Q2 2009 Total
Q2 Update
July 2009
Shaking the MoneyTree™ PricewaterhouseCoopers/ 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
By Cindi Keith North Texas Technology Team Leader PricewaterhouseCoopers 214-754-5059 [email protected] @ p
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 2
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 tranches, note term sheets sheets, foreign VCs VCs, qualified private placement • Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc. • MoneyTree™ M T ™R Reportt iin it its 14th 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 Reuters
Q2 2009 Slide 3
National Data
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 4
National Venture Capital Investment Highlights for Q2 2009 •
National investments came in at $3.7 billion and 612 deals for Q2 2009. Deal volume in Q2 2009 increased compared with Q1 2009 which was $3.2 billion and 603 deals. The national investment number for Q2 2008 was $7.6 billion and 1,059 deals.
•
Sector investment included the following:
Biotechnology had the highest deal level of all industries at $888 million, representing a 54% increase from Q1 2009. Computer Software investments increased 1% from Q1 2009 to $644 million. Medical Devices & Equipment increased 39% from Q1 2009 to $628 million. Compared to Q1 2009, Industrial/Energy decreased 11% and Telecommunications saw a 13% decrease. IT Services experienced a 28% increase from Q1 2009. •
Stage of Development investing was as follows:
Later Stage investing was at $1.2 billion going into 207 deals, a decrease 20% from Q1 2009. Compared to Q1 2009, funding for Seed companies increased 155%, funding for Early Stage companies increased 44% and funding for Expansion Stage companies increased 19% in Q2 2009. PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 5
MoneyTree Total Investments: Q1 2001 – Q2 2009 ($ in billions)
$3.2 $3.7
$5.7
$6.3 $7.1 $6.6 $6.3
$6.3 $5.8 $5.8
$5..0
$4.4 $4.4
$4.0
$5 5.2 $6.1 $4.9 $5.8
$6.0
$4.2 $4.8 8 $4.7 7 $5.5 $
$6.6 $5.9
$8.1 $7.8
$8.0
Q1 Q2 Q3 Q4
$7.7 $7.6 $7.2
$10.0
$7.4 $7.4 $7.8 $8.0
$10.9
$12.0
$12.5
$14.0
$2.0 $0 0 $0.0 2001
2002
2001
#
2003
2002
2004
2003
2005
2004
2006 2005
2007 2006
2008
2009
2007
2008
2009
of Deals
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
1282 1214 1005 982 841 850 692 722 704 742 719 787 716 852 694 842 732 829 791 815 880 962 911 952 867 1051 1002 1064 1006 1059 980 884 603 612
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 6
MoneyTree Total Investments: 1980 – YTD 2009
Annual Venture Capital p Investments 1980 to YTD 2009
($ in billions)
$101.8
$120 $100
08 20
06 20
04
$6 6.9
$28.1
$30.6
$26.3
$22.9
$22.1
$19.3
$21.3
02 20
00 20
19
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$20.2
$14.4
98
$10.8
$7.6 $
96 19
$3..5
94 19
$3..4
$2. 1
92 19
$2. 6
$3..2
90 19
$3..2
$3..2
88 19
$2.9
$2. 7
86 19
$2.9
$2.8
84 19
$1.5 5
$1.1 1
82 19
19
80
$0
$0.5 5
$20
$4..0
$40
20
$60
$39.3
$52.0 $
$80
Q2 2009 Slide 7
Investments by Region: Q2 2009 Upstate NY $2.6 M 2 Deals
Northwest $126.7 M 35 Deals
3% of US total
Silicon Valley $1 176 7 M $1,176.7 174 Deals 32% of US total
4% of US total
NY Metro $276.2 M 54 Deals
North Central $100.7 M 15 Deals
Colorado $211.1 M
San Diego $172.2 M 22 Deals
Midwest $201.2 $201 2M 52 Deals
Philadelphia Metro $161.9 M 22 Deals 4% of US total
Southwest $157.9 M 18 Deals
South Central $5.8 M $ 7 Deals
4% of US total
0% of US total
Texas $74.1 M 23 Deals
5% of US total
8% of US total
5% of US total
16 Deals 6% of US total
LA/Orange County $159.0 M 30 Deals
13% of US total
0% % of US total
3% of US total
Sacramento/N. CA $7.3 M 4 Deals 0% of US total
New England $466.9 M 76 Deals
Southeast $282.3 M 34 Deals
DC/Metroplex $89 8 M $89.8 26 Deals 2% of US total
8% of US total
2% of US total KA U AI
AK/HI/PR $0 M 0 Deals
NIIHA U O AHU
MOLOKAI MA UI
LANAI
KAHOOLA
WE
HA W AII
0% of US total
Q2 2009 Total Investments - $3,674.4 million in 612 deals Unknown region totals omitted from the map
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 8
Investments by Region: Q2 2009 ($ in i millions illi ) $1,176.7 Silicon Valley
$466.9
New England
$276.2
NY Metro
$211.1
Colorado
$201.2
Midwest
Deals
% Change $ from Q1 ’09
Silicon Valley
174
-8%
New England
76
15%
Southeast
34
149%
NY Metro
54
-18%
Colorado
16
158%
Midwest
52
53%
$172.2
San Diego Philadelphia Metro
$161.9
LA/Orange County
$159.0 $157.9
SouthWest
$126.7
Northwest
$100.7
North Central
$89.8
DC/Metroplex
$74.1
Texas
$7.3
Sacramento/N.Cal
San Diego
22
90%
Philadelphia Metro
22
418%
LA/Orange County
30
-24%
SouthWest
18
280%
Northwest
35
-4%
North Central
15
66%
DC/Metroplex
26
13%
Texas
23
-58%
Sacramento/N.Cal
4
4%
South Central
7
-44%
$5.8
Upstate NY
2
57%
$2.6
AK/HI/PR
0
-100%
612
15%
South Central Upstate NY
Region
$282.3
Southeast
# of
Total AK/HI/PR $0
$100
$200
$300
$400
$500
$600
$700
$800
Q2 2009 Total: $3,674.4 million in 612 deals Unknown region totals omitted from the chart
