporations.
Prior to Novak Biddle, Janet worked closely with William H. Draper, III in San Francisco-based
venture capital firm, Draper Richards, focusing on early-stage technology investments in the
United States and India.
Janet brings substantial international experience, as well as operating experience, to Novak
Biddle. She has over 10 years of work experience in Asia, in particular, the Greater China
region. While in Asia, Janet held various senior executive positions at PCCW, the largest
telecommunications company in Hong Kong, reporting to Chairman and CEO Richard Li. Her
experience included being the CFO of an IT outsourcing company in partnership with China
Telecom and PCCW.
Janet is multi-lingual, fluent in Chinese and had studied Japanese and French. She has lived
and worked in New York, San Francisco, Washington DC, London, Tokyo, Hong Kong,
Shanghai, and Beijing.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 6
About The Report
• PricewaterhouseCoopers and the National Venture Capital Association
produce the MoneyTree Report™ based on data from Thomson Financial
• Companies have received at least one round of financing involving a
professional VC firm or equivalent
• Captures: tranches, not term sheets, foreign VCs, qualified private placement
• Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc.
• MoneyTree™ Report in its 12th year
• Results online at www.pwcmoneytree.com, www.nvca.org,
www.ventureeconomics.com
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 7
The National Picture
Historical Trends
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 8
MoneyTree Total Investments: Q1 1998 – Q3 2006
($ in billions)
$27.9
$28.0
$26.3
$32.0
$22.1
$23.1
$24.0
$4.3
$5.0
$4.8
$5.6
$5.2
$6.3
$4.8
$5.8
$5.1
$6.4
$5.6
$5.7
2002
2003
2004
2005
$6.2
$6.8
$6.2
$6.7
$6.0
$4.5
$4.5
$6.6
$4.0
$5.6
$5.2
$5.9
$8.0
$12.8
$11.3
$8.3
$8.1
$10.7
$13.0
$16.0
$0.0
1998
2001
2000
1999
1998
1999
2000
2001
2002
2003
2004
YTD Q3
2006
2005
2006
#
of
Q1
Q2
Q3
Q4
Q1
Q2
828
880
889
958 895 1275
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
1392 1834 2083 2083 1911 1735 1276 1212 997 979 823 844 686 720 687 730 703 767 695
838
678
813
716
811
771
794
829
907
797
Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 9
MoneyTree Total Investments: 1980 – YTD Q3 2006
Annual Venture Capital Investments
1980 to YTD Q3 2006
$104.4
($ in billions)
$120
$100
$19.2
$22.7
$22.1
2
Q 005
3
20
06
$19.6
04
YT
D
20
03
20
02
20
01
20
20
00
$20.7
19
99
$14.6
19
98
$10.8
19
97
$7.9
19
96
$4.1
19
95
$3.7
19
94
$3.5
93
19
92
19
19
91
$2.2
$2.8
$3.3
19
90
$3.3
19
89
$3.3
19
88
$3.1
19
87
$2.8
86
19
85
19
19
84
$1.6
19
83
$1.2
19
82
$0.6
81
19
19
80
$0
$3.0
$20
$3.0
$40
$21.8
$60
$40.5
$53.5
$80
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 10
