Transcript None - Southeast VC

Q4/Full-Year 2007 Update
February 2008
Shaking the MoneyTree™
Raleigh, NC
February 2008
PricewaterhouseCoopers/ National Venture
Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Today’s program
The MoneyTree Report – Q4/Full-Year 2007 Analysis
•
presented by Jeff Barber, PricewaterhouseCoopers LLP
Venture Capital Panel
•
•
Mitch Mumma, Intersouth Partners
Sherrill Neff, Quaker BioVentures
Question and Answer Session
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 2
Speaker Bios
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 3
Jeff Barber
Jeff Barber is a partner in the PricewaterhouseCoopers Raleigh office. He is a leader in the PwC
Carolinas Technology Industry Group, a team of thirty professionals who provide services and support
to over fifty technology-based companies. Jeff has over twenty-five years of experience serving
technology companies, including extensive experience working with clients from the organizational
stage through the initial public offering and subsequent expansion.
Jeff spent two years in the PwC National Office in New York City where he worked in the Firm’s
Accounting and SEC Group. His responsibilities there included researching accounting issues, writing
various PricewaterhouseCoopers publications and assisting the Firm’s national consulting partners in
their consultation on client related matters.
Jeff is actively involved in the Triangle area business community. He is currently on the board of
directors of the Council for Entrepreneurial Development (“CED”), where he is a past chairman of the
board, and the North Carolina Technology Association (“NCTA”), where he has served as Treasurer. In
January 2006, Jeff received the NCTA “Volunteer of the Year” award. In June 2000, Jeff received the
CED “Outstanding Service” award. Jeff is also actively involved in various civic organizations. He
currently serves on the board of directors of the North Carolina Museum of Art Foundation and the
Juvenile Diabetes Research Foundation. In the past, he has served as a member of the UNC
Accounting Advisory Board and a member of the NCSU College of Management Board of Advisors. In
addition, Jeff has served as president of Artspace, Inc., chairman of the board of the Community
Learning Centers, Inc., a member of the board of directors of the Greater Raleigh Chamber of
Commerce and a member of the board of directors of the United Arts Council. Jeff is a graduate of the
Leadership Raleigh and Leadership Lexington (KY) training programs. He holds a B.S. in Accounting
from the University of Kentucky.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 4
Mitch Mumma
Mitch is primarily responsible for Intersouth's information technology portfolio. He joined Intersouth in
1989 at the inception of Fund II. Mitch has full-cycle venture investment experience and has held
management positions with various companies throughout his career, including three start-up
companies, all of which subsequently went public.
Mitch is known for board and syndicate leadership as well as tireless focus on portfolio company
success. He has provided early financing and venture leadership for numerous successful companies.
He currently serves on the boards of five portfolio companies. He also served as CEO of an Intersouth
portfolio company.
Prior to joining Intersouth, Mitch worked in finance and operations for a high growth computer hardware
and software company. Previously, he worked as a manager in the high growth business practice at
Touche Ross & Co. (now Deloitte & Touche).
Mitch is a leader in the entrepreneurial community and a sought-after speaker. He is an adjunct
professor at the UNC Kenan-Flagler School of Business and has long held leadership roles in the
Council for Entrepreneurial Development (CED) and North Carolina Technology Association (NCTA). He
also has served as a mentor to the Kauffman Fellows Program. He earned a degree in Management
Science from Duke University.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 5
Sherrill Neff
Sherrill is a founding partner of Quaker BioVentures. He is well regarded in the
biopharmaceutical industry, is a previous Chairman of the Greater Philadelphia Venture Group,
and previous President of the Pennsylvania Biotechnology Association. He sits on the following
boards of directors: Amicus Therapeutics, Biolex Therapeutics, Neuronetics, Optherion, Regado
Biosciences, Resource Capital Corporation, University City Science Center, the Biotechnology
Institute, and the Policy Board of WXPN at the University of Pennsylvania.
Prior to forming Quaker BioVentures, Sherrill was President, Chief Operating Officer, and a
Director of Neose Technologies, Inc., a publicly traded life sciences company. Previously, he was
Senior Vice President, Corporate Development at U.S. Healthcare, Inc., a leading publicly traded
health maintenance organization. Sherrill was formerly a Managing Director in the investment
banking division of Alex. Brown & Sons, and formerly an attorney at Morgan, Lewis & Bockius.
Sherrill is a graduate of Wesleyan University and the University of Michigan Law School.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 6
About The Report
• PricewaterhouseCoopers and the National Venture Capital Association produce the
MoneyTree Report™ based on data from Thomson Financial
• ‘Core’ measure of equity investments in venture-backed companies in the United
States
• Companies have received at least one round of financing involving a professional VC
firm or equivalent
• Captures: tranches, not term sheets, foreign VCs, qualified private placement
• Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc.