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$900
$1,000
$1,100
$1,200
Q2 2009 Slide 9
Investments by Industry: Q2 2009 ($ in millions)
$888.1
Biotechnology
$644.1
Software
$628.4
Medical Devices and Equipment
$295.1
IT Services
$286.5
Industrial/Energy
$180.3
Networking and Equipment
$170.2
Semiconductors
$131.5
Computers and Peripherals
$115.8
Media and Entertainment
$94.9
Telecommunications
$ $84.6
Electronics/Instrumentation
$49.5
Business Products and Services
$43.5
Consumer Products and Services
$22.8
Healthcare Services
$17.7
Retailing/Distribution
$15.7
Financial Services
$0 $
$100 $
$200 $
$300 $
$400 $
$500 $
% Change $
Deals from Q1 ’09
Biotechnology
85
54.01%
Software
135
0.98%
Medical Devices and Equipment
75
38.80%
IT Services
44
28.22%
Industrial/Energy
53
-10.52%
Networking and Equipment
27
112.43%
Semiconductors
27
-5.15%
Computers and Peripherals
15
261.79%
Media and Entertainment
52
-47.92%
Telecommunications
26
-13.17%
Electronics/Instrumentation
14
205.71%
Business Products and Services
15
-18.77%
Consumer Products and Services
15
-30.32%
Healthcare Services
7
-42.94%
R t ili /Di t ib ti Retailing/Distribution
5
-37.41% 37 41%
Financial Services
11
-85.27%
Other
6
-64.24%
612
15.14%
TOTAL
$5.7
Other
# of
Industry
$600 $
$700 $
$800 $
$900 $
$1,000 $ ,
Q2 2009 Total: $3,674.4 million in 612 deals Visit www.pwcmoneytree.com for Industry definitions PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 10
Investments by Region – Quarterly Percent of Total U.S. Investments Top p U.S. Regions g Q2 ‘08– Q2 ‘09
32.03%
9.98% 39
35.93%
40%
38..74%
50%
40.34% 4
(% of Total Dollars)
5.75%
2.5 56%
2.87%
2.91%
2.4 47%
7.52%
10.54%
6.92%
7.36%
5.30%
7.68%
3.56% 3
4.86%
10%
3.44% 3
4.30% 4
12.71%
12.70%
13.58%
10.93%
20%
11.92%
30%
0%
Silicon Valley
New England Q2 '08
Q3 '08
Southeast Q4 '08
Q1 '09
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
NY Metro
Colorado
Q2 '09 Q2 2009 Slide 11
Investments by Industry – Quarterly Percent of Total U.S. Investments (% of Total Dollars)
Top p 5 Industries – Q2 ‘08 to Q2 ‘09
5%
7.80%
16.49%
% 17.65%
10.0 03%
8.03%
7.21%
4.71%
10%
6.00%
7.89%
15.51%
17.10%
14.19% 10.34%
12.89%
17.53% %
19 9.99%
18.75 5%
18.07% %
18.44 4%
18.82 2%
12.11%
15%
14.05%
20%
17.21%
25%
16.29%
24.17%
30%
0% Biotechnology
Software
Q2 '08
Medical Devices and Equipment Q3 '08
Q4 '08
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q1 '09
IT Services
Industrial/Energy
Q2 '09 Q2 2009 Slide 12
Investments by Stage of Development: Q2 2009 ($ in millions)
Later Stage
$1,155.2
Expansion p
$1,028.8
Stage of Development
Early y Stage g
$1,015.9 ,
Startup/Seed
$474.6
$0
$500
$1,000
Q2 2009 Total: $3674.4 million in 612 deals PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
% Change in $ Amount Deals from Q1 2009 # of
Later Stage
207
-19.62%
Expansion Stage
172
19.44%
Early Stage
183
43.83%
Startup/Seed
50
154.50%
Total
612
15.14%
$1,500
$2,000
Q2 2009 Slide 13
Investments by Sequence of Financing: Q2 2009 ($ in millions)
5th and Beyond
$1 149 8 $1,149.8
Second
$750.6
Financing
First
# of Deals
$678.2
Third
$553.5
Fourth
% Change in $ Amount from Q1 2009
5th and Beyond
182
-0.66%
Second
117
62.05%
First
141
9.03%
Third
98
22 56% 22.56%
Fourth
74
9.10%
Total
612
15.14%
$542.2
$0
$500
$1,000
Q2 2009 Total: $3,674.4 million in 612 deals PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$1,500
Q2 2009 Slide 14
Life Science Investments – Percent of Total U.S. Investments
Life Science Sectors – Q2 ’08 to Q2 ‘09 41.27%
(% of Total Dollars)
8.79% 28
17.10%
14..19%
10.34%
12.89 9%
24.17% 18.07%
1% 12.11
15%
18.44%
20%
14 .05%
25%
17.20%
30%
26.1 7%
35%
30.10%
40%
32.26%
45%
10% 5% 0% Biotechnology
Medical Devices and Equipment Q2 '08 08
Q3 '08 08
Q4 '08 08
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q1 '09 09
Life Sciences Q2 '09 09 Q2 2009 Slide 15
First Sequence Financing – Number of Deals First Sequence q Deals
149 141
254
329 333 3 286
364 3 329 360 3 263
331 318 295
275
234 252 258 284
251 223 256
19 95
200
177 185 5 184 4 218
183 3 187 7
226 237
234
300
275
324
400
384
500
100 0 2001
2002
2003
2004 Q1
2005 Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
2006
2007
2008
2009
Q4 Q2 2009 Slide 16
First Sequence Financing – Investment Amount First Sequence q Investments ($ in billions)
$0 0.6 $0.7 $
$1.2
2006
$1.7 $1.7 $1.6
2005
$1.6 1.8 $1 $2.0 $2.1
$1.4 $1.7 $1.6 $1.4
2003
$1.4 $1.5 $1.4 $1.4
2002
$1.0 $1.3 $1.2 $1.3
$0.8 $1.0 $1.1 $1.1
$1
$1.3 $1.2 $1.0 $0.8
$1.3 $1.2
$2
$2.0
$3
$2.8 8
$4
$0 2001
2004 Q1
Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q4
2007
2008
2009 Q2 2009 Slide 17
First Sequence Financing – Percent of Total U.S. Investments 60% 55% 50% 45% 40% 35% 30% 25% 20% 15%
34 9% 34.9% 32.6% 31.3% 32.0%30.4% 30.4%
34 9% 34.9%
32.1% 29.5% 27.9% 27.7% 27.2% 26.5% 25.9%25.1% 25.6% 24.9% 26.9% 22.1% 19.5%20.5% 18.2%18.0%
34 6% 34.6%
33.8%32.7% 31.4% 29.2% 28.7% 32.8%
31.0% 30.3%