MoneyTree Total Investments: 1995 – YTD Q3 2006
($ in billions)
$104.4
$120
$100
$53.5
$80
$40.5
$60
$19.6
$22.1
$22.7
2002
2003
2004
2005
$19.2
$21.8
$20.7
$14.6
$10.8
$20
$7.9
$40
$0
1995
1996
1997
1998
1999
2000
2001
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
YTD Q3
2006
November 2006
Slide 11
Investments by Region: Q3 2006
Sacramento/N. CA
$19.9
2 Deals
Upstate NY
$30.6
6 Deals
Northwest
$190.0
33 Deals
Midwest
$ 199.0
36 Deals
Colorado
$209.0
23 Deals
LA/Orange County
$542.8
56 Deals
Southwest
$215.9
16 Deals
San Diego
$ 292.5
27 Deals
South Central
$9.6
5 Deals
Texas
$533.8
49 Deals
K AU A I
AK/HI/PR
$1.4
2 Deals
NY Metro
$389.5
56 Deals
North Central
$139.1
17 Deals
Silicon Valley
$1,988.6
250 Deals
New England
$578.1
87 Deals
Philadelphia Metro
$213.2
22 Deals
DC/Metroplex
$332.1
54 Deals
Southeast
$357.8
56 Deals
N I I U
HA
OA HU
M
O
L O
KA I
M UA I
L AN AI
K AH O
O
W
LE A
H AW A I I
Q3 2006 Total Investments - $6,242.9M in 797 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 12
Investments by Region: Q3 2006
($ in millions )
$1,988.6
Silicon Valley
$578.1
New England
LA/Orange County
$542.8
Texas
$533.8
Region
$389.5
NY Metro
$357.8
Southeast
$332.1
DC/Metroplex
$292.5
San Diego
# of
% Change $
Deals
from Q2 ‘06
Silicon Valley
250
-16.9%
New England
87
-22.1%
LA/Orange County
56
5.3%
Texas
49
53.9%
NY Metro
56
-29.5%
Southeast
56
21.5%
DC/Metroplex
54
-27.3%
SouthWest
$215.9
San Diego
27
38.9%
Philadelphia Metro
$213.2
South West
16
147.9%
Colorado
$209.0
Philadelphia Metro
22
-22.3%
Colorado
23
135.1%
Midwest
36
-32.3%
Northwest
33
-49.5%
North Central
17
101.5%
Upstate NY
6
41.4%
Sacramento/N.Cal
2
177.3%
Midwest
$199.0
Northwest
$190.0
$139.1
North Central
$30.6
Upstate NY
$19.9
Sacramento/N.Cal
South Central
5
-75.5%
South Central
$9.6
AK/HI/PR
2
-21.1%
AK/HI/PR
$1.4
Q3 2006 Total
797
-7.8%
Undisclosed/Other
$0.0
$0
$700
$1,400
NM = Not Meaningful
$2,100
Q3 2006 Total:$6,242.9M in 797 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 13
Investments by Region –
Quarterly Percent of Total U.S. Investments
Top U.S. Regions – Q3’06
31.9%
35.3%
37.4%
34.9%
40%
39.0%
(% of Total Dollars)
6.2%
8.2%
6.3%
7.1%
5.6%
8.6%
5.1%
5.1%
5.5%
3.6%
8.7%
7.6%
6.1%
5.5%
6.4%
11.0%
9.3%
10%
15.1%
11.5%
20%
13.2%
30%
0%
Silicon Valley
New England
Q3 '05
Q4 '05
LA/Orange County
Q1 '06
Q2 '06
Texas
NY Metro
Q3 '06
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 14
Q3 2006 Top 10 States Garnering Venture Funds
State
1.
California
2.
Deals
Investment Amount
335
$
2,843,840,200
Texas
49
$
553,806,300
3.
Massachusetts
73
$
513,265,500
4.
New Jersey
16
$
226,074,200
5.
New York
44
$
212,953,400
6.
Colorado
23
$
209,038,600
7.
Pennsylvania
27
$
207,300,100
8.
Virginia
22
$
163,265,300
9.
Washington
23
$
146,558,400
6
$
142,363,200
15
$
116,040,900
10.
Arizona
12.