• MoneyTree™ Report in its 13th year
• Results online at www.pwcmoneytree.com, www.nvca.org, www.venturexpert.com
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 7
The National Picture
Historical Trends
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 8
MoneyTree Total Investments: Q1 1999 – Q4 2007
($ in billions)
$28.4
$28.2
$26.4
$32.0
$22.1
$23.3
$24.0
$5.3
$6.3
$5.0
$6.0
$5.1
$6.3
$5.9
$5.8
2002
2003
2004
2005
2001
2002
2003
2004
$7.5
$7.3
$7.6
$7.0
$4.3
$5.0
$4.9
$5.6
2001
$6.4
$7.0
$6.8
$6.3
$6.9
$6.0
$4.6
$4.5
$6.6
$8.0
$12.8
$11.4
$8.3
$8.1
$11.0
$13.1
$16.0
$0.0
2000
1999
1999
2000
2007
2006
2005
2006
2007
#
of
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4 Q1 Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
1742 1284 1219 1000 975 887 848 688 719 691 736 712 783 712
847
685
838
724
820
785
809
868
944
900
918
858 1018 974
963
Deals
918 1304
1420 1865 2130 2109 1930
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 9
MoneyTree Total Investments: 1980 – 2007
Annual Venture Capital Investments
1980 to 2007
($ in billions)
$105.1
$120
$100
$23.0
$22.5
$19.7
$21.1
$14.9
$11.3
$8.0
$4.1
$3.7
$3.6
$2.2
$2.8
$3.3
$3.3
$3.3
$3.0
$2.8
$3.0
$1.6
$1.2
$0.6
$3.0
$20
$22.0
$40
$26.6
$40.6
$60
$29.4
$54.1
$80
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
19
88
19
87
19
86
19
85
19
84
19
83
19
82
19
81
19
19
80
$0
February 2008
Slide 10
Investments by Region: Q4 2007
Sacramento/N. CA
$48.9
7 Deals
Upstate NY
$74.7
12 Deals
Northwest
$438.2
54 Deals
North Central
$159.2
28 Deals
Silicon Valley
$2,399.3
301 Deals
Midwest
$243.8
62 Deals
Colorado
$102.4
20 Deals
LA/Orange County
$253.9
46 Deals
Southwest
$49.8
17 Deals
San Diego
$423.8
32 Deals
South Central
$58.9
9 Deals
Texas
$426.6
45 Deals
New England
$860.7
111 Deals
NY Metro
$471.0
70 Deals
Philadelphia Metro
$107.7
21 Deals
DC/Metroplex
$403.9
71 Deals
Southeast
$479.4
55 Deals
KAU AI
AK/HI/PR
$8.9
2 Deals
NI I HAU
O AHU
M O L O KAI
M AUI
L ANAI
KAHO O L A
W E
HA W AI I
Q4 2007 Total Investments - $7,011 in 963 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 11
Investments by Region: Q4 2007
($ in millions )
$2,399.3
Silicon Valley
$860.7
New England
Region
$479.4
Southeast
$471.0
NY Metro
# of
% Change $
Deals
from Q3 ‘07
Silicon Valley
301
-9.29%
New England
111
-11.34%
Northwest
$438.2
DC/Metroplex
71
14.95%
Texas
$426.6
NY Metro
70
4.20%
San Diego
$423.8
Midwest
62
Southeast
55
-37.65%
22.29%
21.16%
-39.89%
8.52%
3.05%
40.77%
-61.32%
-50.16%
-67.88%
185.64%
226.59%
237.49%
118.82%
-7.82%
$403.9
DC/Metroplex
Northwest
54
LA/Orange County
$253.9
LA/Orange County
46
Midwest
$243.8
Texas
45
San Diego
32
North Central
28
$159.2
North Central
Philadelphia Metro
$107.7
Philadelphia Metro
21
Colorado
$102.4
Colorado
20
SouthWest
17
Upstate NY
12
$74.7
Upstate NY
South Central
$58.9
South Central
9
SouthWest
$49.8
Sacramento/N.Cal
7
AK/HI/PRl
2
$48.9
Sacramento/N.Cal
AK/HI/PR
Total
963
$8.9
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Q4 2007 Total: $7,011 in 963 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 12
Investments by Region: Full Year 2007
Sacramento/N. CA
$99.9
16 Deals
Upstate NY
$137.4
32 Deals
Northwest
$1,636.4
216 Deals
North Central
$525.6
80 Deals
Silicon Valley
$10,066.5
1,184 Deals
Midwest
$1,298.3
236 Deals
Colorado
$564.2
86 Deals
LA/Orange County
$1,647.8
205 Deals
Southwest
$540.9
90 Deals
San Diego
$1,988.8
159 Deals
South Central
$92.5
27 Deals
Texas
$1,416.5
166 Deals
New England
$3,695.3
478 Deals
NY Metro
$1,715.5
254 Deals
Philadelphia Metro
$861.5
125 Deals
DC/Metroplex
$1,241.8
207 Deals
Southeast
$1,856.4
243 Deals
KAU AI
AK/HI/PR
$20.5 9 Deals
NI I HAU
O AHU
M O L O KAI
M AUI
L ANAI
KAHO O L A
W E
HA W AI I
2007 Total Investments - $29.4B in 3,813 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 13
Investments by Region: Full Year 2007
($ in millions )
$10,066.5
Silicon Valley
$3,695.3
New England
Region
$1,988.8
San Diego
$1,856.4
Southeast
