shaking the money tree q4, 2010, presented by owen davis

Shaking the MoneyTreeTM

Q4/Full Year 2010 Update

www.pwc.com

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

PwC

PricewaterhouseCoopers/National Venture Capital Association MoneyTreeTM report based on data from Thomson Reuters

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

2

Presented by: Owen Davis, Partner

Leader, CT Private Equity & Venture Capital

PwC

PricewaterhouseCoopers - Connecticut

• Provide audit, tax and advisory services

• Offices: Hartford and Stamford

• Over 700 professionals based in Connecticut

• Serving most industries, including:

• Cleantech

• Computers & Networking

• Entertainment & Media

• Information & Communications

• Internet

• Healthcare & Life Sciences

• Private Equity and Venture Capital

• Semiconductors

• Software

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PwC

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, note 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

4PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters

PwC

U.S. MoneyTree total investments: Q1 2002 – Q4 2010

5

#

of

Deals

2002 2003 2004 2005 2006 2007 2008 2009 2010

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

853 868 701 735 716 745 731 798 724 866 701 854 739 837 794 831 883 978 924 969 875 1,067

1,017

1,076

1,027

1,072

1,005

921 637 710 716 864 763 960 789 765

$6.4

$4.1

$5.2

$5.0

$6.3

$7.1

$7.8

$3.4

$5.0

$5.8

$4.7

$6.0

$6.1

$6.9 $7

.2 $7.4

$4.3

$6.9

$4.3 $4

.6 $4.8

$5.7

$6.6

$7.8

$7.1

$5.2

$4.9

$4.2

$5.4 $5

.8

$5.7 $6

.1

$7.8

$5.9

$5.4

$5.0

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

$7.0

$8.0

$9.0

2002 2003 2004 2005 2006 2007 2008 2009 2010

Q1 Q2 Q3 Q4

($ in billions)


PwC

MoneyTree total investments

6

Annual Venture Capital Investments 1981 to 2010


PwC

Investments by region: Q4 2010

7

Region # of Deals

% Change $ from Q3’ 10

Silicon Valley 231 9%

New England 88 2%

NY Metro 83 50%

Midwest 62 46%

LA/Orange County 48 33%

Colorado 24 190%

San Diego 26 -13%

Southeast 33 -28%

Northwest 33 -17%

DC/Metroplex 23 -45%

Texas 34 -65%

Philadelphia Metro 30 -43%

North Central 14 -53%

South Central 18 645%

SouthWest 8 -57%

Upstate NY 4 -58%

AK/HI/PR 0 N/A

Sacramento/N.Cal 0 N/A

Total 765 1%

Q4 2010 Total Investments - $5,017.0 million in 765 deals


Unknown region totals not included

PwC

Investments by region: Full year 2010

8

Region # of Deals

% Change $ from 2009

Silicon Valley 961 16%

New England 387 15%

NY Metro 350 26%

LA/Orange County 205 66%

Midwest 245 52%

Southeast 187 12%

Texas 143 30%

San Diego 115 -10%

DC/Metroplex 136 39%

Northwest 156 11%

Colorado 77 1%

Philadelphia Metro 118 -1%

North Central 50 -15%

SouthWest 58 -2%

South Central 42 232%

Upstate NY 23 359%

Sacramento/N.Cal 8 88%

AK/HI/PR 6 117%

Total 3,277 19%

2010 Total Investments - $21,823.4 million in 3,277 deals


Unknown region totals not included

PwC

Investments by region – Quarterly percent of total U.S. investments

9

Top U.S. regions Q4 2009– Q4 2010


PwC

Investments by industry: Q4 2010

10

Region # of Deals

% Change in $ from Q3’