North Carolina
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 15
Investments by Industry: Q3 2006
($ in millions)
$1,142.1
Biotechnology
$1,094.9
Software
$848.3
Telecommunications
Industry
$639.3
Medical Devices and Equipment
$575.7
Industrial/Energy
$460.0
Semiconductors
$402.0
Media and Entertainment
$254.0
Networking and Equipment
$174.0
IT Services
$125.6
Computers and Peripherals
# of
% Change $
Deals
from Q2 ‘06
Biotechnology
95
-5.5%
Software
186
-19.2%
Telecommunications
72
32.3%
Medical Devices & Equipment
82
12.4%
Industrial/Energy
45
8.8%
Semiconductors
51
-21.1%
Media & Entertainment
75
13.9%
Networking & Equipment
30
-32.6%
IT Services
35
-34.9%
Electronics/Instrumentation
$114.9
Computers & Peripherals
20
60.2%
Financial Services
$108.6
Electronics/Instrumentation
18
-59.1%
Financial Services
22
53.1%
$96.4
Business Products and Services
26
-59.8%
$88.7
Retailing/Distribution
11
163.8%
Healthcare Services
12
-2.2%
Consumer Products and Services
15
-64.7%
Undisclosed/Other
2
Business Products and Services
Retailing/Distribution
$78.2
Healthcare Services
$35.6
Consumer Products and Services
Undisclosed/Other
TOTAL
$4.5
$0
$900
NM = Not Meaningful
797
NM
-7.8%
$1,800
Q3 2006 Total: $6,242.9M in 797 Deals
Visit www.pwcmoneytree.com for Industry definitions
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 16
Investments by Industry –
Quarterly Percent of Total U.S. Investments
Top 5 Industries – Q3 ‘05 to Q3 ‘06
(% of Total Dollars)
9.2%
4.2%
5%
3.9%
3.1%
7.8%
10.2%
8.4%
11.3%
11.7%
10.5%
13.6%
9.5%
9.3%
10%
12.8%
12.9%
17.5%
20.0%
21.5%
19.5%
18.3%
17.8%
14.2%
15%
17.9%
20%
18.3%
25%
20.3%
30%
0%
Biotechnology
Softw are
Q3 '05
Telecommunications
Q4 '05
Q1 '06
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Medical Devices and
Equipment
Q2 '06
Industrial Energy
Q3 '06
November 2006
Slide 17
Life Science Investments –
Percent of Total U.S. Investments
Life Science Sectors – Q3 ’05 to Q3 ‘06
(% of Total Dollars)
10%
28.5%
26.2%
10.2%
8.4%
11.3%
11.7%
17.8%
18.3%
10.5%
15%
14.2%
20%
17.9%
25%
18.3%
30%
25.5%
28.8%
35%
29.6%
40%
5%
0%
Life Sciences
Medical Devices and Equipment
Biotechnology
Q3 '05
Q4 '05
Q1 '06
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Q2 '06
Q3 '06
November 2006
Slide 18
Investments by Stage of Development: Q3 2006
($ in millions)
Expansion
$2,853.7
Later Stage
$2,210.8
Stage of Development
Early Stage
% Change in
$ Amount
Deals from Q2 2006
# of
$849.2
Startup/Seed
$329.1
$0
$1,000
$2,000
Expansion Stage
300
-9.8%
Later Stage
219
-12.8%
Early Stage
188
9.1%
Startup/Seed
90
11.6%
Total
797
-7.8%
$3,000
Q3 2006 Totals: $6,242.9M in 797 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 19
Stage of Development –
Quarterly Percent of Total First Sequence Dollars
Stage Development – Q3 2005 to Q3 2006
(% of first sequence dollars)
16.0%
13.2%
14.0%
14.4%
13.1%
33.7%
37.0%
32.7%
34.7%
24.7%
19.2%
6.4%
10%
8.2%
20%
16.0%
30%
18.5%
40%
31.0%
50%
31.2%
44.5%
60%
