February 2008
PricewaterhouseCoopers/ National Venture PricewaterhouseCoopers/ National Venture Capital Association MoneyTree™ ReportCapital Association MoneyTree™ Reportbased on data from Thomson Financialbased on data from Thomson Financial
Shaking the MoneyTree™™
Q4/Full-Year 2007 UpdateFebruary 2008
Raleigh, NCRaleigh, NCFebruary 2008February 2008
February 2008Slide 2
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
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
February 2008Slide 3
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Speaker Bios
February 2008Slide 4
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
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.
February 2008Slide 5
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
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.
February 2008Slide 6
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
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.
February 2008Slide 7
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
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
February 2008Slide 8
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
The National Picture
Historical Trends
February 2008Slide 9
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
MoneyTree Total Investments: Q1 1999 – Q4 2007
($ in billions)
$6.6
$28.
4
$12.
8
$6.9
$4.3 $5
.3
$5.1 $6
.4 $7.5
$11.
0
$28.
2
$11.
4
$6.0
$5.0 $6
.3
$6.3 $7.0
$7.3
$13.
1
$26.
4
$8.3
$4.6
$4.9
$5.0 $5
.9 $6.8 $7
.6
$23.
3
$22.
1
$8.1
$4.5 $5
.6
$6.0
$5.8
$6.3 $7.0
$0.0
$8.0
$16.0
$24.0
$32.0
1999 2000 2001 2002 2003 2004 2005 2006 2007
#
of
Deals
1999 2000 2001 2002 2003 2004 2005 2006 2007
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
918 1304 1420 1865 2130 2109 1930 1742 1284 1219 1000 975 887 848 688 719 691 736 712 783 712 847 685 838 724 820 785 809 868 944 900 918 858 1018 974 963
February 2008Slide 10
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
MoneyTree Total Investments: 1980 – 2007
($ in billions)
$0.6
$1.2
$1.6
$3.0
$3.0
$2.8
$3.0
$3.3
$3.3
$3.3
$2.8
$2.2
$3.6
$3.7
$4.1 $8
.0 $11.
3
$14.
9
$21.
1
$54.
1
$105
.1
$40.
6
$22.
0
$19.
7
$22.
5
$23.
0
$26.
6
$29.
4
$0
$20
$40
$60
$80
$100
$120
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Annual Venture Capital Investments 1980 to 2007
February 2008Slide 11
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
HA W AI I
M AUI
KAHO O L AW E
L ANAI
M O L O KAI
O AHU
KAU AI
NI I HAU
Investments by Region: Q4 2007
Texas$426.6
45 Deals
Silicon Valley$2,399.3
301 Deals
New England$860.7
111 Deals
Midwest$243.8
62 Deals
South Central$58.9
9 Deals
Northwest$438.2
54 DealsSacramento/N. CA
$48.9 7 Deals
San Diego$423.8
32 Deals
Southeast$479.4
55 Deals
Southwest$49.8
17 Deals
LA/Orange County$253.9
46 Deals
DC/Metroplex$403.9
71 Deals
NY Metro$471.0
70 Deals
Philadelphia Metro$107.7
21 Deals
North Central$159.2
28 Deals
Q4 2007 Total Investments - $7,011 in 963 Deals
Colorado$102.4
20 Deals
AK/HI/PR$8.9
2 Deals
Upstate NY$74.7
12 Deals
February 2008Slide 12
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Investments by Region: Q4 2007($ in millions)
$8.9
$48.9
$102.4
$107.7
$159.2
$243.8
$253.9
$403.9
$423.8
$426.6