10

Software 218 16%

Industrial/Energy 72 104%

Biotechnology 94 -24%

Media and Entertainment 70 126%

IT Services 65 -10%

Medical Devices & Equipment 71 -31%

Computers and Peripherals 20 63%

Networking and Equipment 13 14%

Consumer Products & Services 27 20%

Telecommunications 29 -65%

Semiconductors 23 -47%

Electronics/Instrumentation 11 -2%

Business Products & Services 16 5%

Financial Services 12 -20%

Healthcare Services 9 -58%

Retailing/Distribution 5 -56%

Other 10 11%

Total 765 1%

Q4 2010 Total Investments - $5,017.0 million in 765 deals


Visit www.pwcmoneytree.com for Industry definitions

PwC

Investments by industry: Full year 2010

11




Region # of Deals

% Change in $ from 2009

Software 835 20%

Biotechnology 460 3%

Industrial/Energy 277 39%

Medical Devices and Equipment

324 -9%

IT Services 272 44%


Semiconductors 124 20%

Telecommunications 136 77%

Networking and Equipment 64 -18%

Consumer Products and Services

104 46%

Financial Services 70 42%

Computers and Peripherals 70 33%

Business Products and Services 90 71%

Electronics/Instrumentation 65 25%

Healthcare Services 42 100%

Retailing/Distribution 26 22%

Other 26 185%

Total 3,277 19%

PwC

Investments by industry – Quarterly percent of total U.S. investments

12

(% of Total Dollars)

Top 5 Industries – Q4 2009 to Q4 2010


PwC

Connecticut Investments1998 – 2010 ($ in millions)

Year Deals DollarsAverageDeal Size

2010 52 $200.1 $3.8

2009 39 $157.4 $4.0

2008 36 $118.7 $3.3

2007 34 $277.0 $8.1

2006 31 $249.6 $8.1

2005 30 $185.1 $6.2

2004 32 $194.9 $6.1

2003 34 $233.9 $6.9

2002 37 $176.7 $4.8

2001 69 $535.8 $7.8

2000 115 $1,498.8 $13.0

1999 91 $946.9 $10.4

1998 74 $373.4 $5.0

13January 2011PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters

PwC

Investments by industry: Q4 2010 – CT

14

Industry # of Deals

% Change in $ from Q3’

10



Media and Entertainment 2 100%Medical Devices and Equipment 1 2394%

IT Services 1 81%

Software 2 -86%

Telecommunications 1 100%

Grand Total 9 -63%

Q4 2010 Total Investments - $12.5 million in 9 deals



PwC

Investments by industry: Full Year 2010 – CT

15

Industry # of Deals

% Change in $ from 2009



Software 12 634%

Retailing/Distribution 1 100%Medical Devices and Equipment 6 51%


IT Services 3 -17%

Industrial/Energy 2 -31%

Telecommunications 2 -61%

Semiconductors 1 100%Business Products and Services 1 -100%

Networking and Equipment 1 0%

Grand Total 52 27%

Q4 2010 Total Investments - $200.1 million in 52 deals



PwC

Investments by stage of development: Full year 2010 & 2009

16

$1,712.4

$5,303.7

$6,314.7

$8,492.6

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000

Seed Stage

Early Stage

Later Stage

Expansion

($ in millions)

Stage of Development

# of Deals

% Change in $ Amount from

2009

Expansion 1,021 47%

Later Stage 746 2%

Early Stage 1,147 15%

Seed Stage 363 -2%

Grand Total 3,277 19%



PwC

Investments by stage of development: Full year 2010 & 2009 CT

17


Stage of Development

# of Deals % Change in S Amount from 2009

Expansion 12 583%

Later Stage 10 49%

Startup/Seed 16 -50%

Early Stage 14 -67%

Grand Total 52 27%

($ millions)

2010 Total Investments - $200.1 million in 52 deals

2010 2009

PwC

Top 10 Connecticut Investments - 2010

Name City Industry Stage Amount

Pierpont Securities LLC Stamford Financial Services Expansion $ 84,999,900

SmartEquip, Inc. Norwalk Software Later $ 18,000,000

Cara Therapeutics, Inc. Shelton Biotechnology Later $ 15,000,000

Ion Torrent Systems, Inc. Guilford Biotechnology Expansion $ 10,000,000

Kolitan Pharmaceuticals, Inc.