$1,715.5
NY Metro
# of
% Change $
Deals
from 2006
Silicon Valley
1,184
5.65%
New England
478
18.56%
NY Metro
254
-14.20%
LA/Orange County
$1,647.8
Southeast
243
46.42%
Northwest
$1,636.4
Midwest
Northwest
DC/Metroplex
LA/Orange County
Texas
San Diego
Philadelphia Metro
SouthWest
Colorado
North Central
Upstate NY
South Central
Sacramento/N.Cal
AK/HI/PR
236
216
207
205
166
159
125
90
86
80
32
27
16
9
3,813
32.82%
37.04%
8.43%
-14.52%
-2.28%
52.27%
12.64%
7.79%
-14.61%
31.15%
-11.84%
17.15%
254.63%
-56.26%
10.75%
$1,416.5
Texas
Midwest
$1,298.3
DC/Metroplex
$1,241.8
$861.5
Philadelphia Metro
Colorado
$564.2
SouthWest
$540.9
North Central
$525.6
$137.4
Upstate NY
Sacramento/N.Cal
$99.9
South Central
$92.5
Total
AK/HI/PR
$20.5
$0
$3,000
$6,000
$9,000
$12,000
2007 Total: $29.4B in 3,813 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 14
Q4 2007 Top 10 States Garnering Venture Funds
State
Deals
Investment Amount
1.
California
386
$
3,125,906,200
2.
Massachusetts
104
$
830,269,700
3.
Texas
85
$
426,608,200
4.
New York
57
$
360,388,500
5.
North Carolina
21
$
353,337,100
6.
Washington
44
$
345,468,300
7.
Maryland
38
$
205,813,100
8.
Florida
17
$
193,025,100
9.
Virginia
28
$
164,865,300
New Jersey
19
$
137,133,500
10.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 15
Full-Year 2007 Top 10 States Garnering Venture Funds
State
Deals
Investment Amount
1.
California
1,564
$
13,802,961,100
2.
Massachusetts
430
$
3,489,131,900
3.
Texas
166
$
1,416,470,600
4.
Washington
170
$
1,314,590,200
5.
New York
191
$
1,195,328,800
6.
Pennsylvania
150
$
835,166,500
7.
North Carolina
71
$
812,022,200
8.
Maryland
99
$
635,283,700
9.
New Jersey
91
$
624,906,800
Florida
63
$
608,338,400
10.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 16
Investments by Industry: Full Year 2007
($ in millions)
$5,273.0
Software
$5,215.5
Biotechnology
$3,897.7
Medical Devices and Equipment
$2,696.3
Industrial/Energy
$2,143.1
Telecommunications
Media and Entertainment
$1,877.4
Semiconductors
$1,848.0
$1,297.6
IT Services
$1,252.1
Networking and Equipment
$840.0
Business Products and Services
$655.9
Electronics/Instrumentation
Computers and Peripherals
$579.6
Financial Services
$566.1
$468.2
Consumer Products and Services
$415.3
Retailing/Distribution
$368.1
Healthcare Services
Other
Industry
$0
$2,000
% Change $
Deals from 2006
Software
Biotechnology
Medical Devices and Equipment
Media and Entertainment
Telecommunications
Industrial/Energy
Semiconductors
IT Services
Business Products and Services
Networking and Equipment
905
477
385
340
290
286
210
202
129
124
2.72%
9.51%
39.55%
10.31%
-17.37%
44.15%
-13.77%
19.40%
34.19%
17.49%
Consumer Products and Services
Electronics/Instrumentation
Financial Services
Computers and Peripherals
Retailing/Distribution
Healthcare Services
102
91
88
66
58
49
-6.36%
-4.86%
29.38%
16.62%
91.38%
-13.48%
Other
11
TOTAL
$11.8
# of
3813
$4,000
57.33%
10.75%
$6,000
2007 Total: $29.4B in 3,813 Deals
Visit www.pwcmoneytree.com for Industry definitions
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 17
Investments by Industry –
Quarterly Percent of Total U.S. Investments
Top 5 Industries – Q4 ‘06 to Q4 ‘07
(% of Total Dollars)
18.13%
16.00%
20.82%
6.29%
7.42%
6.34%
16.89%
19.72%
5%
5.07%
7.83%
12.85%
11.38%
14.48%
14.34%
10.64%
7.57%
6.08%
10%
7.31%
15%
9.24%
12.47%
18.35%
15.19%
17.10%
20%
20.37%
25%
19.69%
30%
0%
Biotechnology
Industrial/Energy
Q4 '06
Medical Devices and
Equipment
Q1 '07
Q2 '07
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Q3 '07
Semiconductors
Software
Q4 '07
February 2008
Slide 18
Life Science Investments –
Percent of Total U.S. Investments*
Life Science Sectors – Q4 ’06 to Q4 ‘07
31.19%
12.85%
11.38%
14.48%
14.34%
10.64%
18.35%
15.19%
15%
17.10%
20%
20.37%
25%
19.69%
30%
26.57%
35%
31.58%
30.33%
40%
34.71%
(% of Total Dollars)
10%
5%
0%
Life Sciences
Medical Devices and Equipment
Biotechnology
Q4 '06
Q1 '07
Q2 '07
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Q3 '07