$438.2
$471.0
$479.4
$860.7
$49.8
$58.9
$74.7
$2,399.3
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000
AK/HI/PR
Sacramento/N.Cal
SouthWest
South Central
Upstate NY
Colorado
Philadelphia Metro
North Central
Midwest
LA/Orange County
DC/Metroplex
San Diego
Texas
Northwest
NY Metro
Southeast
New England
Silicon Valley
Region# of
Deals
% Change $
from Q3 ‘07
Silicon Valley 301 -9.29%
New England 111 -11.34%
DC/Metroplex 71 14.95%
NY Metro 70 4.20%
Midwest 62 -37.65%
Southeast 55 22.29%
Northwest 54 21.16%
LA/Orange County 46 -39.89%
Texas 45 8.52%
San Diego 32 3.05%
North Central 28 40.77%
Philadelphia Metro 21 -61.32%
Colorado 20 -50.16%
SouthWest 17 -67.88%
Upstate NY 12 185.64%
South Central 9 226.59%
Sacramento/N.Cal 7 237.49%
AK/HI/PRl 2 118.82%
Total 963 -7.82%
Q4 2007 Total: $7,011 in 963 Deals
February 2008Slide 13
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
HA W AI I
M AUI
KAHO O L AW E
L ANAI
M O L O KAI
O AHU
KAU AI
NI I HAU
Investments by Region: Full Year 2007
Texas$1,416.5
166 Deals
Silicon Valley$10,066.5
1,184 Deals
New England$3,695.3
478 Deals
Midwest$1,298.3
236 Deals
South Central$92.5
27 Deals
Northwest$1,636.4
216 DealsSacramento/N. CA
$99.9 16 Deals
San Diego$1,988.8
159 Deals
Southeast$1,856.4
243 Deals
Southwest$540.9
90 Deals
LA/Orange County$1,647.8
205 Deals
DC/Metroplex$1,241.8
207 Deals
NY Metro$1,715.5
254 Deals
Philadelphia Metro$861.5
125 Deals
North Central$525.6
80 Deals
2007 Total Investments - $29.4B in 3,813 Deals
Colorado$564.2
86 Deals
AK/HI/PR$20.5 9 Deals
Upstate NY$137.4
32 Deals
February 2008Slide 14
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Investments by Region: Full Year 2007($ in millions)
$20.5
$92.5
$540.9
$564.2
$861.5
$1,241.8
$1,298.3
$1,416.5
$1,636.4
$1,647.8
$1,715.5
$1,856.4
$1,988.8
$3,695.3
$99.9
$137.4
$525.6
$10,066.5
$0 $3,000 $6,000 $9,000 $12,000
AK/HI/PR
South Central
Sacramento/N.Cal
Upstate NY
North Central
SouthWest
Colorado
Philadelphia Metro
DC/Metroplex
Midwest
Texas
Northwest
LA/Orange County
NY Metro
Southeast
San Diego
New England
Silicon Valley
Region# of
Deals
% Change $
from 2006
Silicon Valley 1,184 5.65%
New England 478 18.56%
NY Metro 254 -14.20%
Southeast 243 46.42%
Midwest 236 32.82%
Northwest 216 37.04%
DC/Metroplex 207 8.43%
LA/Orange County 205 -14.52%
Texas 166 -2.28%
San Diego 159 52.27%
Philadelphia Metro 125 12.64%
SouthWest 90 7.79%
Colorado 86 -14.61%
North Central 80 31.15%
Upstate NY 32 -11.84%
South Central 27 17.15%
Sacramento/N.Cal 16 254.63%
AK/HI/PR 9 -56.26%
Total 3,813 10.75%
2007 Total: $29.4B in 3,813 Deals
February 2008Slide 15
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Q4 2007 Top 10 States Garnering Venture FundsQ4 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
10.New Jersey 19 $ 137,133,500
February 2008Slide 16
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Full-Year 2007 Top 10 States Garnering Venture FundsFull-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
10.Florida 63 $ 608,338,400
February 2008Slide 17
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Investments by Industry: Full Year 2007($ in millions)
$11.8
$368.1
$579.6
$655.9
$840.0
$1,252.1
$1,297.6
$1,848.0
$1,877.4
