PricewaterhouseCoopers National Venture Capital Association Data provided by Thomson Reuters Report Q1 2010 US results The Q1 2010 MoneyTree results are in! This special report provides summary results of. More detailed results, including an expanded version of this report, can be found on the MoneyTree website at
Total equity investments into venture-backed companies Venture capitalists invested $4.7 billion in deals in the first quarter of 2010, according to the MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association, based on data provided by Thomson Reuters. Quarterly investment activity decreased 9 percent in terms of dollars and fell 18 percent in number of deals compared to the fourth quarter of 2009 when $5.2 billion was invested in 832 deals. Yet the quarter represented a higher start than the first quarter of 2009 when venture capitalists completed deals for $3.4 billion. $ in millions 14,000 12,000 10,000 `02 `03 `04 `05 `06 `07 `08 `09 `10 8,000 6,000 4,000 6,521 5,843 4,297 4,282 4,104 4,765 4,738 5,451 5,213 6,087 4,783 5,815 5,051 6,259 5,798 5,766 6,310 7,096 6,648 6,268 7,343 7,321 7,739 8,019 7,745 7,359 7,070 5,836 4,142 5,100 5,176 4,727 3,364 2,000 0 Quarter Number 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 (854) (871) (704) (738) (717) (745) (732) (800) (731) (865) (702) (853) (738) (838) (800) (833) (883) (979) (920) (964) (874) (1,064) (1,012) (1,077) (1,020) (1,065) (996) (913) () (697) (704) (832) () 2
Investments by industry The Biotechnology industry received the highest level of funding for all industries in the quarter with $825 million going into 99 deals. This level of investment represents a 24 percent decrease in dollars and a 14 percent decrease in deals compared to the fourth quarter when $1.1 billion went into 115 deals. Medical Devices and Equipment saw a 29 percent decline in dollars and 30 percent decline in deal volume in the first quarter with $517 million going into 61 deals. This sector ranked fourth overall for the quarter in terms of dollars invested. The Life Sciences sector (biotechnology and medical device industries combined) saw a notable decrease in venture capital investing during the first quarter, dropping 26 percent in dollars and 21 percent in deals from the prior quarter to $1.3 billion going into 160 deals. The Software industry had the most deals completed in the first quarter with 144 rounds, although this represented a drop of 25 percent from the 193 rounds completed in the fourth quarter. In terms of dollars invested, the Software sector was in second place, declining 29 percent from the prior quarter to $ million in the first quarter of 2010. The drop in the number of deals in the first quarter puts Software at the fewest number of deals since the fourth quarter of 1995. The Clean Technology sector saw an 87 percent increase in dollars over the fourth quarter to $773 million. The number of deals completed in the first quarter increased 44 percent to 69 deals compared with 48 deals in the fourth quarter. Internet-specific companies received $807 million going into 158 deals in the first quarter, a 14 percent decrease in dollars and a 19 percent decrease in deals over the fourth quarter of 2009 when $941 million went into 196 deals. Biotechnology Software Industrial/Energy Medical Devices and Equipment Semiconductors Media and Entertainment IT Services Telecommunications Financial Services Business Products and Services Electronics/Instrumentation Consumer Products and Services Computers and Peripherals Networking and Equipment Retailing/Distribution Healthcare Services Other deals 34 50 33 0 200 400 600 800 1,000 1,200 1,400 89 629.3 115 1,080.4 99 824.7 158 688.8 193 956.8 144.2 47 322.4 71 599.7 66 63 489.9 87 61 517.0 24 171.7 41 243.0 33 48 85 210.3 65 317.9 51 227.0 55 254.4 61 291.0 145.3 146.6 17 111.8 17 146.6 24 25 93.5 16 61.5 14 121.2 8 19 16.7 61.6 19 106.8 16 64.3 23 114.7 23 97.8 15 15 38.5 81.7 12 95.0 17 83.7 19 147.3 11 68.6 10 28.3 9 75.1 5 41.1 10 39.9 8 28.3 6 18.1 3 2.6 9 9.7 5 10.7 215.1 277.5 369.1 445.5 674.1 723.6 832 5,176.5 3 Definitions of the Industry categories can be found on the MoneyTree Web site at