Q4 '07
February 2008
Slide 19
Investments by Stage of Development: Full Year 2007
($ in millions)
Later Stage
$12,215.0
Expansion
$10,845.2
Early Stage
Stage of Development
% Change in
$ Amount
Deals
from 2006
Expansion Stage
1,235
-5.65%
Later Stage
1,168
24.68%
Early Stage
995
26.58%
Startup/Seed
415
-0.28%
3,813
10.75%
# of
$5,192.2
Startup/Seed
$1,153.3
$0
Total
$3,000
$6,000
$9,000
$12,000
$15,000
2007 Totals: $29.4B in 3,813 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 20
Investments by Sequence of Financing: Full Year 2007
($ in millions)
5th and Beyond
$8,710.4
$7,229.6
First
Financing
Second
# of
Deals
$5,069.7
$4,371.1
Fourth
$4,024.9
$0
$5,000
$ Amount from
2006
1,267
19.61%
5th and Beyond
911
23.56%
Second
733
0.79%
Third
500
2.11%
Fourth
402
-2.92%
Total
3,813
10.75%
First
Third
% Change in
$10,000
2007 Totals: $29.4B in 3,813 Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 21
First Sequence Financing –
Investment Amount
First Sequence Investments
$10
$9
$8.8
$8.4
($ in billions)
$7
$6
$6.2
$5.4
$8
2002
2003
2004
2005
2006
$1.7
$1.7
$1.9
$1.9
$1.4
$1.6
$1.7
$1.4
$1
$1.4
$1.5
$1.4
$1.4
$2
$1.1
$1.3
$1.2
$1.3
$3
$0.7
$1.0
$1.1
$1.1
$2.9
$2.0
$1.3
$1.3
$4
$1.3
$1.2
$1.0
$0.8
$5
$0
2000
2001
Q1
Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2007
Q4
February 2008
Slide 22
Stage of Development –
Quarterly Percent of Total First Sequence Dollars
(% of first sequence dollars)
Stage Development – Q4 2006 to Q4 2007
70%
9.94%
15.74%
9.48%
15.91%
32.69%
37.53%
30.49%
25.96%
35.39%
38.11%
8.09%
12.54%
9.34%
10%
10.00%
20%
14.59%
30%
19.26%
40%
34.19%
38.71%
50%
50.69%
51.36%
60%
0%
Startup/Seed
Early Stage
Q4 '06
Q1 '07
Expansion
Q2 '07
Q3 '07
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Later Stage
Q4 '07
February 2008
Slide 23
First Sequence Deals in Startup & Early Stage Companies
3000
40%
31.9%
28.3%
30%
25.8%
2000
2,501
29.3%
35%
31.6%
25.9%
22.4%
1,759
20.2%
19.5%
22.5%
23.1%
23.4%
25%
19.9%
20%
15%
894
10%
707
581
691
840
905
539
604
728
813
946
1000
5%
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
0%
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
February 2008
Slide 24
First Sequence Financing –
Percent of Total U.S. Investments
60%
55%
50%
45%
40%
34.7%
35%
30%
32.3%
26.9%
28.3%
26.7% 26.0%
24.9% 24.9% 25.4%
27.7% 27.1%
29.4%
30.8%
25%
32.1%
31.9%
33.6%
34.6%
32.4%
30.6% 29.8%
30.4%
29.9%
35.6%
34.6%
28.0%
25.1%
19.3%
20%
22.2%
21.9%
20.2%
19.9%
15%
27.3%
23.6% 24.0%
24.9%
23.0%
21.4%
20.4% 19.9% 20.3%
24.1%
21.1%
22.8% 22.7%
23.8% 24.7%
17.9% 17.4%
10%
% of Total Dollars
Q4 2007
Q3 2007
Q2 2007
Q1 2007
Q4 2006
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
0%
Q1 2002
5%
% of Total Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 25
Median Deal Size vs. Mean Deal Size –
Quarterly Total U.S. Investments
In Millions ($)
$10
$8.7
$8.3
$7.2
$7.1
$7.7
$7.2
$7.0
$7.1
$7.4
$7.4
$7.8
$7.6
$7.3
$7.2
$6.8
$4.6
$4.0
$4.0
Q3 2003
$4.0
Q2 2003
$4.5
$4.5
$4.8
$4.3
$4.8
$4.5
$4.5
$4.0
$4.5
$4.0
$4.0
$4.0
$4.3
$4.0
$4.0
Q4 2007
$5.0
$4.5
Q3 2007
$6.2
$6
$4.0
$7.1
$6.8
$7.5
Q4 2006
$6.3
$7.4
Q3 2006
$6.6
$6.8
$7.4
Q2 2006
$8
$3.6
$4
$3.2
Median Deal Size
Q2 2007
Q1 2007
Q1 2006
Q4 2005
Q3 2005
Q2 2005
Q1 2005
Q4 2004
Q3 2004
Q2 2004
Q1 2004
Q4 2003
Q1 2003
Q4 2002
Q3 2002
Q2 2002
$0
Q1 2002
$2
Mean Deal Size
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 26
Post-Money Valuations – Early Stage Companies
Q3 2000 to Q3 2007
12 Month Average
$40
$9.9
35.07
$35
$9.4
$30
30.98
$25
$20
$8.5
$10.5
$8.6
$6.8
$13.9
$6.1
$10.5
$0
$21.6
$5
12.83
$25.2
$10
14.52
$6.0
$5.3
$5.4
13.74
$6.0
16.53
15.94
$15
$7.6
21.54
Q3 00
Q3 01
Q3 02
Q3 03
Q3 04
Q3 05
Q3 06
Q3 07
Pre-money Valuation
Post-money Valuation
Investment Amount
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 27
Post-Money Valuations – Expansion Stage Companies
Q3 2000 to Q3 2007
76.52
$70
$60
65.54
57.67
52.38
$40
40.13
59.92
$10.7
$13.2
$50
60.3
$12.3
$80