$2,143.1
$2,696.3
$3,897.7
$5,215.5
$5,273.0
$415.3
$468.2
$566.1
$0 $2,000 $4,000 $6,000
Other
Healthcare Services
Retailing/Distribution
Consumer Products and Services
Financial Services
Computers and Peripherals
Electronics/Instrumentation
Business Products and Services
Networking and Equipment
IT Services
Semiconductors
Media and Entertainment
Telecommunications
Industrial/Energy
Medical Devices and Equipment
Biotechnology
Software
Industry# of
Deals
% Change $
from 2006
Software 905 2.72%
Biotechnology 477 9.51%
Medical Devices and Equipment 385 39.55%
Media and Entertainment 340 10.31%
Telecommunications 290 -17.37%
Industrial/Energy 286 44.15%
Semiconductors 210 -13.77%
IT Services 202 19.40%
Business Products and Services 129 34.19%
Networking and Equipment 124 17.49%
Consumer Products and Services 102 -6.36%
Electronics/Instrumentation 91 -4.86%
Financial Services 88 29.38%
Computers and Peripherals 66 16.62%
Retailing/Distribution 58 91.38%
Healthcare Services 49 -13.48%
Other 11 57.33%
TOTAL 3813 10.75%
2007 Total: $29.4B in 3,813 DealsVisit www.pwcmoneytree.com for Industry definitions
February 2008Slide 18
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Investments by Industry – Quarterly Percent of Total U.S. Investments
Top 5 Industries – Q4 ‘06 to Q4 ‘07
(% of Total Dollars)
19.6
9%
6.08
%
10.6
4%
7.83
%
19.7
2%
20.3
7%
7.31
%
14.3
4%
5.07
%
16.8
9%
17.1
0%
7.57
%
14.4
8%
6.34
%
20.8
2%
15.1
9%
12.4
7%
11.3
8%
7.42
%
16.0
0%18.3
5%
9.24
%
12.8
5%
6.29
%
18.1
3%
0%
5%
10%
15%
20%
25%
30%
Biotechnology Industrial/Energy Medical Devices andEquipment
Semiconductors Software
Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07
February 2008Slide 19
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Life Science Investments – Percent of Total U.S. Investments*
(% of Total Dollars)
19
.69
%
10
.64
%
30
.33
%
20
.37
%
14
.34
%
34
.71
%
17
.10
%
14
.48
%
31
.58
%
15
.19
%
11
.38
%
26
.57
%
18.3
5%
12.8
5%
31.1
9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Biotechnology Medical Devices and Equipment Life Sciences
Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07
Life Science Sectors – Q4 ’06 to Q4 ‘07
February 2008Slide 20
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Investments by Stage of Development: Full Year 2007
($ in millions)
$1,153.3
$5,192.2
$10,845.2
$12,215.0
$0 $3,000 $6,000 $9,000 $12,000 $15,000
Startup/Seed
Early Stage
Expansion
Later Stage
Stage of Development
# of
Deals
% Change in $ Amount from 2006
Expansion Stage 1,235 -5.65%
Later Stage 1,168 24.68%
Early Stage 995 26.58%
Startup/Seed 415 -0.28%
Total 3,813 10.75%
2007 Totals: $29.4B in 3,813 Deals
February 2008Slide 21
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Investments by Sequence of Financing: Full Year 2007
($ in millions)
$4,024.9
$4,371.1
$8,710.4
$7,229.6
$5,069.7
$0 $5,000 $10,000
Fourth
Third
Second
First
5th and Beyond
Financing# of
Deals
% Change in
$ Amount from
2006
First 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%
2007 Totals: $29.4B in 3,813 Deals
February 2008Slide 22
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
First Sequence Financing – Investment Amount
($ in billions)
$8
.8
$2
.9
$1
.3
$0