37.2%
53.9%
70%
0%
Startup/Seed
Expansion
Early Stage
Q3 '05
Q4 '05
Q1 '06
Q2 '06
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Later Stage
Q3 '06
November 2006
Slide 20
Stage of Development –
Quarterly Percent of Total First Sequence Deals
Stage Development – Q3 2005 to Q3 2006
(% of first sequence deals)
7.5%
8.6%
5.3%
10%
5.5%
22.2%
24.6%
30.5%
29.4%
39.8%
43.9%
25.6%
22.9%
21.1%
4.5%
20%
17.6%
30%
19.5%
40%
30.5%
50%
43.1%
50.4%
60%
47.4%
70%
0%
Startup/Seed
Expansion
Early Stage
Q3 '05
Q4 '05
Q1 '06
Q2 '06
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Later Stage
Q3 '06
November 2006
Slide 21
Investments by Sequence of Financing: Q3 2006
($ in millions )
$1,678.9
5th and Beyond
First
$1,458.5
Financing
Third
$1,130.5
Second
# of
Deals
% Change in
$ Amount from
Q2 2006
Fifth & Beyond
176
-17.7%
First
266
-0.9%
Third
122
3.0%
Second
146
-18.9%
Fourth
87
4.7%
Total
797
- 7.8%
$1,003.1
Fourth
$971.8
$0
$300
$600
$900
$1,200
$1,500
$1,800
Q3 2006 Totals: $6,242.9M in 797 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 22
First Sequence Financing –
Investment Amount
First Sequence Investments
$1.4
$1.5
$1.2
$1.4
2002
2003
2004
2005
Q1
Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
$1.3
$1.5
$1.5
$1.0
$1.2
$1.2
$1.2
2001
$0.7
$1.0
$1.0
$1.1
2000
$1.3
$1.2
$1.0
$0.8
$2.9
$2.0
$1.3
$1.3
$6.3
$5.4
$10
$9
$8
$7
$6
$5
$4
$3
$2
$1
$0
$8.7
$8.4
($ in billions)
2006
Q4
November 2006
Slide 23
First Sequence Financing –
Number of Deals
665
800
794
1000
942
934
First Sequence Deals
226
240
246
272
2002
2003
2004
2005
246
301
266
187
243
217
246
200
168
185
178
209
400
223
240
183
186
385
325
265
237
600
0
2000
2001
Q1
Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2006
Q4
November 2006
Slide 24
First Sequence Financing –
Percent of Total U.S. Investments
45.2%44.8%
41.5%
38.3%
34.3%
32.0%
30.2%
31.2%
26.8% 26.6%
30.0%
28.4%
26.7% 25.8%
24.5% 25.3% 25.3%
27.2% 26.9%
29.0%
31.6%
31.9%
33.2%33.4%
29.7%
29.6%
% of Total Dollars
21.7%23.4%
Q3 2006
20.9%
Q2 2006
Q4 2005
Q3 2005
Q1 2005
Q4 2004
Q2 2005
23.3% 22.1% 24.4%
20.9%
Q3 2004
Q2 2004
Q1 2004
Q4 2003
Q3 2003
Q3 2002
Q2 2002
Q1 2002
Q4 2001
Q1 2003
17.8% 17.1%
20.4% 21.5% 20.3% 20.1% 19.8%
Q2 2003
22.2%
15.2% 15.9%
Q3 2001
Q2 2001
Q1 2001
Q4 2000
Q3 2000
19.8% 20.4%
Q4 2002
22.6%
Q1 2006
25.3%
17.6%
Q2 2000
27.1%
24.2%
30.3%
27.9%
23.9% 24.6%
Q1 2000
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
% of Total Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 25
First Sequence Deals in Startup & Early Stage Companies
40%
3000
31.7%
28.3%
25.7%
30%
2,478
29.2%
35%
31.7%
26.0%
2000
22.3%
20.2%
1,711
19.6%
21.9%
21.6%
25%
19.9%
20%
15%
900
546
677
574
674
10%
603
793
697
518
924
1000
5%
0%
YT
D
Q
3
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
19
95
0
Seq 1 Deals in Startup/Early Stage
% of Total US Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 26
Median Deal Size vs. Mean Deal Size –
Quarterly Total U.S. Investments