34.4% 23.8% 28.4%
22.0% 24.3%24.4%
25.1% 25 1% 22.4% 21.6% 20.3%20.0%20.9% 20.2%
22.4%
22.1%
25.3% 26.1% 23.8% 23 8%
23.9% 23 9% 22.9% 23.9%
24.7% 23.0%
21.6% 22.3%
20.5% 19.5% 18.5%
10%
% of Total Dollars
Q2 2009
Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
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 Reuters
Q2 2009 Slide 18
Stage of Development – Quarterly Percent of Total First Sequence Dollars (% of first sequence dollars)
Stage g Development p – Q2 2008 to Q2 2009
4.5 52%
18.09% %
16.42%
% 19.22%
14.52%
22.36%
23 3.39%
21.9 90%
26.42%
27.85%
30.22%
38.37 7%
42 2.09%
6% 20.16
18.42% %
20%
17.62%
30%
19.59% %
40%
35.94%
50%
40.0 02%
42.90% 4
60%
10% 0% Startup/Seed
Early Stage Q2 '08
Q3 '08
Expansion Q4 '08
Q1 '09
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Later Stage
Q2 '09 Q2 2009 Slide 19
Stage of Development – Quarterly Percent of Total First Sequence Deals (% of first sequence deals)
Stage g Development p – Q2 2008 to Q2 2009
14.77%
11.81%
12.59%
7.80%
10%
10.51%
20.57 7%
16.11%
14.69%
17.12%
20%
17.32%
48.94%
43.62%
44.49%
22.70%
25.50%
26.38%
30%
26.43%
40%
31.47%
50%
41 1.26%
45.95%
60%
0% Startup/Seed
Early Stage Q2 '08
Q3 '08
Expansion Q4 '08
Q1 '09
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Later Stage
Q2 '09 Q2 2009 Slide 20
First Sequence Deals in Startup & Early Stage Companies 90% 72.4% 3000
74.2%
74.6%
76.7% 74.9% 71.6%
63.6%
63.3%
72.2% 72 2% 70.8% 70.4% 71.0% 70.3%
66.9%
80% 70%
2,497
60.5% 60%
2000
50%
1,765
40% 30% 20%
851
950
204
865
724
693
586
596
908
946
814
536 5
727
1000
Seq 1 Deals in Startup/Early Stage % of Total Seq 1 Deals PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
YT D 20 09
20 08
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
10%
Q2 2009 Slide 21
Median Deal Size vs. Mean Deal Size – Quarterly Total U.S. Investments
$10 $8.6 $7.6
$8
$7.0 $7.3 $ $6.5
$7.2
$6 6 $6.6
$7.1
$6.9
$7.8 $7.4
$6.9
$7.1
$7.2
$7.4
$7.0
$7.2
$7.5
$7.6 $7.1
$7.3
$6 7 $6.7
$6.4 $6.0
$6.0
$6
$5.3 $4.5 $3.8
$4
$3.4 $
$4.0
$4.2
$4.5
$4.5
$4.2
$4.5
$4.3 $3.9
$3.6
$4.2
$4.0
$4.1
$4.0
$4.2 $3.8
$3.5
$4.0
$4.0 $3.5
$3.5 $3.0 $2.5
$2.2
Median Deal Size
Q 2 2009
Q 1 2009
Q 4 2008
Q 3 2008
Q 2 2008
Q 1 2008
Q 4 2007
Q 3 2007
Q 2 2007
Q 1 2007
Q 4 2006
Q 3 2006
Q 2 2006
Q 1 2006
Q 4 2005
Q 3 2005
Q 2 2005
Q 1 2005
Q 4 2004
Q 3 2004
Q 2 2004
Q 1 2004
Q 4 2003
Q 3 2003
Q 2 2003
$0
Q 1 2003
$2
Mean Deal Size
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 22
Post-Money Valuations – Early Stage Companies Q1 2002 to Q1 2009 12 Month Average $40 $35 $30
$6.72
$9.22
$8.37
$9.04
$15.24
$15.07
$5.41
4 $6.64
$5.5 8
$5.07 7
$9.25
$0
$9.36
$5
14.45
$16.27
$10
15.01
14.8
14.61
14.43
$15
$5.36 6
$20
22.78
21.96
$7.71
23.24 $6.97
$25
Q1 02
Q1 03
Q1 04
Q1 05
Q1 06
Q1 07
Q1 08
Q1 09
Pre-money Valuation P t V l ti
Investment Amount
Source: Thomson Reuters
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 23
Post-Money Valuations – Expansion Stage Companies Q1 2002 to Q1 2009 12 Month Average $110 $100 $90 $80 $
$14.39
$47.89
$52.49
$55.52
$47.34
$42.67
$8.76
$10.93 3
$39.26
$0
$29.57
$10
51.43
$44.04
$30
61.62 $14.28
40.50
$40 $20
$13.13
50.35 $1 11.09
$50
$15.39
61.02
57.09 $13.05
$60
69.91
67.88
$70
Q1 02
Q1 03
Q1 04
Q1 05
Q1 06
Q1 07
Q1 08
Q1 09
Pre-money Valuation P t V l ti
Investment Amount
Source: Thomson Reuters
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 24
Post-Money Valuations – Later Stage Companies Q1 2002 to Q1 2009 12 Month Average
$150 107.53
$12.16
68.32
15.34 $1
$13.89 9
$14 .88
59.87
91.17
$64.39
$45.98
$53.94
$58.46
$83.36
$92.72
$57.97
$79.01
$1 0.35
73.8
68.82
$50
$0
$16.30
84.11 $19.72
$100
$14.81
99.66
Q1 02
Q1 03
Q1 04
Q1 05
Q1 06
Q1 07
Q1 08
Q1 09
Pre-money Valuation P t V l ti
Investment Amount
Source: Thomson Reuters
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 25
Q2 2009 – Most Active Venture Investors Venture Capital Firm
Location
Canaan Partners
Westport, Connecticut
18
Innovation Works, Inc.
Pittsburgh, Pennslyvania
17
Kleiner Perkins Caufield & Byers
Menlo Park, California
16
New Enterprise Associates
Baltimore, Maryland
16
Polaris Venture Partners
Waltham, Massachusetts
13
Duff Ackerman & Goodrich LLC
San Fransisco, California
11
First Round Capital
West Conshokocken, Pennslyvania
11
U.S. Venture Partners
Menlo Park, California
11
Draper Fisher Jurvetson
Menlo Park, California
10
Alta Partners
San Fransisco, Fransisco California
9
ARCH Venture Partners
Chicago, Illinois
9
Highland Capital Partners LLC
Lexington, Massachusetts
9
Novak Biddle Venture Partners, L.P.
Bethesda, Maryland
9
Venrock Associates
Palo Alto, California
9
OVP Venture Partners
Kirkland, Washington
8
Redpoint Ventures
Menlo Park, California
8
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Total Deals
Q2 2009 Slide 26
Q1 2009 Venture Capital Performance US Venture Capital p Index Returns for the Periods ending g 3/31/2009, 12/21/2008 and 3/31/2008
For the p period ending g
1st Qtr.