.7 $1
.1 $1
.4
$1
.4 $1
.7$2
.0
$1
.2
$1
.0
$1
.3
$1
.5
$1
.6
$1
.7
$6
.2
$1
.3
$1
.0
$1
.1
$1
.2
$1
.4
$1
.7
$1
.9
$5
.4
$1
.3
$0
.8 $1
.1
$1
.3
$1
.4
$1
.4 $1
.9
$8
.4
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2000 2001 2002 2003 2004 2005 2006 2007
Q1 Q2 Q3 Q4
First Sequence Investments
February 2008Slide 23
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Stage of Development – Quarterly Percent of Total First Sequence Dollars
(% of first sequence dollars)
51.3
6%
25.9
6%
8.09
%
10.0
0%
38.7
1%
35.3
9%
15.9
1%
9.34
%
50.6
9%
30.4
9%
9.48
%
12.5
4%
34.1
9%
37.5
3%
38.1
1%
32.6
9%
9.94
%14.5
9%
15.7
4%19.2
6%
0%
10%
20%
30%
40%
50%
60%
70%
Startup/Seed Early Stage Expansion Later Stage
Q4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07
Stage Development – Q4 2006 to Q4 2007
February 2008Slide 24
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
First Sequence Deals in Startup & Early Stage Companies
728 81
3 946
1,75
9
905
604
581 69
1
539 70
7
2,50
1
840 89
4
28.3%
22.5% 23.1% 23.4%22.4%
19.9%19.5%
20.2%
31.6%31.9%
25.8%
29.3%
25.9%
0
1000
2000
3000
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
0%
5%
10%
15%
20%
25%
30%
35%
40%
Seq 1 Deals in Startup/Early Stage% of Total US Deals
February 2008Slide 25
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
First Sequence Financing –Percent of Total U.S. Investments
20.2%22.2%
17.9% 17.4%
19.9%21.9%
20.4% 19.9% 20.3%
25.1%
21.4%
28.0%
23.6% 24.0% 24.9%
21.1%23.0%
24.1%22.8% 22.7%
23.8% 24.7%
27.3%
28.3%26.7% 26.0%
24.9% 24.9% 25.4%27.7% 27.1%
29.4%
32.3%30.8%
31.9%29.9%
32.1%
34.7%
30.4%
33.6% 34.6%
30.6% 29.8%
34.6%32.4%
35.6%
19.3%
26.9%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
Q1
2002
Q2
2002
Q3
2002
Q4
2002
Q1
2003
Q2
2003
Q3
2003
Q4
2003
Q1
2004
Q2
2004
Q3
2004
Q4
2004
Q1
2005
Q2
2005
Q3
2005
Q4
2005
Q1
2006
Q2
2006
Q3
2006
Q4
2006
Q1
2007
Q2
2007
Q3
2007
Q4
2007
% of Total Dollars % of Total Deals
February 2008Slide 26
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Median Deal Size vs. Mean Deal Size –Quarterly Total U.S. Investments
$4.5$4.0 $4.0
$3.2$3.6
$4.0 $4.0$4.5
$5.0$4.6 $4.5
$4.8$4.3 $4.5
$4.0
$4.8$4.5
$4.0 $4.0 $4.0$4.5 $4.3
$4.0 $4.0
$8.3
$7.1$6.6
$6.3
$7.4 $7.4 $7.2$7.7 $7.5
$7.1$7.6
$6.8
$8.7
$7.2
$7.8$7.3
$6.8
$6.2
$6.8$7.2 $7.1 $7.0
$7.4 $7.4
$0
$2
$4
$6
$8
$10
Q1
2002
Q2
2002
Q3
2002
Q4
2002
Q1
2003
Q2
2003
Q3
2003
Q4
2003
Q1
2004
Q2
2004
Q3
2004
Q4
2004
Q1
2005
Q2
2005
Q3
2005
Q4
2005
Q1
2006
Q2
2006
Q3
2006
Q4
2006
Q1
2007
Q2
2007
Q3
2007
Q4
2007
Median Deal Size Mean Deal Size
In Millions ($)
February 2008Slide 27
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Post-Money Valuations – Early Stage Companies Q3 2000 to Q3 2007
$25.
2
$21.
6
$10.
5
$8.5
$10.
5
$8.6
$6.8
$13.
9
35.07
30.98
15.9413.74
16.5314.52
12.83
21.54
$9
.9
$9
.4
$6
.0$5
.4
$5
.3 $6
.0
$6
.1
$7
.6
$0
$5
$10
$15
$20
$25
$30
$35
$40
Q3 00 Q3 01 Q3 02 Q3 03 Q3 04 Q3 05 Q3 06 Q3 07
Pre-money Valuation Investment AmountPost-money Valuation
12 Month Average
February 2008Slide 28
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Post-Money Valuations – Expansion Stage Companies Q3 2000 to Q3 2007
$82.
3
$60.
2
$39.
1
$29.
5
$45.
1
$46.
3
$50.
3
$47.