$16.3
$90
$15.3
$100
$14.0
103.47
$12.6
$110
$21.2
12 Month Average
$30
$39.1
$29.5
$45.1
$46.3
$50.3
$47.6
$0
$60.2
$10
$82.3
$20
Q3 00
Q3 01
Q3 02
Q3 03
Q3 04
Q3 05
Q3 06
Q3 07
Pre-money Valuation
Post-money Valuation
Investment Amount
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 28
Post-Money Valuations – Later Stage Companies
Q3 2000 to Q3 2007
12 Month Average
$14.4
68.87
$92.6
$51.7
$53.3
$52.5
$68.2
$99.0
$82.6
$14.3
$139.1
$50
$0
67.58
$17.0
68.74
$15.7
83.96
96.04
$13.5
113.34
$16.4
$100
116.26
$23.7
$150
$29.4
168.5
Q3 00
Q3 01
Q3 02
Q3 03
Q3 04
Q3 05
Q3 06
Q3 07
Pre-money Valuation
Post-money Valuation
Investment Amount
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 29
Full Year 2007 – Most Active Venture Investors
Venture Capital Firm
Location
Draper Fisher Jurvetson
Menlo Park, California
100
New Enterprise Associates
Baltimore, Maryland
87
Intel Capital
Santa Clara, California
70
Polaris Venture Partners
Waltham, Massachusetts
61
Kleiner Perkins Caufield & Byers
Menlo Park, California
56
Sequoia Capital
Menlo Park, California
55
Menlo Ventures
Menlo Park, California
54
Canaan Partners
Westport, Connecticut
50
U.S. Venture Partners
Menlo Park, California
49
Accel Partners
Palo Alto, California
48
Foundation Capital
Menlo Park, California
48
Venrock Associates
New York, New York
47
InterWest Partners
Menlo Park, California
47
Highland Capital Partners LLC
Lexington, Massachusetts
47
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Total Deals
February 2008
Slide 30
Thomson Financial
U.S. Private Equity Performance Index (PEPI)
(Investment Horizon Performance as of 9/30/2007)
Fund Type
1 Year
3 Year 5 Year
10 Year
20 Year
Early/Seed VC
23.6
6.8
.3.1
34.5
20.8
Balanced VC
38.0
14.4
9.9
15.1
14.3
Later Stage VC
41.4
10.5
8.4
8.3
13.8
All Venture (through 6/30/07)
23.5
10.5
4.8
19.3
16.4
All Venture (through 9/30/06)
8.2
9.3
-1.0
20.8
16.6
NASDAQ
14.2
12.2
17.9
4.8
9.4
S&P 500
10.8
10.7
13.1
4.9
8.1
Source: Thomson Financial/National Venture Capital Association
*The Private Equity Performance Index is based on the latest quarterly statistics from Thomson Financials' Private
Equity Performance Database analyzing the cashflows and returns for over 1860 US venture capital and private
equity partnerships with a capitalization of $678 billion. Sources are financial documents and schedules from Limited
Partner investors and General Partners. All returns are calculated by Thomson Financial from the underlying
financial cashflows. Returns are net to investor after management fees and carried interest.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 31
Analysis of Venture-Backed IPO and M&A Activity
Date
# of
IPOs*
Total Venture-Backed Average Venture-Backed Number of VentureOffer Size ($M)
Offer Size ($M)
backed M&A deals
2003
29
2,022.7
69.8
291
62.8
2004
93
11,014.9
118.4
339
83.0
2005
56
4,461.0
79.7
347
95.8
2006 Q1
10
540.8
54.1
105
111.2
2006 Q2
19
2,011.0
105.8
104
100.9
2006 Q3
8
934.2
116.8
93
92.7
2006 Q4
20
1,631.1
81.6
61
154.7
2006
57
5,117.1
89.8
363
110.6
2007 Q1
18
2,190.6
121.7
82
156.6
2007 Q2
25
4,146.8
165.9
82
114.0
2007 Q3
12
945.2
78.8
95
206.0
2007 Q4
31
3,043.8
98.2
45
228.4
2007
86
10,326.3
120.1
304
175.9
* Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile
**Only accounts for deals with disclosed values
Source: Thomson Financial/ National Venture Capital Association
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Average M&A
deal size**
February 2008
Slide 32
Venture Capital Fundraising*
Year
First Time
Funds
Follow-On
Funds
Total Funds
VC Raised
($M)
2002
22
157
179
3936.9
2003
38
114
152
10606.1
2004
51
157
208
19057.6
2005
58
170
228
28282.6
2006
46
183
229
31698.1
2007
55
180
235
34675.9
Q1 ‘06
19
56
75
6544.5
Q2 ’06
12
65
77
14185.5
Q3 ’06
12
55
67
5375.3
Q4 ’06
15
50
65
5592.8
Q1 ’07
21
59
80
5754.2
Q2 ’07
17
68
85
9141.8
Q3’ 07
15
62
77
8763.7
Q4’ 07
16
47
63
11016.2
Quarter
Source: Thomson Financial/National Venture Capital Association
