CANADA-UNITED STATES LAW INSTITUTE Private Financing of Entrepreneurships: Sources of Private Financing

2 ALL SBIC PROGRAM LICENSEES Financing to Small Businesses Reported between October 2005 and September 2006 Number of Dollar Amount Financings of Financing SBIC Program Totals 3,674 $2,897,242,934 Regular SBICs 3,573 2,882,152,803 Bank-Owned/Non-Leveraged ,817,112 Debenture SBICs 1,614 1,207,318,648 Participating Security 1,831 1,487,017,043 Specialized SBICs ,090,131 Change from Fiscal Year 2005 SBIC Program Totals (9%) 0% Regular SBICs (8%) 1% Bank-Owned/Non-Leveraged (48%) (13%) Debenture SBICs (9%) 10% Participating Security (5%) (5%) Specialized SBICs (17%) (108%)

3 NVCA National Venture Capital Association Venture Capital Investment By Year – Money Tree Co. DisbursementAvg. per Deal Sum Investment Year Number of Deals (USD Mil) (USD Mil) Source: PricewaterhouseCoopers/National Venture Capital Association Money Tree TM Report Data: Thomson Financial – Updated 12/3105

4 NVCA National Venture Capital Association Venture Capital Investment By Quarter – Money Tree Co. Disbursement Avg. per Deal Sum Investment Quarter Number of Deals (USD Mil) (USD Mil) Source: PricewaterhouseCoopers/National Venture Capital Association Money Tree TM Report Data: Thomson Financial – Updated 6/30/96

5 Venture Capital Management – Summary Statistics (est.) Number of VC Firms in Existence Number of Professionals 1,308 4,345 9,250 Number of First-Time VC Funds Raised VC Capital Under Management ($bn) Sources: National Venture Capital Association Yearbook (2004) and Cambridge Associates LLC estimates.

6 VENTURE CAPITAL INVESTMENTS January 1, September 30, 2005 Capital Invested ($ billions) Average Capital Invested Per Company ($ millions)

7 VENTURE CAPITAL DISBURSEMENTS BY FINANCING STAGE Percentage of Total Disbursements Dollars Invested ($ billions)

8 Distribution of Venture Capital Disbursements By Industry Percentage of U.S. Dollars Invested Industry Group Biotechnology Business/Financial Communications Computer Hardware & Services Computer Software Health Care-Related Industry/Energy Retailing & Media Semiconductors & Electronics Total Sources: Money Tree Survey, National Venture Capital Association, PricewaterhouseCoopers, and Thomson Venture Economics.

9 Distribution of Venture Capital Disbursements By Region Percentage of U.S. Dollars Invested Region Northern California Northeast Midwest Southern California Southeast Northwest Southwest Alaska/Hawaii/Puerto Rico Unknown Total Sources: MoneyTree Survey, National Venture Capital Association, PricewaterhouseCoopers, and Thomson Venture Economics.

10 NUMBER OF VENTURE-BACKED INITIAL PUBLIC OFFERINGS AND MERGERS AND ACQUISITIONS January 1, December 31, 2006

11 NUMBER OF VENTURE-BACKED INITIAL PUBLIC OFFERINGS AND MERGERS AND ACQUISITIONS January 1, December 31, 2006 Sources: National Venture Capital Association Yearbook and Venture Economics

12 PlacementTracker With transaction data as of December 29, 2006, PlacementTracker is reporting 2006 full-year PIPE market issuances of $27.83 billion. This represents a 39% increase over the 2005 total of $20.01 billion and a 14% increase over the previous one-year issuance record set in 2000 with $24.34 billion. The fourth quarter of 2006 also set a new fourth-quarter record with $6.98 billion in PIPE Market issuances. All totals exclude Structured Equity Lines and Canadian-domiciled issuers. Source:

13 SPAC’s (Specialized Acquisition Companies) In all, more than 50 SPAC’s filed to go public in About half of these, including Cold Spring Capital, have made it to market, raising around $1.2 billion that can be used for acquisitions. By comparison, only 11 deals went public in 2004, and those raised less than $500 million. Source:

14 CAPITAL COMMITMENTS TO PRIVATE EQUITY FUNDS January 1, November 30, 2006 ($ billions) Sources: Asset Alternatives, Inc. and The Private Equity Analyst. 332a Sources: Asset Alternatives, Inc. and The Private Equity Analyst. 332a Sources: Asset Alternatives, Inc. and The Private Equity Analyst

15 CAPITAL COMMITMENTS TO DOMESTIC LEVERAGED BUYOUT FUNDS January 1, February 28, 2007 ($ billions) Source: Buyouts

16 COMPARISON OF POOLED MEAN RETURNS OF VARIOUS PRIVATE EQUITY CATEGORIES END-TO-END RETURNS (%) NET TO LIMITED PARTNERS Periods Ended September 30, 2006 Average Annual Compound Returns (%) Q3OneThreeFiveTenFifteen Asset Class2006YearYearsYearsYearsYears U.S. Venture Capital U.S. Private Equity U.S. Buyouts U.S. Buyouts $0 - $150M U.S. Buyouts $150 - $750M U.S. Buyouts >$750M U.S. Mezzanine Funds Top Two Quartiles Only U.S. Venture Capital U.S. Private Equity S&P Russell 2000 R Dow Jones U.S. Small Cap n/a Nasdaq Composite Wilshire Sources: Cambridge Associates LLC Non-marketable Alternative Assets Database, Dow Jones & Company, Inc., Standard & Poor's, Thomson Datastream, The Wall Street Journal, and Wilshire Associates, Inc. Notes: Returns are end-to-end pooled means net of management fees, expenses, and carried interest. The pooled means represent the end-to-end rates of return calculated on the aggregate of all cash flows and beginning and ending market values as reported by the General Partners to Cambridge Associates LLC in their quarterly and annual audited financial reports. The U.S. Venture Capital sample represents over 80% of the total dollars raised by U.S. venture managers between 1981 and The U.S. Private Equity sample represents over 70% of the total dollars raised by funds formed between 1986 and U.S. Private Equity includes buyout, special equity expansion, special situations, restructuring and mezzanine funds. 1 Data are price returns only.