$13.8 $13.8
$14
$14.2
$13.0
$13.2
$12
$10.3
$9.6
$10
$8.7 $8.6 $8.6
$7.7
$8
$7.0 $7.0
$7.3
$6.7
$6.1
$6
$5.0 $5.0
$4.5
$6.8 $6.6 $6.5
$7.1 $7.2
$5.0 $5.0
$7.6 $7.8 $7.8 $7.4 $7.6 $7.4
$8.2
$7.7
$5.0 $5.0 $5.0 $5.0 $5.0 $5.0 $5.0
$4.3
$4.0 $4.2 $3.7 $4.0 $4.1
$7.4
$8.0 $7.9 $8.2
$5.0 $5.0 $5.0 $4.9
$4.1
$4
Median Deal Size
Q3 2006
Q2 2006
Q1 2006
Q4 2005
Q3 2005
Q2 2005
Q1 2005
Q4 2004
Q3 2004
Q2 2004
Q1 2004
Q4 2003
Q3 2003
Q2 2003
Q1 2003
Q4 2002
Q3 2002
Q2 2002
Q1 2002
Q4 2001
Q3 2001
Q2 2001
Q1 2001
Q4 2000
Q3 2000
Q2 2000
Q1 2000
$0
Q4 1999
$2
Mean Deal Size
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 27
Post-Money Valuations – Early Stage Companies
1995 to Q2 2006
12 Month Average
$10.2
$40
$35
$17.7
$17.5
$26.2
$19.3
$10.1
$8.8
$9.8
$8.7
$8.8
$6.6
$6.8
$5.7
$12.8
$0
$14.2
$5
$15.4
$10
$5.4
$7.9
$5.4
$15
$4.9
$4.6
$4.4
$20
$6.4
$25
$8.6
$30
Q4 95
Q4 96
Q4 97
Q4 98
Q4 99
Q4 00
Q4 01
Q4 02
Q4 03
Q4 04
Q4 05
Q2 06
Pre-money Valuation
Q4
Year
Total
Investment Amount
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Q2 2006
$19.83
$18.73
$17.69
$24.14
$25.45
$36.42
$27.89
$15.47
$14.17
$15.53
$15.51
$15.40
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 28
Post-Money Valuations – Expansion Stage Companies
1995 to Q2 2006
12 Month Average
$21.9
$110
$12.5
$13.8
$14.2
$33.5
$30.5
$34.0
$62.3
$86.9
$48.4
$33.3
$32.4
$49.7
$43.8
$52.4
$9.0
$10
$35.8
$30
$8.2
$7.5
$8.5
$50
$11.3
$13.9
$70
$11.9
$16.7
$90
-$10
Q4 95
Q4 96
Q4 97
Q4 98
Q4 99
Q4 00
Q4 01
Q4 02
Q4 03
Q4 04
Q4 05
Q2 06
Pre-money Valuation
Q4
Year
Total
Investment Amount
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Q2 2006
$44.25
$41. 04
$38.78
$42.99
$78.99
$108.80
$62.25
$45.78
$43.66
$61.62
$58.05
$66.21
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 29
Post-Money Valuations – Later Stage Companies
1995 to Q2 2006
12 Month Average
$180
$29.0
$160
$140
$20.4
$120
$14.0
$16.5
$14.3
$55.2
$105.2
$131.1
$79.0
$48.7
$54.7
$55.6
$78.5
$79.0
$16.8
$61.7
$0
$36.0 $7.7
$20
$41.2
$40
$8.2
$60
$10.7
$10.0
$80
$15.4
$20.6
$100
Q4 95
Q4 96
Q4 97
Q4 98
Q4 99
Q4 00
Q4 01
Q4 02
Q4 03
Q4 04
Q4 05
Q2 06
Pre-money Valuation
Q4
Year
Total
Investment Amount
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Q2 2006
$49.37
$43.72
$71.72
$65.85
$125.56
$160.08
$99.53
$65.44
$68.96
$71.09
$93.94
$92.99
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 30
Q3 2006 – Most Active Venture Investors
Total
Deals
Venture Capital Firm
Location
Intel Capital
Santa Clara, California
25
New Enterprise Associates
Baltimore, Maryland
23
Draper Fisher Jurvetson
Menlo Park, California
18
Menlo Ventures
Menlo Park, California
14
Kleiner Perkins Caufield & Byers
Menlo Park, California
13
U.S. Venture Partners
Menlo Park, California
13
Venrock Associates
New York, New York
13
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 31
Thomson Venture Economics’
U.S. Private Equity Performance Index (PEPI)
(Investment Horizon Performance as of 6/30/2006)