6
103.47
76.52
52.38
40.13
57.67 60.365.54
59.92
$2
1.2
$1
6.3
$1
4.0
$1
3.2
$1
0.7
$1
2.6 $1
5.3
$1
2.3
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
$110
Q3 00 Q3 01 Q3 02 Q3 03 Q3 04 Q3 05 Q3 06 Q3 07
Pre-money Valuation Investment AmountPost-money Valuation
12 Month Average
February 2008Slide 29
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Post-Money Valuations – Later Stage Companies Q3 2000 to Q3 2007
$139
.1
$92.
6
$51.
7
$53.
3
$52.
5
$68.
2
$99.
0
$82.
6
168.5
116.26
68.74 67.58 68.87
83.96
113.34
96.04
$2
9.4
$2
3.7
$1
5.7
$1
7.0
$1
4.3
$1
6.4
$1
4.4
$1
3.5
$0
$50
$100
$150
Q3 00 Q3 01 Q3 02 Q3 03 Q3 04 Q3 05 Q3 06 Q3 07
Pre-money Valuation Investment AmountPost-money Valuation
12 Month Average
February 2008Slide 30
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Full Year 2007 – Most Active Venture Investors
Venture Capital Firm Location Total Deals
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
February 2008Slide 31
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Thomson FinancialU.S. Private Equity Performance Index (PEPI)
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
(Investment Horizon Performance as of 9/30/2007)
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 $678 billion. Sources are financial documents and schedules from Limited Partner investors and General Partners. All returns are calculated by Thomson Financial from the underlying financial cashflows. Returns are net to investor after management fees and carried interest.
February 2008Slide 32
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Analysis of Venture-Backed IPO and M&A Activity
Date # of IPOs*
Total Venture-Backed Offer Size ($M)
Average Venture-Backed Offer Size ($M)
Number of Venture-backed M&A deals
Average M&A deal size**
2003 29 2,022.7 69.8 291 62.8
2004 93 11,014.9 118.4 339 83.0
2005 56 4,461.0 79.7 347 95.8
2006 Q1 10 540.8 54.1 105 111.2
2006 Q2 19 2,011.0 105.8 104 100.9
2006 Q3 8 934.2 116.8 93 92.7
2006 Q4 20 1,631.1 81.6 61 154.7
2006 57 5,117.1 89.8 363 110.6
2007 Q1 18 2,190.6 121.7 82 156.6
2007 Q2 25 4,146.8 165.9 82 114.0
2007 Q3 12 945.2 78.8 95 206.0
2007 Q4 31 3,043.8 98.2 45 228.4
2007 86 10,326.3 120.1 304 175.9* Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile**Only accounts for deals with disclosed valuesSource: Thomson Financial/ National Venture Capital Association
February 2008Slide 33
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Venture Capital Fundraising*
Year First Time Funds
Follow-On Funds
Total FundsVC Raised
($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
Quarter
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 11016.2Source: Thomson Financial/National Venture Capital Association *These figures take into account the subtractive effect of downsized funds Date current as of 1/14/08
February 2008
North Carolina Picture
Historical Trends
Slide 34PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008
2000 2001 2002 2003 2004
# of Deals
2005 2006 2007
$408
$617
$498
$303
$225
$133$158
$353
$144
$56
$123
$163
$97$108$136
$93$119
$83$102
$29
$97
$175$129
$83$56
$82
$226
$114$119$93
$141
$153
$0
$100
$200
$300
$400
$500
$600
$700
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
42 37 28 14 2041 34 32 22 22 14 20 23 22 20 14 9 15 17 13 18 1115 11 20 19
($ in millions)
16 15 1817 15
MoneyTree Total North Carolina InvestmentsMoneyTree Total North Carolina Investments2000 – 20072000 – 2007
21
Slide 35PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008
$433
$812
$1,826
$553 $510$338$356$584
1.7%
1.4%
1.8%1.9%
3.0%
1.5%
1.9%
2.5%
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2000 2001 2002 2003 2004 2005 2006 2007
0%
1%
2%
3%
Total NC Investments NC % of U.S. Total Amount# of Deals
154 90 85 77 56 7153 70
MoneyTree Total North Carolina Investments – MoneyTree Total North Carolina Investments – 2000 – 20072000 – 2007($ in millions)
Slide 36PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008
85
70
56
77
90
156
53
71
1.9%
1.9%
1.8% 1.7%
2.8%2.0% 2.6%
2.0%
$0
$20
$40
$60
$80
$100
$120
$140
$160
2000 2001 2002 2003 2004 2005 2006 2007
0%
1%
2%
3%
Total # NC Deals NC % of U.S. Total DealsAmountInvested
(in millions)
$1,826 $584 $553 $358 $338 $812$433 $510
MoneyTree Total North Carolina Deals– MoneyTree Total North Carolina Deals– 2000 – 20072000 – 2007
($ in millions)
Slide 37PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008Slide 38
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
North Carolina Investments by MSA2000 - 2007($ in millions)
$662
.7
$90.