*These figures take into account the subtractive effect of downsized funds
Date current as of 1/14/08
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 33
North Carolina Picture
Historical Trends
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 34
MoneyTree Total North Carolina Investments
2000 – 2007
($ in millions)
2000
2001
2002
2003
2004
2005
2006
2007
$700
$617
$600
$498
$500
$408
$400
$353
$303
$300
$226
$225
$163
$144
$158
$133
$114
$108
$119
$102
$82
$93
$56
$200
$100
$153
$175
$129
$97
$83
$119
$83
$136
$97
$141
$123
$93
$29
$56
$0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
# of Deals
42
37
41
34
32
22
22
14
20
23
22
20
14
28
14
20
9
15
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
17
15
11
13
18
11
20
19
16
15
17
18
15
21
February 2008
Slide 35
MoneyTree Total North Carolina Investments –
2000 – 2007
($ in millions)
$2,000
$1,800
3%
$1,826
2.5%
3.0%
$1,600
$1,400
$1,200
1.9%
1.8%
1.7%
1.9%
2%
1.5%
1.4%
$1,000
$812
$800
$553
$600
$584
$400
$433
$356
1%
$510
$338
$200
$0
0%
2000
2001
2002
2003
Total NC Investments
# of Deals
154
90
85
77
2004
2005
2006
2007
NC % of U.S. Total Amount
56
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
53
70
71
February 2008
Slide 36
MoneyTree Total North Carolina Deals–
2000 – 2007
($ in millions)
$160
3%
156
$140
2.8%
2.6%
2.0%
$120
1.9%
2%
$100
2.0%
90
$80
1.8%
85
1.9%
1.7%
77
$60
70
56
$40
71
1%
53
$20
$0
0%
2000
2001
Amount
Invested
(in millions)
$1,826
2002
2003
Total # NC Deals
$584
$553
$358
2004
2005
2006
2007
NC % of U.S. Total Deals
$338
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
$433
$510
$812
February 2008
Slide 37
North Carolina Investments by MSA
2000 - 2007
($ in millions)
2000
2001
Charlotte/Gastonia
2003
Greensboro/Winston-Salem
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2006
Raleigh/Durham/Chapel Hill
$2.0
$5.5
$19.7
$122.7
2005
$7.5
$58.5
$362.5
$369.7
2004
$16.6
$21.4
$88.4
$36.5
$34.6
$21.2
$46.7
$46.1
2002
$4.8
$0
$0.0
$90.2
$10.5
$100
$58.1
$200
$105.2
$300
$212.7
$285.7
$400
$0.0
$500
$25.6
$483.3
$600
$17.0
$700
$455.8
$800
$662.7
$900
$744.0
$1,000.2
$1,000
2007
Other
February 2008
Slide 38
North Carolina Investment % by MSA
2000 - 2007
85%
80%
82%
83%
90%
71%
80%
92%
100%
55%
63%
70%
60%
2000
2001
Charlotte/Gastonia
2003
2004
Greensboro/Winston-Salem
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2005
7%
2006
Raleigh/Durham/Chapel Hill
0%
1%
1%
4%
6%
4%
5%
11%
5%
10%
6%
1%
2002
0%
0%
0%
2%
6%
10%
3%
20%
8%
8%
15%
30%
24%
26%
40%
36%
50%
2007
Other
February 2008
Slide 39
Total North Carolina Investments by Industry –
Full-Year 2007
Total
Deals
2007
($ in millions)
Telecommunications
$254.8
Biotechnology
$237.2
$99.0
Medical Devices & Equipment
Software
$42.8
% Change in $
Amount from
2006
4
152%
25
120.2%
8
41.3%
13
47.7%
Media & Entertainment
$33.0
2
75.1%
Business Products & Svcs
$30.0
1
900.0%
Electronics/Instrumentation
$27.6
5
242.7%
Semiconductors
$23.5
4
13.1%
Industrial/Energy
$23.0
4
(18.3%)
1
10.1%
1
(65.6%)
3
394.0%
$20.0
Consumer Products & Svcs
Networking & Equipment
$8.0
$13.0
Other
$0
$40
$80
$120
$160
$200
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
$240
$280
2007 Total: $812.0
February 2008
Slide 40
Total North Carolina vs. U.S. Investments by Industry – Full-Year 2007
Total North Carolina
Amount
$812.0 million
(in millions)
Total U.S. Amount
$29.4 billion
(in billions)
Electronics & Instrumentation
$27.6
Software
$42.7
Others
$6.4
3%
5%
Biotechnology
$237.2
Biotechnology
$5.2
7%
Others
$87.6
32%
Industrial/
Energy
9%
$2.7
4%
11%
12%
Telecom
$2.1
18%
29%
Telecommunications
$254.8
23%
6% Semiconductors
$1.8
Software
$5.3
4%
13%
6%
4%
18%
Media &
Entertainment
$33.0
Business Products &
Services
$30.0
Medical Devices &
Equipment
$99.0
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
Media &
Entertainment
$1.9
Medical Devices
& Equipment
$3.9
February 2008
Slide 41
Biotechnology Investments in NC vs. U.S.
