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THANK YOU CVG SPONSORS
B Round
A Round
Venture Capital Sponsors Professional Service Firms
Mark Heesen President, National Venture Capital Association
Welcome
Nat Brinn Principal, Vital Financial
President, CVG Hartford Chapter
@CTVenture
Three Minute Pitches
@CTVenture @CTNEXT
Jeremy McCool
Joseph Glick
Paul Hallenbeck
Rhodemann Li
Chris Woods
Expertool Paradigm, LLC
Mark Heesen President, National Venture Capital Association
Introduction
Jacqueline Pennino Scheib Partner, Robinson & Cole LLP
Board Member, CVG Hartford Chapter
@CTVenture
Mark G. Heesen President National Venture
Capital Association
The State of Venture Investing and Observations on the Industry
@CTVenture
The Number of US VC Firms Has Peaked
At Year End
# Active Firms
Capital Managed
1970 28 $1B
1980 87 $4B
1990 100 $28B 2000 1,053 $224B
2012 522 $199B
Source: 2013 NVCA Yearbook, prepared by Thomson Reuters, figure 1.04
$0
$20
$40
$60
$80
$100
$1201988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
1Q
13
$ B
illi
on
In
ve
ste
d
VC Investment Peaked in 2000;
Industry is Smaller Now; $27B in 2012
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
$105b
$32b
$27b
$6b
First Fundings - VCs Continue To Invest in Promising
Companies – 1,000-1,300 Considered Healthy; Life Sci particularly slow now
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
# Cos 1,430 2,469 3,390 1,234 850 776 975 1,076 1,280 1,417 1,305 828 1,086 1,325 1,203 263
# F
irst
Tim
e F
un
din
gs
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
The Number of First Fundings of Life Sciences
Companies is Way Down…
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
# LS FF 153 193 203 167 191 170 178 168 190 205 275 270 256 173 188 180 140 20
0
50
100
150
200
250
300
Note: For this chart, biotech, pharmaceuticals, med devices, and therapeutics are included. HC services is not.
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
Investment Trends from
NVCA 2013 Yearbook
• A record 48 states and DC reported venture deals in 2012
• That said, a record 53% of the $ went to CA cos
• In 2012, 522 traditional and CVC groups invested vs 1,053
in bubble
• In 2012, 10 largest funds raised 48% of capital leaving 173
funds with the other 52%
• # of IPOs down from 2011 to 2012, but total IPO valuation
$122.3 (hi since 1986) and proceeds of 21.5B
• Corporate VC 8.2% of dollars and engaged in 15.2% of
deals
• 51.8% of deals are seed and early – highest since 1985
Source: NVCA 2013 Yearbook, prepared by Thomson Reuters
10
A Closer Look at Recent Connecticut Investing
Note that data “cuts” can be done from the historical trend
data section of www.pwcmoneytree.com or from the
National Aggregate Spreadsheet which can be downloaded
from that site.
11
Recent Connecticut Investing –
First Quarter Was Soft Everywhere…
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
$M 270.0 345.2 889.2 1,550 608.2 191.9 223.6 251.6 209.6 289.0 271.0 236.1 190.2 133.2 156.7 157.6 29.8
# Deals 66 73 96 123 78 41 38 38 34 30 36 42 42 62 56 52 11
0
20
40
60
80
100
120
140
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$ M
illi
on
s I
nto
Co
mp
an
ies
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
12
First Fundings in Connecticut
Have Been Averaging 12-20/year Recently Big $ for Biotech, Almost ½ the Deals into Software
-
5
10
15
20
25
30
35
40
45
50
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
# Cos 30 39 47 19 13 7 9 10 8 18 16 10 21 19 12 3
# F
irst
Tim
e F
un
din
gs
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
Recent Connecticut Investment by Dollars -
Biotech & Medical Get the Majority of $
Biot41%
SW23%
Ind/Ener16%
Med Dev10%
IT Svcs5%
Other5%
VC Dollar Investment – 2Q 2011 to 1Q 2013
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
Recent Connecticut Investment by # Deals -
Software Gets More Than 1/3 of the Attention
SW40%
Biotech17%
Ind/Ener11%
Med Dev10%
IT Svcs6%
Other16%
VC Dollar Investment – 2Q 2011 to 1Q 2013
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
The Exit Scene -
the importance of acquisitions has become clear
over the past several years
but the IPO market remains the key!