1 Year
3 Years
5 Years
10 Years
15 Years
20 Years
March 31, 2009
-2.9
-17.5
1.3
5.8
26.2
34.2
22.5
December 31, 2008
-12.5
-16.5
4.1
7.1
35.0
33.7
22.3
March 31, 2009
-1.8
11.7
14.1
11.6
32.8
32.9
21.8
Other indices at March 31, 2009 DIJA
-12.5
-35.9
-9.5
-3.6
-0.4
7.4
8.8
SDAQ Composite
-3.1
-32.9
-13.2
-5.2
-4.7
4.9
6.8
S&P 500
-11.0
-38.1
-13.1
-4.8
-3.0
5.9
7.4
Source: Cambridge S C b id A Associates i t LLC Note: Because the US Venture Capital index is cap weighted, the largest vintage years mainly drive the index’s performance.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 27
Analysis of Venture-Backed IPO and M&A Activity Total VentureBacked Offering Size ($M)
Average VentureBacked Offering Size ($M)
Number of Venture-backed M&A deals
Average M&A deal size**
Date
Number of IPOs*
2004
94
11 378 0 11,378.0
121 0 121.0
346
85 3 85.3
2005
57
4,485.0
78.7
350
105.8
2006
57
5,117.1
89.8
371
116.6
2007
86
10 326 3 10,326.3
120 1 120.1
375
176 5 176.5
2008 Q1
5
282.7
56.6
108
116.3
2008 Q2
0
0.0
0.0
84
126.7
2008 Q3
1
187 5 187.5
187 5 187.5
88
96 3 96.3
2008 Q4
0
0.0
0.0
62
140.4
2008
6
470.2
78.4
342
116.6
2009 Q1
0
0.0
0.0
62
47.0
2009 Q2
5
720.7
144.1
59
197.7
Source: Thomson Reuters and National Venture Capital Association * Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile **Only accounts for deals with disclosed values
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 28
Venture Capital Fundraising Year
First Time Funds
Follow-On Funds
Total Number of Funds
VC Raised ($M)
2004
55
156
211
19,156.0
2005
64
175
239
28,767.4
2006
56
185
241
31,925.0 ,
2007
62
189
251
36,064.9
2008
48
173
221
28,395.9
Q2 ’07
17
69
86
8,661.1
Q3 ’07
15
62
77
8,595.8
Q4 ’07
27
59
86
12,322.5
Q1 ’08
10
62
72
7,123.4
Q2 ’08
23
59
82
9,284.5
Q3 ’08
13
49
62
8,393.3
Q4 ’08
12
37
49
3,594.7
Q1 ’09
3
46
49
4,610.9
Q2 ’09
8
17
25
1,701.9
Quarter
Source: Thomson Reuters & National Venture Capital Association Data current as of July 13, 2009
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 29
Te as and DFW Data Texas Q2 2009
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 30
Texas/DFW Venture Capital Investment Highlights for Q2 2009 • Texas investment came in at $74 million and 23 deals for Q2 2009, which is $100 million
and 7 deals lower than Q1 2009. • DFW investment of $12 million and 6 deals comprised 16% of Texas investment in Q2
2009, while Austin was 60% ($45 million), and Houston was 15% ($11 million). • DFW investment of $12 million for Q2 2009 was $143 million lower than Q2 2008 with 9
fewer deals. DFW Q1 2009 investment was $112 million. • Top three DFW industries in Q1 2009 were 1.) Consumer Products and Services,
2.)) Industrial/Energy 2 Industrial/Energy, and 3 3.)) Media and Entertainment Entertainment, while the top three DFW industries in Q1 2009 were 1.) Industrial/Energy 2.) Business Products and Services, and 3.) Software. • When looking at stage of development development, funding for DFW decreased in all categories from
Q1 2009 to Q2 2009. Early Stage funding was $5.2 million (2 deals); Expansion Stage funding was $6.4 million (2 deals), and Later Stage funding was $0.4 million (2 deals). Startup/Seed Stage companies again received no funding in Q2 2009.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 31
National, Texas & DFW Investment in Q2 from 2005 to 2009 National Dollars # of Deals Texas Dollars # of Deals DFW Dollars # of Deals
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 $6.3B $6 3B 829
$7.1B $7 1B 962
$7.4B $7 4B 1,051
$7.6B $7 6B 1,059
$3.7B $3 7B 612
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 $264M $ 40
$400M $ 51
$284M $ 40
$281M $ 41
$74M $ 23
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 $95M 17
$132M 13
$125M 13
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$156M 15
$12M 6 Q2 2009 Slide 32
Texas Investment – Largest Individual Deals for Q2 2009
DFW 1 Company (Industrial/Energy)
$5M
Austin 3 Companies: (Networking and Equipment)
$15M
(C (Consumer P Products d t and dS Services) i )
$8M
(Computers and Peripherals)
$8M
Houston 1 Company (Networking and Equipment)
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$6M Q2 2009 Slide 33
Top 5 States by Investment in Q2 from 2005 to 2009
1. 2. 3 3. 4. 5.
Q2 2005
Q2 2006
Q2 2007
Q2 2008
CA, $3.1B MA, $624M NY $519M NY, NJ, $358M TX, $264M
CA, $3.2B MA, $683M TX $400M TX, WA, $375M PA, $339M
CA, $3.7B MA, $837M TX $284M TX, WA, $274M NY, $227M
CA, $4.0B MA, $693M NY $297M NY, TX, $281M WA, $265M
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 CA, MA, CO CO, NY, PA,
$1.5B $431M $211M $199M $127M
Q2 2009 Slide 34
DFW, Austin, Houston Investments in Q2 2009, Q1 2009 & Q2 2008 # of Deals
Investment Amount
DFW Q2 2009 Q1 2009 Q2 2008
6 11 15
$12M $112M $155M
Austin Q2 2009 Q1 2009
11 10
$45M $25M
Q2 2008
15
$66M
Houston H Q2 2009 Q1 2009 Q2 2008
4 9 10
$11M $37M $58M
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 35
Top DFW Investments by Industry in Q2 2009 (Dollars in Millions) $10 $9
$6 $ $5
$1.8
$4 $3 $2 $1
$0.1
$7
$4 4.9
$5.2 $
$8
$0
e um s n Co
t uc d ro rP
s&
es c i rv Se
ri st u d In
y rg e En al/
M
ia ed
&
i r ta e t En
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
nt e nm
e ar w ft So
Q2 2009 Slide 36
Major Texas Metropolitan Areas by Investment in Q2 from 2005 to 2009 $230 $
($ in millions)
$154 $
$11 $6
$12
$45 5
$ $66 $5 58 $9
$37 $6
$31
$50
$48 8 $23
$100
$95 $97
$150
$124 4 $114
$13 32
$200
$2
$250
$0
Q2 2005
DFW
Q2 2006
Q2 2007
Austin
Houston
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2008
Q2 2009
San Antonio/S. Texas Q2 2009 Slide 37
Total DFW Investments – Stage of Development in Q2 from 2005 to 2009 (Dollars in Millions)
$150
Early Stage
Q2 2005
Q2 2006
$0 $ Later Stage Q2 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2008
$0
$16 $15
$36 $6
Expansion Stage
$0
$0
$13
$25
$4 $ $12 $0 $0 $5 $
$50
46 $4 $27
$75
8 $38
$79
$76
$100
$82 $64
$125
Startup/Seed Q2 2009 Q2 2009 Slide 38
Total DFW Investments by Top 3 Industries in Q2 from 2005 to 2009 (Dollars in Millions)
$160 $140
$96 6
$120 $100
Consumer Products & Services Q2 2005
Industrial/Energy
Q2 2006
Q2 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$2
$16 $0
$13
$0
$0
$5
$0
$0
$0
$0
$20
$2
$40
$5
5 $35
$60
$23
$80
Media & Entertainment
Q2 2008
Q2 2009 Q2 2009 Slide 39
Top Texas Funds by Deals in Q2 2009 By Most Deals Fund Austin Ventures, L.P. Sevin Rosen Funds Hunt BioVentures Dell Ventures Sante Ventures
Location Austin, TX Dallas TX Dallas, Dallas, TX Round Rock, TX A stin TX Austin,
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
# of Deals 3 2 2 2 2
Q2 2009 Slide 40
Closing Thoughts & Comments
Cindi Keith North Texas Technology Leader 214-754-5059 [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.