Investments by stage of development Seed and Early stage investments declined in the first quarter, dropping 30 percent to $1.4 billion. The number of Seed and Early stage deals dropped 24 percent to 299 from the prior quarter. Seed/Early stage deals accounted for 44 percent of total deal volume in the first quarter, compared to the fourth quarter when it accounted for 47 percent of all deals. The average Seed deal in the first quarter was $5.4 million, up from $4.0 million in the fourth quarter. The average Early stage deal was $4.6 million in first quarter, down from $5.6 million in the prior quarter. Expansion stage dollars increased 9 percent in the first quarter, with $1.8 billion going into 224 deals. Overall, Expansion stage deals accounted for 33 percent of venture deals in the first quarter, up from 29 percent in the fourth quarter of 2009. The average Expansion stage deal was $7.8 million, up significantly from $6.6 million in the fourth quarter of 2009. Investments in Later stage deals remained flat in dollars and fell 20 percent in deals to $1.5 billion going into 158 rounds. Later stage deals accounted for 23 percent of total deal volume in the first quarter, compared to 24 percent in the fourth quarter 2009 when $1.5 billion went into 197 deals. The average Later stage deal in the first quarter was $9.8 million, which increased significantly from $7.8 million in the prior quarter. Later Stage Expansion Early Stage Startup/Seed deals 0 500 1,000 1,500 2,000 2,500 3,000 3,500 212 1,453.9 197 1,528.9 158 1,544.4 175 918.5 243 1,609.9 224 1,753.8 187 735.5 295 1,646.4 221 1,006.5 61 256.2 97 391.2 78 422.3 832 5,176.5 Definitions of the Stage of Development categories can be found on the MoneyTree Web site at Investments by sequence of financing First-time financing (companies receiving venture capital for the first time) dollars and deals decreased 14 percent with $972 million going into 208 deals. First-time financings accounted for 21 percent of all dollars and 31 percent of all deals in the first quarter, compared to 22 percent of all dollars and 29 percent of all deals in the fourth quarter of 2009. Companies in the Software, Biotechnology, and Financial Services industries received the highest level of first-time dollars. The average firsttime deal in the first quarter was $4.7 million, which is unchanged from the prior quarter. Seed/Early stage companies received the bulk of first-time investments, garnering 56 percent of the dollars and 73 percent of the deals, but fell short of fourth quarter percentages when they accounted for 65 percent of the dollars and 77 percent of the deals. First Second & Third Fourth, Fifth, & Sixth Seventh & Beyond deals 0 500 1,000 1,500 2,000 2,500 3,000 3,500 162 703.0 243 1,130.9 208 972.0 221 933.3 283 204 1,515.0 1,492.4 159 1,117.2 186 1,541.7 164 1,419.1 93 610.6 120 105 843.5 988.9 832 5,176.5 4
Investments by region Silicon Valley continued to garner the lion s share of venture capital dollars, capturing 32 percent of the $4.7 billion invested in US-based companies throughout the quarter. The New England Region maintained its customary number two position, with an 8 percent increase in dollars but a 17 percent decline in deals when compared to the fourth quarter. New York Metro received 12 percent of total US dollars and 11 percent of deals in the first quarter. Both dollars and deals were up for the top five regions when compared to investments from the same time last year. Half of the MoneyTree regions recorded an increase in funding over fourth quarter 2009 investment. The North Central and Colorado regions had the steepest drop in funding for the quarter with 78 percent and 68 percent respectively, when compared to the previous quarter. Silicon Valley New England NY Metro LA/Orange County Northwest Midwest San Diego DC/Metroplex