Fund Type
1 Year 3 Year 5 Year 10 Year 20 Year
Early/Seed VC
11.20
5.40
-7.60
36.90
20.50
Balanced VC
20.50
12.50
-0.20
17.00
14.50
Later Stage VC
16.40
9.40
-1.10
9.50
13.70
All Venture
16.20
9.00
-3.50
20.80
16.50
All Buyouts
27.30
16.30
6.60
8.90
13.40
Mezzanine
9.70
5.30
2.60
6.20
8.70
22.50
13.40
3.60
11.40
14.20
NASDAQ
5.6
10.2
0.0
6.2
8.95
S&P 500
6.6
9.2
0.7
6.6
8.49
All Private Equity
Source: Thomson Venture Economics/National Venture Capital Association
*Data as of 10/11/2006--The Private Equity Performance Index (PEPI) is based on the latest quarterly statistics from Thomson Venture
Economics’ Private Equity Performance Database analyzing the cashflows and returns for over 1862 US venture capital and private equity
partnerships with a capitalization of $679 billion. Sources are financial documents and schedules from Limited Partners investors and General
Partners. All returns are calculated by Thomson Venture Economics from the underlying financial cashflows. Returns are net to investors after
management fees and carried interest.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 32
Analysis of Venture-Backed IPO and M&A Activity
Total VentureBacked Offering
Size ($M)
Average
VentureBacked
Offering Size
($M)
Number of
Venturebacked M&A
deals
Average
M&A deal
size***
Date
Number
of IPOs**
2001
41
3,489.9
85.1
353
101.8
2002
24
2,473.5
103.1
318
52.1
2003
29
2,022.7
69.7
293
62.8
2004
93
11,014.9
118.4
340
83
2005 Q1
10
720.7
72.1
82
94.9
2005 Q2
10
714.1
71.5
80
133.1
2005 Q3
19
1,458.1
76.7
98
93.1
2005 Q4
17
1,568.1
92.2
86
65.7
2005
56
4,461.0
79.7
346
95.8
2006 Q1
10
540.8
54.1
104
112.2
2006 Q2
19
2,011.0
105.8
91
101.3
2006 Q3
8
943.2
116.8
74
81.1
**Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile
***Only accounts for deals with disclosed values
Source: Thomson Venture Economics/National Venture Capital Association
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 33
Venture Capital and LBO/Mezzanine Fundraising*
Venture Capital
Buyouts & Mezzanine**
Year
Number of
Funds
2002
171
3,821.2
88
24831.1
2003
145
10683.5
91
28846.8
2004
203
18601.6
137
51151.1
2005
207
27012.4
177
96028.0
2006 YTD
158
25419.0
103
83977.1
Q3 ’05
62
5611.1
63
22481.7
Q4 ‘05
74
8368.9
52
32954.7
Q1 ‘06
65
7098.5
48
25767.1
Q2 ‘06
62
13420.5
41
35345.3
Q3 ‘06
52
4900.0
32
22864.7
VC Raised
($M)
Number of
Buyout &
Funds
Mezzanine ($M)
Quarter
*These figures take into account the subtractive effect of downsized funds
** This category includes LBO, Mezzanine, Turnaround and Recapitalization-focused funds
***Date current as of 10/16/06
Source: Thomson Venture Economics/National Venture Capital Association
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 34
North Carolina Picture
Historical Trends
MoneyTree Total North Carolina Investments
1995 – YTD 2006
$1,800
$1,832
$1,600
$1,400
$1,200
$1,000
$762
$800
$591
$600
$556
$442
$385
$400
$333
$298
$185
$200
$349
$323
2004
2005
YTD
2006
55
54
52
$253
$0
1995