P
w
C
July 2009
Shaking the MoneyTree™ PricewaterhouseCoopers/ 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
By Cindi Keith North Texas Technology Team Leader PricewaterhouseCoopers 214-754-5059 [email protected] @ p
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 2
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 tranches, note term sheets sheets, foreign VCs VCs, qualified private placement • Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc. • MoneyTree™ M T ™R Reportt iin it its 14th 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 Reuters
Q2 2009 Slide 3
National Data
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 4
National Venture Capital Investment Highlights for Q2 2009 •
National investments came in at $3.7 billion and 612 deals for Q2 2009. Deal volume in Q2 2009 increased compared with Q1 2009 which was $3.2 billion and 603 deals. The national investment number for Q2 2008 was $7.6 billion and 1,059 deals.
•
Sector investment included the following:
Biotechnology had the highest deal level of all industries at $888 million, representing a 54% increase from Q1 2009. Computer Software investments increased 1% from Q1 2009 to $644 million. Medical Devices & Equipment increased 39% from Q1 2009 to $628 million. Compared to Q1 2009, Industrial/Energy decreased 11% and Telecommunications saw a 13% decrease. IT Services experienced a 28% increase from Q1 2009. •
Stage of Development investing was as follows:
Later Stage investing was at $1.2 billion going into 207 deals, a decrease 20% from Q1 2009. Compared to Q1 2009, funding for Seed companies increased 155%, funding for Early Stage companies increased 44% and funding for Expansion Stage companies increased 19% in Q2 2009. PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 5
MoneyTree Total Investments: Q1 2001 – Q2 2009 ($ in billions)
$3.2 $3.7
$5.7
$6.3 $7.1 $6.6 $6.3
$6.3 $5.8 $5.8
$5..0
$4.4 $4.4
$4.0
$5 5.2 $6.1 $4.9 $5.8
$6.0
$4.2 $4.8 8 $4.7 7 $5.5 $
$6.6 $5.9
$8.1 $7.8
$8.0
Q1 Q2 Q3 Q4
$7.7 $7.6 $7.2
$10.0
$7.4 $7.4 $7.8 $8.0
$10.9
$12.0
$12.5
$14.0
$2.0 $0 0 $0.0 2001
2002
2001
#
2003
2002
2004
2003
2005
2004
2006 2005
2007 2006
2008
2009
2007
2008
2009
of Deals
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
1282 1214 1005 982 841 850 692 722 704 742 719 787 716 852 694 842 732 829 791 815 880 962 911 952 867 1051 1002 1064 1006 1059 980 884 603 612
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 6
MoneyTree Total Investments: 1980 – YTD 2009
Annual Venture Capital p Investments 1980 to YTD 2009
($ in billions)
$101.8
$120 $100
08 20
06 20
04
$6 6.9
$28.1
$30.6
$26.3
$22.9
$22.1
$19.3
$21.3
02 20
00 20
19
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$20.2
$14.4
98
$10.8
$7.6 $
96 19
$3..5
94 19
$3..4
$2. 1
92 19
$2. 6
$3..2
90 19
$3..2
$3..2
88 19
$2.9
$2. 7
86 19
$2.9
$2.8
84 19
$1.5 5
$1.1 1
82 19
19
80
$0
$0.5 5
$20
$4..0
$40
20
$60
$39.3
$52.0 $
$80
Q2 2009 Slide 7
Investments by Region: Q2 2009 Upstate NY $2.6 M 2 Deals
Northwest $126.7 M 35 Deals
3% of US total
Silicon Valley $1 176 7 M $1,176.7 174 Deals 32% of US total
4% of US total
NY Metro $276.2 M 54 Deals
North Central $100.7 M 15 Deals
Colorado $211.1 M
San Diego $172.2 M 22 Deals
Midwest $201.2 $201 2M 52 Deals
Philadelphia Metro $161.9 M 22 Deals 4% of US total
Southwest $157.9 M 18 Deals
South Central $5.8 M $ 7 Deals
4% of US total
0% of US total
Texas $74.1 M 23 Deals
5% of US total
8% of US total
5% of US total
16 Deals 6% of US total
LA/Orange County $159.0 M 30 Deals
13% of US total
0% % of US total
3% of US total
Sacramento/N. CA $7.3 M 4 Deals 0% of US total
New England $466.9 M 76 Deals
Southeast $282.3 M 34 Deals
DC/Metroplex $89 8 M $89.8 26 Deals 2% of US total
8% of US total
2% of US total KA U AI
AK/HI/PR $0 M 0 Deals
NIIHA U O AHU
MOLOKAI MA UI
LANAI
KAHOOLA
WE
HA W AII
0% of US total
Q2 2009 Total Investments - $3,674.4 million in 612 deals Unknown region totals omitted from the map
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 8
Investments by Region: Q2 2009 ($ in i millions illi ) $1,176.7 Silicon Valley
$466.9
New England
$276.2
NY Metro
$211.1
Colorado
$201.2
Midwest
Deals
% Change $ from Q1 ’09
Silicon Valley
174
-8%
New England
76
15%
Southeast
34
149%
NY Metro
54
-18%
Colorado
16
158%
Midwest
52
53%
$172.2
San Diego Philadelphia Metro
$161.9
LA/Orange County
$159.0 $157.9
SouthWest
$126.7
Northwest
$100.7
North Central
$89.8
DC/Metroplex
$74.1
Texas
$7.3
Sacramento/N.Cal
San Diego
22
90%
Philadelphia Metro
22
418%
LA/Orange County
30
-24%
SouthWest
18
280%
Northwest
35
-4%
North Central
15
66%
DC/Metroplex
26
13%
Texas
23
-58%
Sacramento/N.Cal
4
4%
South Central
7
-44%
$5.8
Upstate NY
2
57%
$2.6
AK/HI/PR
0
-100%
612
15%
South Central Upstate NY
Region
$282.3
Southeast
# of
Total AK/HI/PR $0
$100
$200
$300
$400
$500
$600
$700
$800
Q2 2009 Total: $3,674.4 million in 612 deals Unknown region totals omitted from the chart