2000 – 2007
($ in millions)
$250
$237
$227
50%
41.7%
$200
35.6%
$161
$150
40%
$181
41.1%
33.9%
30%
$140
29.2%
$100
$121
$108
$120
24.1%
20%
21.1%
12.4%
$50
5.3%
4.1%
5.0%
3.3%
2.8%
4.8%
4.7%
10%
2.3%
$0
0%
2000
2001
Total # NC Deals
21
17
2002
2003
2004
2005
% of Total U.S. Investment in Biotech
17
17
18
2006
2007
% of Total NC Investments
14
16
25
# of Deals
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 42
Software Investments in NC vs. U.S.
2000 – 2007
($ in millions)
$350
$323
30%
26.4%
$300
$250
17.8%
$200
14.9%
12.4%
$154
$150
$82
$100
$58
$50
20%
17.2%
1.3%
1.5%
1.6%
5.7%
5.4%
$43
1.0%
1.1%
$23 0.5%
$29 0.6%
7.4%
$42
0.5%
$0
0%
2000
2001
Total # NC Deals
# of Deals
10%
36
25
2002
2003
2004
2005
% of Total U.S. Investment in Software
24
22
19
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
2006
2007
% of Total NC Investments
8
12
13
February 2008
Slide 43
Average Deal Size – NC vs. U.S.
2000 – 2007
($ in millions)
$15
$13.3
$11.9
$10
$11.4
$9.1
$8.2
$7.1
$6.5
$6.5
$7.3
$7.3
$6.8
$7.3 $7.3
$7.7
$6.0
$4.7
$5
$0
2000
2001
2002
2003
U.S. Average Deal Size
2004
2005
2006
2007
NC Average Deal Size
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 44
North Carolina Companies Funded in Q1 2007
Company Name
Industry
6th Sense Analytics, Inc.
Amount
Software
$
5,000,000
AlphaVax, Inc.
Biotechnology
$
12,650,000
Chimerix, Inc.
Biotechnology
$
23,099,900
Medical Devices & Equipment
$
2,000,000
Electronics/Instrumentation
$
883,000
Medical Devices & Equipment
$
50,000,500
Industrial/Energy
$
15,999,900
Telecommunications
$
50,000,000
Electronics/Instrumentation
$
5,292,000
Phase Bioscience, Inc.
Biotechnology
$
1,250,100
Regado Biosciences, Inc.
Biotechnology
$
23,000,200
Software
$
1,749,900
Biotechnology
$
13,999,800
IT Services
$
5,000,000
Tranzyme Pharma, Inc.
Biotechnology
$
11,000,000
Unit Dose Solutions, Inc.
Biotechnology
$
2,500,000
IT Services
$
2,274,000
$
225,699,300
HyperBranch Medical Technology, Inc.
INI Power Systems, Inc.
InnerPulse, Inc.
Liquidia Technologies, Inc.
Motricity
Nextreme Thermal Solutions, Inc.
rPath, Inc.
Serenex, Inc.
StrikeIron, Inc.
XDS, Inc.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 45
North Carolina Companies Funded in Q2 2007
Company Name
Industry
Biolex, Inc.
Amount
Biotechnology
$
29,999,600
Software
$
2,000,000
Biotechnology
$
15,448,000
Business Products and Services
$
29,999,900
Biotechnology
$
8,250,000
Software
$
4,000,000
Computers and Peripherals
$
6,000,000
Software
$
5,350,000
Electronics/Instrumentation
$
4,000,000
Biotechnology
$
500,000
Industrial/Energy
$
5,555,000
Biotechnology
$
3,314,100
Industrial/Energy
$
undisclosed
Medical Devices and Equipment
$
3,000,000
Semprius, Inc.