New Haven Biotechnology Startup/Seed $ 10,000,000

Preferred Brands International

Stamford Retailing/Distribution

Later $ 7,500,000

VLS Securities LLC Canaan Financial Services Startup/Seed $ 6,145,000

CyVek, Inc. Wallingford Biotechnology Startup/Seed $ 4,013,000

Mira Dx, Inc. New Haven Biotechnology Startup/Seed $ 4,000,000

Ikonisys, Inc. New Haven Biotechnology Later $ 3,804,900

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PwC

Median deal size vs. mean deal size – Quarterly total U.S. investments


($ in millions)

PwC

2010 – Most active venture investors

20

Venture Capital Firm Location Total Deals

Kleiner Perkins Caufield & Byers Menlo Park, California 76

First Round Capital West Conshohocken, Pennsylvania 69

New Enterprise Associates, Inc. Menlo Park, California 67

Draper Fisher Jurvetson Menlo Park, California 58

North Bridge Venture Partners San Mateo, California 55

Polaris Venture Partners Waltham, Massachusetts 53

Sequoia Capital Menlo Park, California 47

Venrock Associates Palo Alto, California 46

Canaan Partners Westport, Connecticut 42

Domain Associates LLC Princeton, New Jersey 39

Accel Partners Palo Alto, California 38

Menlo Ventures Menlo Park, California 38

U.S. Venture Partners Menlo Park, California 38

Austin Ventures, L.P. Austin, Texas 37

Intel Capital Santa Clara, California 36

Rho Capital Partners, Inc. New York, New York 36


PwC

Analysis of venture-backed IPO and M&A activity

21

Date Number of IPOs*

Total Offer Amount ($M) Average IPO Offer

Amount ($M)

Total M&A Deals Average M&A deal size ($M)**

2005 57 4,482.4 78.6 350 106.3

2006 57 5,117.1 89.8 378 114.6

2007 86 10,326.3 120.1 380 174.9

2008 6 470.2 78.4 348 116.6

2009 Q1 0 0.0 0.0 65 44.4

2009 Q2 5 720.7 144.1 65 197.7

2009 Q3 3 572.1 190.7 69 60.5

2009 Q4 4 349.3 87.3 74 217.7

2009 12 1,642.1 136.8 273 147.3

2010 Q1 9 936.3 104.0 122 180.2

2010 Q2 17 1,274.9 75.0 99 131.4

2010 Q3 14 1,249.1 89.2 111 134.1

2010 Q4 32 3,557.3 111.2 88 157.7

2010 72 7,017.5 97.5 420 152.6

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

PwC

Venture capital fundraising

22

Source: Thomson Reuters & National Venture Capital AssociationData current as of January 17, 2011

Year First Time Funds Follow-On Funds Total Number of Funds VC Raised ($M)

2005 54 180 234 30,759.6

2006 63 172 235 31,860.9

2007 71 166 237 31,205.0

2008 64 149 213 26,412.2

2009 43 107 150 16,314.9

2010 52 105 157 12,304.2

Quarter

Q4 ’08 17 32 49 2,807.9

Q1 ’09 10 47 57 4,942.5

Q2 ’09 14 25 39 4,995.2

Q3 ’09 13 19 32 2,310.3

Q4 ’09 14 33 47 4,066.9

Q1 ’10 16 30 46 4,007.0

Q2 ’10 19 33 52 2,130.3

Q3 ’10 18 31 49 3,177.1

Q4 ’10 11 24 35 2,989.9

PwC

Closing thoughts & comments


© 2010 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 legal entity.

Name: Owen Davis

Title: Partner

Phone: (203) 539-5645

Email: [email protected]

shaking the money tree q4, 2010, presented by owen davis

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