2
$46.
7
$34.
6 $88.
4
$16.
6
$122
.7
$7.5
$10.
5
$46.
1
$21.
2
$36.
5
$21.
4
$19.
7
$58.
5
$483
.3
$455
.8
$285
.7
$212
.7
$369
.7
$362
.5
$744
.0
$105
.2
$0.0
$4.8
$17.
0
$0.0 $2
5.6
$5.5
$2.0$5
8.1
$1,0
00.2
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2000 2001 2002 2003 2004 2005 2006 2007
Charlotte/Gastonia Greensboro/Winston-Salem Raleigh/Durham/Chapel Hill Other
February 2008Slide 39
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
North Carolina Investment % by MSA2000 - 2007
36%
15%
8% 10%
26%
4%
24%
1%2%
8% 6%
11%
5% 4%
7%
83%
82%
80%
63%
85%
71%
92%
6%
0%
5%
0%
6%
1%
0%3%
55%
1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004 2005 2006 2007
Charlotte/Gastonia Greensboro/Winston-Salem Raleigh/Durham/Chapel Hill Other
February 2008
$8.0
$20.0
$23.0
$23.5
$27.6
$30.0
$33.0
$42.8
$237.2
$99.0
$254.8
$0 $40 $80 $120 $160 $200 $240 $280
Other
Networking & Equipment
Consumer Products & Svcs
Industrial/Energy
Semiconductors
Electronics/Instrumentation
Business Products & Svcs
Media & Entertainment
Software
Medical Devices & Equipment
Biotechnology
Telecommunications
Total Deals2007
% Change in $ Amount from
2006($ in millions)
25
4
Total North Carolina Investments by Industry –Total North Carolina Investments by Industry –Full-Year 2007Full-Year 2007
2007 Total: $812.0
8
1
4
3$13.0
1
1
5
13
2
4
120.2%
13.1%
41.3%
900.0%
(18.3%)
394.0%
(65.6%)
10.1%
242.7%
47.7%
75.1%
152%
Slide 40PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008
Total North Carolina Amount
$812.0 million
Total U.S. Amount $29.4 billion
18%
9%
18%6%
13%
6%
7%
23%
Software$5.3
Industrial/Energy
$2.7
Others$6.4
Telecom$2.1
Medical Devices & Equipment
$3.9Media &
Entertainment$1.9
5%
4%
29%
11%
4%
12%
4%32%
Medical Devices & Equipment
$99.0
3%
Others$87.6
Electronics & Instrumentation$27.6
Biotechnology$237.2
Business Products & Services
$30.0
Telecommunications$254.8
(in billions)(in millions)
Biotechnology$5.2
Total North Carolina vs. U.S. Investments by Industry – Full-Year 2007Total North Carolina vs. U.S. Investments by Industry – Full-Year 2007
Software$42.7
Semiconductors$1.8
Slide 41PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Media & Entertainment
$33.0
February 2008
$237
$227
$140$121 $120 $108
$161
$181
12.4%
3.3%4.1%5.3% 5.0% 4.7%
2.8% 2.3%
33.9% 41.1%
21.1%
29.2%
35.6%
41.7%
24.1%
$0
$50
$100
$150
$200
$250
2000 2001 2002 2003 2004 2005 2006 2007
0%
10%
20%
30%
40%
50%
Total # NC Deals % of Total U.S. Investment in Biotech % of Total NC Investments
($ in millions)
Biotechnology Investments in NC vs. U.S.Biotechnology Investments in NC vs. U.S.2000 – 20072000 – 2007
21 17 17 17 18 2514 16
# of Deals
4.8%
Slide 42PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008
$82
$29
$58$43
$154
$323
$23
17.8%
0.6%1.1% 0.5%1.6%1.3% 1.5% 1.0%
14.9%
5.7%
17.2%
5.4%
12.4%
7.4%
26.4%
$0
$50
$100
$150
$200
$250
$300
$350
2000 2001 2002 2003 2004 2005 2006 2007
0%
10%
20%
30%
Total # NC Deals % of Total U.S. Investment in Software % of Total NC Investments
($ in millions)
Software Investments in NC vs. U.S.Software Investments in NC vs. U.S.2000 – 20072000 – 2007
36 25 24 22 19 138 12# of Deals
0.5%$42