# of Deals
37
1996
1997
1998
1999
2000
2001
2002
2003
61
77
78
100
154
93
85
72
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 36
MoneyTree Total North Carolina Investments
1999 – Q3 2006
($ in millions)
1999
2002
2001
2000
2003
2004
2006
2005
$700
$625
$600
$495
$500
$421
$408
$400
$304
$300
$224
$196
$200
$77
$150
$175
$127
$108
$114
$119
$82
$100
$166
$158
$144
$140
$87 $98
$56
$69
$97
$79
$29
$118
$116
$118 $83
$56
$0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
# of Deals
15
25
18
42
42
39
38
35
31
24
23
15
20
23
22
20
13
28
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
13
18
9
15
17
14
11
14
18
11
19
18
15
November 2006
Slide 37
MoneyTree Total North Carolina Investments –
1999 – Q3 2006
($ in millions)
Total NC Investments
$2,000
$1,832
NC % of U.S. Total Amount
3%
2.55%
$1,800
$1,600
1.94%
$1,400
$1,200
1.75%
1.46%
1.43%
2%
1.78%
2.00%
1.46%
$1,000
$800
$762
$591
$600
1%
$556
$349
$400
$323
$442
$385
$200
$0
# of Deals
0%
1999
2000
2001
2002
2003
2004
2005
2006 YTD
100
154
93
85
72
55
54
52
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 38
MoneyTree Total North Carolina Deals–
1999 – Q3 2006
($ in millions)
Total # NC Deals
$160
NC % of U.S. Total Deals
3%
154
$140
2.77%
2.08%
$120
1.85%
2.05%
2.49%
1.97%
2%
$100
100
93
$80
1.82%
85
1.75%
72
$60
1%
55
$40
54
52
$20
$0
0%
1999
Amount
Invested $762
(in millions)
2000
2001
2002
2003
2004
2005
$1,832
$591
$556
$349
$323
$442
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2006 YTD
$385
November 2006
Slide 39
Total North Carolina Investments by Industry –
Q3 2006
Total % Change in $
Amount from
Deals
Q3 2005
Q3 2006
($ in millions)
$46.8
Biotech
Telecommunications
$32.0
Medical Devices &
Equipment
$22.0
$7.0
Financial Services
$6.3
Media & Entertainment
Semiconductors
$1.5
$.4
Software
$0
$10
$20
$30
$40
5
(58.2%)
1
100.0%
4
(42.6%)
1
133.3%
2
100.0%
1
100.0%
1
(97.5%)
$50
Q3 2006 Total: $116.0
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 40
Biotechnology Investments in NC vs. U.S.
1999 – Q3 2006
($ in millions)
$250
50%
$223
$191
$200
40%
43.2%
$159
$141
$150
23.8%
29.9%
30%
32.1%
28.7%
$103
$104
$104
22.0%
$100
$50
$85
13.4%
12.2%
5.0%
5.2%
4.2%
10%
5.1%
2.9%
2.4%
5.0%
2.6%
$0
0%
1999
2000
Total # NC Deals
# of Deals
20%
15
21
2001
2002
2003
2004
% of Total U.S. Investment in Biotech
17
16
12
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2005
2006 YTD
% of Total NC Investments
16
17
12
November 2006
Slide 41
Software Investments in NC vs. U.S.
1999 – Q3 2006
($ in millions)
$350
$327
30%
26.3%
$300
$250
18.7%
17.9%
15.7%
$200
$150
$155
$143
12.4%
10%
$87
$100
$50
20%
16.9%
5.3%
$43
1.4%
1.4%
1.5%
1.7%
1.0%
4.3%
$54
$23 0.5%
1.0%
$17
0.4%
$0
0%
1999
2000
Total # NC Deals
# of Deals
24
38
2001
2002
2003
% of Total U.S. Investment in Software
27
25
21
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2004
2005
2006 YTD
% of Total NC Investments
18
8
9
November 2006
Slide 42
Average Deal Size – NC vs. U.S.