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$900
$1,000
$1,100
$1,200
Q2 2009 Slide 9
Investments by Industry: Q2 2009 ($ in millions)
$888.1
Biotechnology
$644.1
Software
$628.4
Medical Devices and Equipment
$295.1
IT Services
$286.5
Industrial/Energy
$180.3
Networking and Equipment
$170.2
Semiconductors
$131.5
Computers and Peripherals
$115.8
Media and Entertainment
$94.9
Telecommunications
$ $84.6
Electronics/Instrumentation
$49.5
Business Products and Services
$43.5
Consumer Products and Services
$22.8
Healthcare Services
$17.7
Retailing/Distribution
$15.7
Financial Services
$0 $
$100 $
$200 $
$300 $
$400 $
$500 $
% Change $
Deals from Q1 ’09
Biotechnology
85
54.01%
Software
135
0.98%
Medical Devices and Equipment
75
38.80%
IT Services
44
28.22%
Industrial/Energy
53
-10.52%
Networking and Equipment
27
112.43%
Semiconductors
27
-5.15%
Computers and Peripherals
15
261.79%
Media and Entertainment
52
-47.92%
Telecommunications
26
-13.17%
Electronics/Instrumentation
14
205.71%
Business Products and Services
15
-18.77%
Consumer Products and Services
15
-30.32%
Healthcare Services
7
-42.94%
R t ili /Di t ib ti Retailing/Distribution
5
-37.41% 37 41%
Financial Services
11
-85.27%
Other
6
-64.24%
612
15.14%
TOTAL
$5.7
Other
# of
Industry
$600 $
$700 $
$800 $
$900 $
$1,000 $ ,
Q2 2009 Total: $3,674.4 million in 612 deals Visit www.pwcmoneytree.com for Industry definitions PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 10
Investments by Region – Quarterly Percent of Total U.S. Investments Top p U.S. Regions g Q2 ‘08– Q2 ‘09
32.03%
9.98% 39
35.93%
40%
38..74%
50%
40.34% 4
(% of Total Dollars)
5.75%
2.5 56%
2.87%
2.91%
2.4 47%
7.52%
10.54%
6.92%
7.36%
5.30%
7.68%
3.56% 3
4.86%
10%
3.44% 3
4.30% 4
12.71%
12.70%
13.58%
10.93%
20%
11.92%
30%
0%
Silicon Valley
New England Q2 '08
Q3 '08
Southeast Q4 '08
Q1 '09
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
NY Metro
Colorado
Q2 '09 Q2 2009 Slide 11
Investments by Industry – Quarterly Percent of Total U.S. Investments (% of Total Dollars)
Top p 5 Industries – Q2 ‘08 to Q2 ‘09
5%
7.80%
16.49%
% 17.65%
10.0 03%
8.03%
7.21%
4.71%
10%
6.00%
7.89%
15.51%
17.10%
14.19% 10.34%
12.89%
17.53% %
19 9.99%
18.75 5%
18.07% %
18.44 4%
18.82 2%
12.11%
15%
14.05%
20%
17.21%
25%
16.29%
24.17%
30%
0% Biotechnology
Software
Q2 '08
Medical Devices and Equipment Q3 '08
Q4 '08
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q1 '09
IT Services
Industrial/Energy
Q2 '09 Q2 2009 Slide 12
Investments by Stage of Development: Q2 2009 ($ in millions)
Later Stage
$1,155.2
Expansion p
$1,028.8
Stage of Development
Early y Stage g
$1,015.9 ,
Startup/Seed
$474.6
$0
$500
$1,000
Q2 2009 Total: $3674.4 million in 612 deals PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
% Change in $ Amount Deals from Q1 2009 # of
Later Stage
207
-19.62%
Expansion Stage
172
19.44%
Early Stage
183
43.83%
Startup/Seed
50
154.50%
Total
612
15.14%
$1,500
$2,000
Q2 2009 Slide 13
Investments by Sequence of Financing: Q2 2009 ($ in millions)
5th and Beyond
$1 149 8 $1,149.8
Second
$750.6
Financing
First
# of Deals
$678.2
Third
$553.5
Fourth
% Change in $ Amount from Q1 2009
5th and Beyond
182
-0.66%
Second
117
62.05%
First
141
9.03%
Third
98
22 56% 22.56%
Fourth
74
9.10%
Total
612
15.14%
$542.2
$0
$500
$1,000
Q2 2009 Total: $3,674.4 million in 612 deals PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$1,500
Q2 2009 Slide 14
Life Science Investments – Percent of Total U.S. Investments
Life Science Sectors – Q2 ’08 to Q2 ‘09 41.27%
(% of Total Dollars)
8.79% 28
17.10%
14..19%
10.34%
12.89 9%
24.17% 18.07%
1% 12.11
15%
18.44%
20%
14 .05%
25%
17.20%
30%
26.1 7%
35%
30.10%
40%
32.26%
45%
10% 5% 0% Biotechnology
Medical Devices and Equipment Q2 '08 08
Q3 '08 08
Q4 '08 08
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q1 '09 09
Life Sciences Q2 '09 09 Q2 2009 Slide 15
First Sequence Financing – Number of Deals First Sequence q Deals
149 141
254
329 333 3 286
364 3 329 360 3 263
331 318 295
275
234 252 258 284
251 223 256
19 95
200
177 185 5 184 4 218
183 3 187 7
226 237
234
300
275
324
400
384
500
100 0 2001
2002
2003
2004 Q1
2005 Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
2006
2007
2008
2009
Q4 Q2 2009 Slide 16
First Sequence Financing – Investment Amount First Sequence q Investments ($ in billions)
$0 0.6 $0.7 $
$1.2
2006
$1.7 $1.7 $1.6
2005
$1.6 1.8 $1 $2.0 $2.1
$1.4 $1.7 $1.6 $1.4
2003
$1.4 $1.5 $1.4 $1.4
2002
$1.0 $1.3 $1.2 $1.3
$0.8 $1.0 $1.1 $1.1
$1
$1.3 $1.2 $1.0 $0.8
$1.3 $1.2
$2
$2.0
$3
$2.8 8
$4
$0 2001
2004 Q1
Q2
Q3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q4
2007
2008
2009 Q2 2009 Slide 17
First Sequence Financing – Percent of Total U.S. Investments 60% 55% 50% 45% 40% 35% 30% 25% 20% 15%
34 9% 34.9% 32.6% 31.3% 32.0%30.4% 30.4%
34 9% 34.9%
32.1% 29.5% 27.9% 27.7% 27.2% 26.5% 25.9%25.1% 25.6% 24.9% 26.9% 22.1% 19.5%20.5% 18.2%18.0%
34 6% 34.6%
33.8%32.7% 31.4% 29.2% 28.7% 32.8%
31.0% 30.3%
