Venture Capital Update Andy White Analysis Manager PitchBook Data, Inc. andy.white@pitchbook.com Test drive PitchBook demo@pitchbook.com

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National VC Trends

Stages of funding overview Accelerators/incubators

Later stage valuations drive piles of capital despite fewer deals U. S Later stage valuations drive piles of capital despite fewer deals U.S. VC deal flow 60% of $ in LVC Deals 54% of $ in LVC Deals Includes angel, seed, evc, lvc. Drastic increase in $$$ going into LVC => fewer deals in 2015, but larger deals Angel/Seed rounds now account for 53% of deals, up from 20% in ‘07-’08 => easier to start companies, more seeking funding *Through 12/31/2015

2015: 100 deals of $100M+ U.S. VC deal flow by quarter Despite obvious downturn in deal making in 2015, capital invested is still huge => bigger deals With vals so high, investors have to shell out more cash for deals *Through 12/31/2015

“Unicorn” rounds have skyrocketed U. S “Unicorn” rounds have skyrocketed U.S. VC rounds valued over $1 billion $43.3B invested across only 131 companies since 2006. “age of the unicorn” – a few highly valued companies, raising ridiculous sums Is this sustainable? What we are all reading about Includes companies such as: Uber Lyft DraftKings Zulily Facebook Twitter *Through 12/31/2015

Median late stage valuations more than double from 2010 levels Median pre-money valuation ($M) by series Late stage vals hitting ridiculous levels *Through 12/31/2015

“Tourists” filling VC funding gap U. S. VC fund contributions vs. U. S “Tourists” filling VC funding gap U.S. VC fund contributions vs. U.S. VC capital invested Non-traditional VC investors account for an increasing share of VC $ spend. VC funds are deploying a pretty steady amount of capital The massive increases are coming from outside traditional VC funds Mutual funds and PE such as: T.Rowe Goldman Tiger global Fidelity KKR *Through 12/31/2015

A glut of heavily funded companies will be seeking public market exits % of VC Backed Cos to IPO by VC Capital Raised (2006-2015) Over 500 companies having raised $100M+ yet to be exited. Lots of companies sitting in a position to be taken public Distinct lack of IPOs last year, and this year. Markets are getting crushed in 2016 so far What next? Can the market support it? *Through 12/31/2015

Seed round valuations reach levels previously seen at series A Median pre-money valuation ($M) by series Seed vals are becoming what A vals used to be. Raising an A round is more of a hurdle now VCs expect more from companies looking to raise A round than in the past. *Through 12/31/2015

Massive increase in angel & seed rounds U.S. VC deal count by stage Angels, micro-VC, pre-seed funds starting to pick up the slack Easier to start a company these days, so more people are Series A crunch in the making? *Through 12/31/2015

Accelerators & incubators are springing up everywhere U. S Accelerators & incubators are springing up everywhere U.S. accelerator deal round count Accelerators popping up all over Can create good companies: Reddit Airbnb DigitalOcean ClassPass Plated Remitly *Through 12/31/2015

63% of funds under $100M in 2015 U.S. VC fundraising Avg. size: $149M 2014 & 2015 fundraising levels are great. Many smaller funds being raised => over 60% of funds raised are under $100m --- up from 40% in 2007 *Through 12/31/2015

Washington VC Trends

WA accounts for nearly 70% of capital invested in the PNW since 2013 PNW VC capital invested ($M) by state WA dominates the PNW *Through 12/31/2015

More WA-based companies are raising capital WA VC deal flow Cheaper alternative to Bay area Good talent base (microsoft, amazon) *Through 12/31/2015

Angel & seed deals have increased rapidly over the past decade Washington VC deal count by stage Lots of early stage funding happening Angels are filling funding gap Could lead to crunch down the road *Through 12/31/2015

1.8x more unique investors involved in WA deals than in 2010 Active investors in WA VC deals by year # of distinct investors having participated in a WA deal by year => 1 deal or 10 deals counts for 1 Increasing amount of unique investors attracted to the area *Through 12/31/2015

CA investors continue to be the most active investors in WA companies Active investors in WA VC deals by year CA & WA investors the most active in the area *Through 12/31/2015

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