Semiconductors
$
4,100,000
Serenex, Inc.
Biotechnology
$
11,999,900
Viamet Pharmaceuticals, Inc.
Biotechnology
$
999,900
Software
$
1,330,000
$
135,846,400
Brightdoor Systems, Inc.
Cetero Research
ChannelAdvisor Corporation
CoLucid Pharmaceuticals, Inc.
Datacraft Solutions, Inc.
Digitalsmiths Corporation
iContact Corporation
INI Power Systems, Inc.
Integrated Oncology Solutions, Inc.
Micell Technologies, Inc.
NephroGenex, Inc.
Nomacorc LLC
RadarFind Corporation
Visitar, Inc.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 46
North Carolina Companies Funded in Q3 2007
Company Name
Industry
Amount
Aerie Pharmaceuticals, Inc.
Biotechnology
$
10,000,000
Aldagen, Inc.
Biotechnology
$
9,000,000
Batanga.com
Media and Entertainment
$
30,000,000
Cempra Pharmaceuticals
Biotechnology
$
8,297,000
CeNeRx BioPharma, Inc.
Biotechnology
$
2,027,000
Networking and Equipment
$
8,000,000
Medical Devices & Equipment
$
undisclosed
Retailing/Distribution
$
2,044,000
Telecommunications
$
7,499,000
Industrial/Energy
$
1,500,000
Electroinics/Instrumentation
$
1,000,000
Telecommunications
$
12,272,200
Semiconductors
$
550,000
Viamet Pharmaceuticals
Biotechnology
$
1,200,000
CONFIDENTIAL
Biotechnology
$
3,750,000
$
97,139,200
Hatteras Networks, Inc.
Hyperbranch Medical Technology, Inc.
Immaculate Baking Company
M3 Technology Group
Micell Technologies, Inc.
NCSRT, Inc.
Overture Networks, Inc.
Semprius, Inc.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 47
North Carolina Companies Funded in Q4 2007
Company Name
Industry
Amount
Artus Labs, Inc.
Software
$
579,000
BlueStripe Software, Inc.
Software
$
5,000,000
Biotechnology
$
10,000,000
Semiconductors
$
11,365,200
Software
$
2,600,000
Media and Entertainment
$
3,000,000
Electronics/Instrumentation
$
16,500,000
Telecommunications
$
185,000,000
Medical Devices and Equipment
$
8,500,000
Semiconductors
$
7,500,000
Medical Devices and Equipment
$
11,500,000
Phase Bioscience, Inc.
Biotechmology
$
5,370,000
Piedmont Pharmaceuticals LLC
Biotechnology
$
8,500,000
Consumer Products and Services
$
20,000,000
Proventys, Inc.
Software
$
4,550,100
Rx Medic Systems, Inc.
Software
$
2,000,100
Cempra Pharmaceuticals, Inc.
Centice Corporation
Clinipace, Inc.
Inlet Technologies, Inc.
LED Lighting Fixtures, Inc.
Motricity
nContact Surgical, Inc.
Nitronex Corporation
Oriel Therapeutics, Inc.
Primo Water Corporation
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 48
North Carolina Companies Funded in Q4 2007
(continued)
Company Name
Industry
Rx Medic Systems, Inc.
Amount
Software
$
2,000,100
Medical Devices and Equipment
$
21,000,000
Transyme Pharma, Inc.
Biotechnology
$
19,999,900
Viamet Pharmaceuticals, Inc.
Biotechnology
$
1,025,000
Medical Devices and Equipment
$
3,000,000
Software
$
6,348,000
$
353,337,100
TransEntrix
VMI, LLC
XDS, Inc.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 49
VC Funds Active in North Carolina
BancAmerica Capital Investors
NC IDEA
BB&T Capital Partners
New Enterprise Associates
CapitalSouth Partners LLC
Noro-Moseley Partners
Carousel Capital Partners
Novak Biddle Venture Partners
Centura SBIC Inc.
Pappas Ventures
Chrysallis Ventures
Piedmont Angel Network
Core Capital
Polaris Venture Partners
Dogwood Equity
Quaker BioVentures
Frontier Capital LLC
River Cities Capital Funds
Golden Pine Ventures
SJF Ventures
Grotech Capital Group
Southern Capitol Ventures
Hatteras BioCapital
The Atlantis Group
H.I.G. Ventures
The Aurora Funds
Intel Capital
Trinity Ventures
Intersouth Partners
TriState Investment Group
Kodiak Venture Partners
Wachovia Capital Partners
Lovett Miller & Company, Inc.
Wakefield Group
WWC Capital Group
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 50
Entrepreneurs and Venture Capital On-Line Resource List
www.pwc.com - The PricewaterhouseCoopers Global website.
www.pwcmoneytree.com, www.nvca.org, www.venturexpert.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.nctechnology.org - North Carolina Technologies Association
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report
based on data from Thomson Financial
February 2008
Slide 51
For more information, contact:
Jeff Barber
or
Terry Bowling
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
February 2008
Slide 52