34.4% 23.8% 28.4%
22.0% 24.3%24.4%
25.1% 25 1% 22.4% 21.6% 20.3%20.0%20.9% 20.2%
22.4%
22.1%
25.3% 26.1% 23.8% 23 8%
23.9% 23 9% 22.9% 23.9%
24.7% 23.0%
21.6% 22.3%
20.5% 19.5% 18.5%
10%
% of Total Dollars
Q2 2009
Q1 2009
Q4 2008
Q3 2008
Q2 2008
Q1 2008
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 Reuters
Q2 2009 Slide 18
Stage of Development – Quarterly Percent of Total First Sequence Dollars (% of first sequence dollars)
Stage g Development p – Q2 2008 to Q2 2009
4.5 52%
18.09% %
16.42%
% 19.22%
14.52%
22.36%
23 3.39%
21.9 90%
26.42%
27.85%
30.22%
38.37 7%
42 2.09%
6% 20.16
18.42% %
20%
17.62%
30%
19.59% %
40%
35.94%
50%
40.0 02%
42.90% 4
60%
10% 0% Startup/Seed
Early Stage Q2 '08
Q3 '08
Expansion Q4 '08
Q1 '09
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Later Stage
Q2 '09 Q2 2009 Slide 19
Stage of Development – Quarterly Percent of Total First Sequence Deals (% of first sequence deals)
Stage g Development p – Q2 2008 to Q2 2009
14.77%
11.81%
12.59%
7.80%
10%
10.51%
20.57 7%
16.11%
14.69%
17.12%
20%
17.32%
48.94%
43.62%
44.49%
22.70%
25.50%
26.38%
30%
26.43%
40%
31.47%
50%
41 1.26%
45.95%
60%
0% Startup/Seed
Early Stage Q2 '08
Q3 '08
Expansion Q4 '08
Q1 '09
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Later Stage
Q2 '09 Q2 2009 Slide 20
First Sequence Deals in Startup & Early Stage Companies 90% 72.4% 3000
74.2%
74.6%
76.7% 74.9% 71.6%
63.6%
63.3%
72.2% 72 2% 70.8% 70.4% 71.0% 70.3%
66.9%
80% 70%
2,497
60.5% 60%
2000
50%
1,765
40% 30% 20%
851
950
204
865
724
693
586
596
908
946
814
536 5
727
1000
Seq 1 Deals in Startup/Early Stage % of Total Seq 1 Deals PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
YT D 20 09
20 08
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
10%
Q2 2009 Slide 21
Median Deal Size vs. Mean Deal Size – Quarterly Total U.S. Investments
$10 $8.6 $7.6
$8
$7.0 $7.3 $ $6.5
$7.2
$6 6 $6.6
$7.1
$6.9
$7.8 $7.4
$6.9
$7.1
$7.2
$7.4
$7.0
$7.2
$7.5
$7.6 $7.1
$7.3
$6 7 $6.7
$6.4 $6.0
$6.0
$6
$5.3 $4.5 $3.8
$4
$3.4 $
$4.0
$4.2
$4.5
$4.5
$4.2
$4.5
$4.3 $3.9
$3.6
$4.2
$4.0
$4.1
$4.0
$4.2 $3.8
$3.5
$4.0
$4.0 $3.5
$3.5 $3.0 $2.5
$2.2
Median Deal Size
Q 2 2009
Q 1 2009
Q 4 2008
Q 3 2008
Q 2 2008
Q 1 2008
Q 4 2007
Q 3 2007
Q 2 2007
Q 1 2007
Q 4 2006
Q 3 2006
Q 2 2006
Q 1 2006
Q 4 2005
Q 3 2005
Q 2 2005
Q 1 2005
Q 4 2004
Q 3 2004
Q 2 2004
Q 1 2004
Q 4 2003
Q 3 2003
Q 2 2003
$0
Q 1 2003
$2
Mean Deal Size
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 22
Post-Money Valuations – Early Stage Companies Q1 2002 to Q1 2009 12 Month Average $40 $35 $30
$6.72
$9.22
$8.37
$9.04
$15.24
$15.07
$5.41
4 $6.64
$5.5 8
$5.07 7
$9.25
$0
$9.36
$5
14.45
$16.27
$10
15.01
14.8
14.61
14.43
$15
$5.36 6
$20
22.78
21.96
$7.71
23.24 $6.97
$25
Q1 02
Q1 03
Q1 04
Q1 05
Q1 06
Q1 07
Q1 08
Q1 09
Pre-money Valuation P t V l ti
Investment Amount
Source: Thomson Reuters
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 23
Post-Money Valuations – Expansion Stage Companies Q1 2002 to Q1 2009 12 Month Average $110 $100 $90 $80 $
$14.39
$47.89
$52.49
$55.52
$47.34
$42.67
$8.76
$10.93 3
$39.26
$0
$29.57
$10
51.43
$44.04
$30
61.62 $14.28
40.50
$40 $20
$13.13
50.35 $1 11.09
$50
$15.39
61.02
57.09 $13.05
$60
69.91
67.88
$70
Q1 02
Q1 03
Q1 04
Q1 05
Q1 06
Q1 07
Q1 08
Q1 09
Pre-money Valuation P t V l ti
Investment Amount
Source: Thomson Reuters
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 24
Post-Money Valuations – Later Stage Companies Q1 2002 to Q1 2009 12 Month Average
$150 107.53
$12.16
68.32
15.34 $1
$13.89 9
$14 .88
59.87
91.17
$64.39
$45.98
$53.94
$58.46
$83.36
$92.72
$57.97
$79.01
$1 0.35
73.8
68.82
$50
$0
$16.30
84.11 $19.72
$100
$14.81
99.66
Q1 02
Q1 03
Q1 04
Q1 05
Q1 06
Q1 07
Q1 08
Q1 09
Pre-money Valuation P t V l ti
Investment Amount
Source: Thomson Reuters
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 25
Q2 2009 – Most Active Venture Investors Venture Capital Firm
Location
Canaan Partners
Westport, Connecticut
18
Innovation Works, Inc.
Pittsburgh, Pennslyvania
17
Kleiner Perkins Caufield & Byers
Menlo Park, California
16
New Enterprise Associates
Baltimore, Maryland
16
Polaris Venture Partners
Waltham, Massachusetts
13
Duff Ackerman & Goodrich LLC
San Fransisco, California
11
First Round Capital
West Conshokocken, Pennslyvania
11
U.S. Venture Partners
Menlo Park, California
11
Draper Fisher Jurvetson
Menlo Park, California
10
Alta Partners
San Fransisco, Fransisco California
9
ARCH Venture Partners
Chicago, Illinois
9
Highland Capital Partners LLC
Lexington, Massachusetts
9
Novak Biddle Venture Partners, L.P.
Bethesda, Maryland
9
Venrock Associates
Palo Alto, California
9
OVP Venture Partners
Kirkland, Washington
8
Redpoint Ventures
Menlo Park, California
8
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Total Deals
Q2 2009 Slide 26
Q1 2009 Venture Capital Performance US Venture Capital p Index Returns for the Periods ending g 3/31/2009, 12/21/2008 and 3/31/2008
For the p period ending g
1st Qtr.