1999 – Q3 2006
($ in millions)
$15
$13.3
$11.9
$10
$9.9
$9.1
$7.6
$7.1
$6.4
$6.5
$7.4
$7.3
$6.8
$8.2
$7.6 $7.4
$5.9
$4.9
$5
$0
1999
2000
2001
2002
U.S. Average Deal Size
2003
2004
2005
2006 YTD
NC Average Deal Size
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 43
North Carolina Companies Funded in Q3 2006
Company Name
Industry
Amphora Discovery Corporation
Amount
Biotechnology
$
123,000
Software
$
400,000
Biotechnology
$
14,000,000
Media & Entertainment
$
1,950,000
Semiconductors
$
1,475,000
Medical Devices & Equipment
$
1,000,000
Media & Entertainment
$
4,400,000
Medical Devices & Equipment
$
13,000,000
Telecommunications
$
31,999,900
Medical Devices & Equipment
$
7,500,000
ParinGenix, Inc.
Biotechnology
$
20,400,000
Phase Bioscience, Inc.
Biotechnology
$
293,000
RadarFind Corporation
Medical Devices & Equipment
$
500,000
Sicel Technologies, Inc.
Biotechnology
$
12,000,000
Financial Services
$
7,000,000
$
116,040,900
CareAnyware, Inc.
Cempra Pharmaceuticals, Inc.
eMinor, Inc.
HexaTech, Inc.
HyperBranch Medical Technology, Inc.
Inlet Technologies, Inc.
LipoScience, Inc.
Motricity, Inc.
nContact Surgical, Inc.
CONFIDENTIAL
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 44
VC Funds Active in North Carolina
Academy Funds
Kodiak Venture Partners
A.M. Pappas & Associates LLP
Lovett Miller & Company, Inc.
BancAmerica Capital Investors
Massey Burch
BB&T Capital Partners
NC IDEA
CapitalSouth Partners LLC
New Enterprise Associates
Carolina Financial Group
Noro-Moseley Partners
Carousel Capital Partners
Novak Biddle Venture Partners
Centura SBIC Inc.
Remington Capital Partners
Charlotte Angel Partners
Research Triangle Ventures
Core Capital
River Cities Capital Funds
Fairview Capital LLC
SJF Ventures
First Union Ventures Group
Southern Capitol Ventures
Franklin Street Partners
Southeast Interactive Technology Funds
Frontier Capital LLC
The Atlantis Group
Gardiner Capital
The North Carolina Enterprise Fund
Glenwood Venture Partners
The Aurora Funds
Golden Pine Ventures
The Trelys Funds
Grotech Capital Group
TriState Investment Group
Halifax Group
Wachovia Capital Partners
Hatteras BioCapital
Wakefield Group
H.I.G. Ventures
Venture First Associates
Intersouth Partners
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 45
Entrepreneurs and Venture Capital On-Line Resource List
www.pwc.com - The PricewaterhouseCoopers Global website.
www.pwcmoneytree.com, www.nvca.org, www.ventureeconomics.com - The PricewaterhouseCoopers/National Venture Capital
Association MoneyTree TM Report based on data from Thomson Financial is a quarterly study of equity investments made by the
venture capital community in private companies in the U.S. The survey identifies regional and national trends, entrepreneurial
developments and promising industry segments.
www.pwcnextwave.com - PricewaterhouseCoopers’ thought leadership articles for the world of private equity.
www.cfodirect.com - CFOdirect Network – PricewaterhouseCoopers’ online accounting, finance and business resource for senior
financial executives.
www.pwcV2R.com - The Vision to Reality Entrepreneur Resource Center site offers proven business plan templates, financial
models, technology-specific ratios, benchmarks and more.
www.pwcvc.com - The VC BestPractices site serves to provide an aggregate, comparative view of key issues and activities
impacting the venture capital community, and to identify best practices.
www.barometersurveys.com - PricewaterhouseCoopers’ Trendsetter and Technology Barometers site – result & analysis of the
quarterly survey of fast-growth and large company CEO’s.
www.cednc.org - The Council for Entrepreneurial Development
www.nc-tech.org - North Carolina Technologies Association
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 46
For more information, contact:
Jeff Barber
or
Peter Coode
Carolinas Technology Industry Group
Phone 919 755-3000
[email protected]
[email protected]
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
November 2006
Slide 47