Slide 43PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008
Average Deal Size – NC vs. U.S.Average Deal Size – NC vs. U.S.2000 – 20072000 – 2007
$7.3 $7.7
$13.3
$9.1
$7.1$6.8 $7.3 $7.3
$11.9
$6.5 $6.5
$4.7
$6.0
$8.2$7.3
$11.4
$0
$5
$10
$15
2000 2001 2002 2003 2004 2005 2006 2007
U.S. Average Deal Size NC Average Deal Size
($ in millions)
Slide 44PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
February 2008Slide 45
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
6th Sense Analytics, Inc. Software $
5,000,000
AlphaVax, Inc.Biotechnology $ 12,650,000
Chimerix, Inc.Biotechnology $ 23,099,900
HyperBranch Medical Technology, Inc. Medical Devices & Equipment $
2,000,000
INI Power Systems, Inc. Electronics/Instrumentation $
883,000
InnerPulse, Inc.Medical Devices & Equipment $ 50,000,500
Liquidia Technologies, Inc. Industrial/Energy $
15,999,900
Motricity Telecommunications $ 50,000,000
Nextreme Thermal Solutions, Inc. Electronics/Instrumentation $
5,292,000
Phase Bioscience, Inc. Biotechnology $
1,250,100
Regado Biosciences, Inc. Biotechnology $
23,000,200
rPath, Inc. Software $ 1,749,900
Serenex, Inc.Biotechnology $ 13,999,800
StrikeIron, Inc.IT Services $ 5,000,000
Tranzyme Pharma, Inc. Biotechnology $
11,000,000
Unit Dose Solutions, Inc. Biotechnology $
2,500,000
XDS, Inc. IT Services $ 2,274,000
$
225,699,300
North Carolina Companies Funded in Q1 2007North Carolina Companies Funded in Q1 2007
Company Name AmountIndustry
February 2008Slide 46
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Biolex, Inc.Biotechnology $ 29,999,600
Brightdoor Systems, Inc. Software $
2,000,000
Cetero ResearchBiotechnology $ 15,448,000
ChannelAdvisor Corporation Business Products and Services $
29,999,900
CoLucid Pharmaceuticals, Inc. Biotechnology $
8,250,000
Datacraft Solutions, Inc. Software $
4,000,000
Digitalsmiths Corporation Computers and Peripherals $
6,000,000
iContact Corporation Software $
5,350,000
INI Power Systems, Inc. Electronics/Instrumentation $
4,000,000
Integrated Oncology Solutions, Inc. Biotechnology $
500,000
Micell Technologies, Inc. Industrial/Energy $
5,555,000
NephroGenex, Inc. Biotechnology $
3,314,100
Nomacorc LLCIndustrial/Energy $ undisclosed
RadarFind Corporation 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
Visitar, Inc.Software $ 1,330,000
$
135,846,400
North Carolina Companies Funded in Q2 2007North Carolina Companies Funded in Q2 2007
Company Name AmountIndustry
February 2008Slide 47
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Aerie Pharmaceuticals, Inc. Biotechnology $
10,000,000
Aldagen, Inc.Biotechnology $ 9,000,000
Batanga.comMedia and Entertainment $ 30,000,000
Cempra Pharmaceuticals Biotechnology $
8,297,000
CeNeRx BioPharma, Inc. Biotechnology $
2,027,000
Hatteras Networks, Inc. Networking and Equipment $
8,000,000
Hyperbranch Medical Technology, Inc. Medical Devices & Equipment $
undisclosed
Immaculate Baking Company Retailing/Distribution $
2,044,000
M3 Technology Group Telecommunications $
7,499,000
Micell Technologies, Inc. Industrial/Energy $
1,500,000
NCSRT, Inc.Electroinics/Instrumentation $ 1,000,000
Overture Networks, Inc. Telecommunications $