1 Year
3 Years
5 Years
10 Years
15 Years
20 Years
March 31, 2009
-2.9
-17.5
1.3
5.8
26.2
34.2
22.5
December 31, 2008
-12.5
-16.5
4.1
7.1
35.0
33.7
22.3
March 31, 2009
-1.8
11.7
14.1
11.6
32.8
32.9
21.8
Other indices at March 31, 2009 DIJA
-12.5
-35.9
-9.5
-3.6
-0.4
7.4
8.8
SDAQ Composite
-3.1
-32.9
-13.2
-5.2
-4.7
4.9
6.8
S&P 500
-11.0
-38.1
-13.1
-4.8
-3.0
5.9
7.4
Source: Cambridge S C b id A Associates i t LLC Note: Because the US Venture Capital index is cap weighted, the largest vintage years mainly drive the index’s performance.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 27
Analysis of Venture-Backed IPO and M&A Activity Total VentureBacked Offering Size ($M)
Average VentureBacked Offering Size ($M)
Number of Venture-backed M&A deals
Average M&A deal size**
Date
Number of IPOs*
2004
94
11 378 0 11,378.0
121 0 121.0
346
85 3 85.3
2005
57
4,485.0
78.7
350
105.8
2006
57
5,117.1
89.8
371
116.6
2007
86
10 326 3 10,326.3
120 1 120.1
375
176 5 176.5
2008 Q1
5
282.7
56.6
108
116.3
2008 Q2
0
0.0
0.0
84
126.7
2008 Q3
1
187 5 187.5
187 5 187.5
88
96 3 96.3
2008 Q4
0
0.0
0.0
62
140.4
2008
6
470.2
78.4
342
116.6
2009 Q1
0
0.0
0.0
62
47.0
2009 Q2
5
720.7
144.1
59
197.7
Source: Thomson Reuters and National Venture Capital Association * Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile **Only accounts for deals with disclosed values
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 28
Venture Capital Fundraising Year
First Time Funds
Follow-On Funds
Total Number of Funds
VC Raised ($M)
2004
55
156
211
19,156.0
2005
64
175
239
28,767.4
2006
56
185
241
31,925.0 ,
2007
62
189
251
36,064.9
2008
48
173
221
28,395.9
Q2 ’07
17
69
86
8,661.1
Q3 ’07
15
62
77
8,595.8
Q4 ’07
27
59
86
12,322.5
Q1 ’08
10
62
72
7,123.4
Q2 ’08
23
59
82
9,284.5
Q3 ’08
13
49
62
8,393.3
Q4 ’08
12
37
49
3,594.7
Q1 ’09
3
46
49
4,610.9
Q2 ’09
8
17
25
1,701.9
Quarter
Source: Thomson Reuters & National Venture Capital Association Data current as of July 13, 2009
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 29
Te as and DFW Data Texas Q2 2009
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 30
Texas/DFW Venture Capital Investment Highlights for Q2 2009 • Texas investment came in at $74 million and 23 deals for Q2 2009, which is $100 million
and 7 deals lower than Q1 2009. • DFW investment of $12 million and 6 deals comprised 16% of Texas investment in Q2
2009, while Austin was 60% ($45 million), and Houston was 15% ($11 million). • DFW investment of $12 million for Q2 2009 was $143 million lower than Q2 2008 with 9
fewer deals. DFW Q1 2009 investment was $112 million. • Top three DFW industries in Q1 2009 were 1.) Consumer Products and Services,
2.)) Industrial/Energy 2 Industrial/Energy, and 3 3.)) Media and Entertainment Entertainment, while the top three DFW industries in Q1 2009 were 1.) Industrial/Energy 2.) Business Products and Services, and 3.) Software. • When looking at stage of development development, funding for DFW decreased in all categories from
Q1 2009 to Q2 2009. Early Stage funding was $5.2 million (2 deals); Expansion Stage funding was $6.4 million (2 deals), and Later Stage funding was $0.4 million (2 deals). Startup/Seed Stage companies again received no funding in Q2 2009.
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 31
National, Texas & DFW Investment in Q2 from 2005 to 2009 National Dollars # of Deals Texas Dollars # of Deals DFW Dollars # of Deals
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 $6.3B $6 3B 829
$7.1B $7 1B 962
$7.4B $7 4B 1,051
$7.6B $7 6B 1,059
$3.7B $3 7B 612
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 $264M $ 40
$400M $ 51
$284M $ 40
$281M $ 41
$74M $ 23
Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 $95M 17
$132M 13
$125M 13
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$156M 15
$12M 6 Q2 2009 Slide 32
Texas Investment – Largest Individual Deals for Q2 2009
DFW 1 Company (Industrial/Energy)
$5M
Austin 3 Companies: (Networking and Equipment)
$15M
(C (Consumer P Products d t and dS Services) i )
$8M
(Computers and Peripherals)
$8M
Houston 1 Company (Networking and Equipment)
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$6M Q2 2009 Slide 33
Top 5 States by Investment in Q2 from 2005 to 2009
1. 2. 3 3. 4. 5.
Q2 2005
Q2 2006
Q2 2007
Q2 2008
CA, $3.1B MA, $624M NY $519M NY, NJ, $358M TX, $264M
CA, $3.2B MA, $683M TX $400M TX, WA, $375M PA, $339M
CA, $3.7B MA, $837M TX $284M TX, WA, $274M NY, $227M
CA, $4.0B MA, $693M NY $297M NY, TX, $281M WA, $265M
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 CA, MA, CO CO, NY, PA,
$1.5B $431M $211M $199M $127M
Q2 2009 Slide 34
DFW, Austin, Houston Investments in Q2 2009, Q1 2009 & Q2 2008 # of Deals
Investment Amount
DFW Q2 2009 Q1 2009 Q2 2008
6 11 15
$12M $112M $155M
Austin Q2 2009 Q1 2009
11 10
$45M $25M
Q2 2008
15
$66M
Houston H Q2 2009 Q1 2009 Q2 2008
4 9 10
$11M $37M $58M
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2009 Slide 35
Top DFW Investments by Industry in Q2 2009 (Dollars in Millions) $10 $9
$6 $ $5
$1.8
$4 $3 $2 $1
$0.1
$7
$4 4.9
$5.2 $
$8
$0
e um s n Co
t uc d ro rP
s&
es c i rv Se
ri st u d In
y rg e En al/
M
ia ed
&
i r ta e t En
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
nt e nm
e ar w ft So
Q2 2009 Slide 36
Major Texas Metropolitan Areas by Investment in Q2 from 2005 to 2009 $230 $
($ in millions)
$154 $
$11 $6
$12
$45 5
$ $66 $5 58 $9
$37 $6
$31
$50
$48 8 $23
$100
$95 $97
$150
$124 4 $114
$13 32
$200
$2
$250
$0
Q2 2005
DFW
Q2 2006
Q2 2007
Austin
Houston
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2008
Q2 2009
San Antonio/S. Texas Q2 2009 Slide 37
Total DFW Investments – Stage of Development in Q2 from 2005 to 2009 (Dollars in Millions)
$150
Early Stage
Q2 2005
Q2 2006
$0 $ Later Stage Q2 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
Q2 2008
$0
$16 $15
$36 $6
Expansion Stage
$0
$0
$13
$25
$4 $ $12 $0 $0 $5 $
$50
46 $4 $27
$75
8 $38
$79
$76
$100
$82 $64
$125
Startup/Seed Q2 2009 Q2 2009 Slide 38
Total DFW Investments by Top 3 Industries in Q2 from 2005 to 2009 (Dollars in Millions)
$160 $140
$96 6
$120 $100
Consumer Products & Services Q2 2005
Industrial/Energy
Q2 2006
Q2 2007
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
$2
$16 $0
$13
$0
$0
$5
$0
$0
$0
$0
$20
$2
$40
$5
5 $35
$60
$23
$80
Media & Entertainment
Q2 2008
Q2 2009 Q2 2009 Slide 39
Top Texas Funds by Deals in Q2 2009 By Most Deals Fund Austin Ventures, L.P. Sevin Rosen Funds Hunt BioVentures Dell Ventures Sante Ventures
Location Austin, TX Dallas TX Dallas, Dallas, TX Round Rock, TX A stin TX Austin,
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Reuters
# of Deals 3 2 2 2 2
Q2 2009 Slide 40
Closing Thoughts & Comments
Cindi Keith North Texas Technology Leader 214-754-5059 [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.
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