Southeast Texas Philadelphia Metro Colorado North Central South Central SouthWest Sacramento/N. Cal Upstate NY AK/HI/PR deals 0 500 1,000 1,500 2,000 2,500 3,000 3,500 200 1,313.7 268 1,943.5 202 1,528.2 73 108 408.2 692.2 90 749.0 67 66 428.7 476.2 75 566.0 41 228.3 43 283.5 49 464.0 28 139.4 34 195.1 33 237.9 46 147.5 65 175.3 44 236.8 16 92.0 31 304.5 29 222.5 28 79.8 47 207.5 28 176.2 30 113.6 31 188.8 36 174.5 31 173.0 30 189.1 21 130.1 14 30.7 28 142.1 22 79.1 21 89.1 23 178.1 11 56.9 8 52.7 21 126.8 9 27.6 9 10.3 9 2.4 9 23.8 14 41.4 22 61.5 10 20.7 1 7.0 1 3 3.0 20.1 6 1.7 4 6 5.8 8.9 2-2 7.1 0.0 4.2 832 5,176.5 Unknown region totals not included 5
Most active venture investors Q1 2010 Draper Fisher Jurvetson held the top spot on this quarter s most active list with a total of 18 deals. First Round Capital and New Enterprise Associates rounded out the top three with 17 and 16 deals respectively. The 53 most active venture investors accounted for 27 percent of total venturebacked deals. Most active are those investors who participated in five or more deals. Company City Deals Draper Fisher Jurvetson Menlo Park, CA 18 First Round Capital West Conshohocken, PA 17 New Enterprise Associates, Inc. Timonium, MD 16 Kleiner Perkins Caufield & Byers Menlo Park, CA 14 Menlo Ventures Menlo Park, CA 14 Polaris Venture Partners Waltham, MA 13 Rho Capital Partners, Inc. New York, NY 12 Benchmark Capital Menlo Park, CA 11 Domain Associates LLC Princeton, NJ 11 Foundation Capital Menlo Park, CA 11 North Bridge Venture Partners San Mateo, CA 11 Redpoint Ventures Menlo Park, CA 11 ARCH Venture Partners Chicago, IL 8 Atlas Venture, Ltd. Waltham, MA 8 Canaan Partners Westport, CT 8 Morgenthaler Ventures Menlo Park, CA 8 Oak Investment Partners Westport, CT 8 U.S. Venture Partners Menlo Park, CA 8 Accel Partners Palo Alto, CA 7 Ben Franklin Technology Partners Philadelphia, PA 7 Southeastern PA Bessemer Venture Partners Larchmont, NY 7 Connecticut Innovations, Inc. Rocky Hill, CT 7 Highland Capital Partners LLC Lexington, MA 7 InterWest Partners Menlo Park, CA 7 Trinity Ventures Menlo Park, CA 7 True Ventures Palo Alto, CA 7 Venrock Associates Palo Alto, CA 7 Company City Deals Westly Group, The Menlo Park, CA 7 Battery Ventures, L.P. Waltham, MA 6 Flagship Ventures Cambridge, MA 6 JAFCO Ventures Palo Alto, CA 6 Kansas Technology Enterprise Topeka, KS 6 Corporation Khosla Ventures Menlo Park, CA 6 Matrix Partners Waltham, MA 6 Rockport Capital Partners Boston, MA 6 Adams Street Partners LLC Chicago, IL 5 BlueRun Ventures Menlo Park, CA 5 Care Capital, LLC Princeton, NJ 5 EPIC Ventures Salt Lake City, UT 5 Felicis Ventures San Francisco, CA 5 Founder Collective Somerville, MA 5 Frazier Healthcare and Seattle, WA 5 Technology Ventures General Catalyst Partners Cambridge, MA 5 Globespan Capital Partners Boston, MA 5 Illinois Ventures LLC Chicago, IL 5 Intel Capital Santa Clara, CA 5 Lightspeed Venture Partners Menlo Park, CA 5 New Vantage Group Vienna, VA 5 Nth Power San Francisco, CA 5 Quaker BioVentures, Inc. Philadelphia, PA 5 Sequoia Capital Menlo Park, CA 5 Shasta Ventures Management LLC Menlo Park, CA 5 Three Arch Partners Portola Valley, CA 5 6
pwcmoneytree.com Contact Tracy T. Lefteroff Global Managing Partner Venture Capital Practice tracy.t.lefteroff@us.pwc.com David Silverman Emerging Company Services Practice Leader East david.silverman@us.pwc.com Danny Wallace Emerging Company Services Practice Leader West danny.wallace@us.pwc.com Deborah Volpe MoneyTree Project Manager deborah.volpe@us.pwc.com pwc.com 2010 PricewaterhouseCoopers LLP. All rights reserved. PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP 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. BS-10-0517 Data is current as of April 16, 2010. PricewaterhouseCoopers and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTree Report has been obtained from reliable sources. However, neither of the parties nor Thomson Reuters can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time.