16
IPO Levels Overall Below What is Needed; 2012 Numbers Driven by Facebook & friends ($16.0B)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
$Offer B 5.8 4.2 24.0 27.4 4.1 2.3 2.0 10.3 5.1 7.1 12.4 0.8 2.0 7.7 10.7 21.5 0.7
Count 141 79 280 238 37 24 26 83 59 68 92 7 13 69 51 49 8
0
50
100
150
200
250
300
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Nu
mb
er
of
IPO
s
Off
er
$B
Source: Thomson Reuters/National Venture Capital Association
M&A Exits for Venture-Backed Companies are Improving –
But There is a Long Way to Go!
Source: Thomson Reuters/National Venture Capital Association
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
$B 7.9 8.3 39.6 81.8 25.6 12.5 9.2 30.0 20.0 25.4 30.7 16.2 12.4 17.7 24.1 21.5 1.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
$ B
illi
on
Disclosed Acquisition Price Paid $B
Venture Exit Counts- IPOs and M&A by Year
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
#M&A 97 116 143 189 227 380 384 363 323 402 443 485 488 422 360 545 498 469 77
#IPO 202 270 141 79 280 238 37 24 26 83 59 68 92 7 13 69 51 49 8
0
100
200
300
400
500
600
700
Nu
mb
er
of
Iss
ue
s
#M&A
#IPO
Source: Thomson Reuters/National Venture Capital Association
2012 Was First Post-Bubble Year That
Distributions Exceeded Contributions in the US
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Dist/Contrib 149% 226% 92% 35% 42% 64% 96% 71% 95% 47% 47% 94% 94% 162%
0%
50%
100%
150%
200%
250%
US VC - Ratio of LP Distributions to LP Contributions
Source: Cambridge Associates, NVCA
Recent Battles
• J.O.B.S. Act of 2012
• VC fund registration/regulation
• Taxation of long term capital gains taken as
carried interest
• FDA reform
• Clean technology science funding/supportive
policies (ARPA-E support)
• Healthcare
• Internet regulation
• Preserving investment company accounting 21
www.nvca.org
nvcaccess.nvca.org
22
Closing Remarks
Liddy Karter Executive Director, Crossroads Venture Group
Managing Director, Enhanced Capital Partners
@CTVenture 23
Welcome New CVG Members!
Jon Brodeur, Emme, Inc.
Glen Cohen, Click Flick LLC
Carrie Collins, CTNEXT
Len Doherty, L.J. Doherty & Associates
Joseph Dornfried, Carmody & Torrance LLP
Ryan Duques, TutaPoint.com
Joseph Glick, Expertool Paradigm LLC
Ansong Sam Omari, Afram Integrated Biotechnologies
Andy Zaback, Long Meadow Capital Partners
CVG Upcoming Hartford Events
Boardroom Series 7:30 AM – 9:00 AM
Second Thursday 4:30 PM – 7:00 PM
Fall Schedule
to be
announced!
October 10
Advanced Manufacturing
January 2014
Healthcare IT
CVG Regional Upcoming Events
Boardroom Series 7:30 AM – 9:00 AM
Second Thursday 4:30 PM – 7:00 PM
June 14
M&A: Tax Considerations
Stamford
June 19
Employment & Immigration Issues
New Haven
July 11
Grow with the Grove
New Haven
August 8
Summer Networking Party
Stamford
THANK YOU CVG SPONSORS
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A Round
Venture Capital Sponsors Professional Service Firms
\
CVG Events Calendar Offers Over 60 Events
All Second Thursday events
are free for members.