12,272,200
Semprius, Inc.Semiconductors $ 550,000
Viamet Pharmaceuticals Biotechnology $
1,200,000
CONFIDENTIAL Biotechnology $
3,750,000
$
97,139,200
North Carolina Companies Funded in Q3 2007North Carolina Companies Funded in Q3 2007
Company Name AmountIndustry
February 2008Slide 48
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Artus Labs, Inc. Software $
579,000
BlueStripe Software, Inc. Software $
5,000,000
Cempra Pharmaceuticals, Inc. Biotechnology $
10,000,000
Centice Corporation Semiconductors $
11,365,200
Clinipace, Inc.Software $ 2,600,000
Inlet Technologies, Inc. Media and Entertainment $
3,000,000
LED Lighting Fixtures, Inc. Electronics/Instrumentation $
16,500,000
Motricity Telecommunications $
185,000,000
nContact Surgical, Inc. Medical Devices and Equipment $
8,500,000
Nitronex Corporation Semiconductors $
7,500,000
Oriel Therapeutics, Inc. Medical Devices and Equipment $
11,500,000
Phase Bioscience, Inc. Biotechmology $
5,370,000
Piedmont Pharmaceuticals LLC Biotechnology $
8,500,000
Primo Water Corporation Consumer Products and Services $
20,000,000
Proventys, Inc.Software $ 4,550,100
Rx Medic Systems, Inc. Software $
2,000,100
North Carolina Companies Funded in Q4 2007North Carolina Companies Funded in Q4 2007
Company Name AmountIndustry
February 2008Slide 49
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Rx Medic Systems, Inc. Software $
2,000,100
TransEntrixMedical Devices and Equipment $ 21,000,000
Transyme Pharma, Inc. Biotechnology $
19,999,900
Viamet Pharmaceuticals, Inc. Biotechnology $
1,025,000
VMI, LLCMedical Devices and Equipment $ 3,000,000
XDS, Inc. Software $ 6,348,000
$
353,337,100
North Carolina Companies Funded in Q4 2007North Carolina Companies Funded in Q4 2007
Company Name AmountIndustry
(continued)
February 2008Slide 50
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
VC Funds Active in North Carolina
BancAmerica Capital Investors
BB&T Capital Partners
CapitalSouth Partners LLC
Carousel Capital Partners
Centura SBIC Inc.
Chrysallis Ventures
Core Capital
Dogwood Equity
Frontier Capital LLC
Golden Pine Ventures
Grotech Capital Group
Hatteras BioCapital
H.I.G. Ventures
Intel Capital
Intersouth Partners
Kodiak Venture Partners
Lovett Miller & Company, Inc.
NC IDEA
New Enterprise Associates
Noro-Moseley Partners
Novak Biddle Venture Partners
Pappas Ventures
Piedmont Angel Network
Polaris Venture Partners
Quaker BioVentures
River Cities Capital Funds
SJF Ventures
Southern Capitol Ventures
The Atlantis Group
The Aurora Funds
Trinity Ventures
TriState Investment Group
Wachovia Capital Partners
Wakefield Group
WWC Capital Group
February 2008Slide 51
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
Entrepreneurs and Venture Capital On-Line Resource ListEntrepreneurs and Venture Capital On-Line Resource Listwww.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
February 2008Slide 52
PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
For more information, contact:
Jeff Barberor
Terry Bowling
Carolinas Technology Industry GroupPhone 919 755-3000
[email protected]@us.pwc.com
Slide 52PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial