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North Carolina Council for Entrepreneurial Development The State of Venture Capital February 1, 2007 Mark G. Heesen President.

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Presentation on theme: "North Carolina Council for Entrepreneurial Development The State of Venture Capital February 1, 2007 Mark G. Heesen President."— Presentation transcript:

1 North Carolina Council for Entrepreneurial Development The State of Venture Capital February 1, 2007 Mark G. Heesen President

2 Fundraising & Resources

3 Typically Buyout Funds Outraise Venture 2x-3x Source: Thomson Financial / National Venture Capital Association – News release 1/16/2007 and prior releases

4 The Number of US VC Firms Has Peaked.. Thankfully Source: 2006 NVCA Yearbook, prepared by Thomson Financial, page 18

5 VC Fundraising Was Strong Thru 2000 - Recent Uptick Way Below Bubble Levels Source: VentureXpert™ Database by VE & NVCA Does not include Corporate Venture groups.

6 Largest 24% of Funds Attract 74% of Capital 2005 Funds by Size: $0-$25M57 $25.1M-50M 14 $50.1M-$250M 42 $250.1M+ 43 Source: VentureXpert™ Database by VE & NVCA

7 Sources of Venture Funds Source: 2003 data from 2004 NVCA Yearbook, prepared by Thomson Financial, page 22

8 Investment Marches On - Rumors that the Venture Industry has stopped investing are greatly exaggerated

9 VC Investment Peaked in 2000; Recently 20-23% of Peak; 2006 Higher Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

10 Most Recent Quarters Have Been Consistent – What is the “Right” Level? Is the 2006 upturn a shift? Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

11 1998 to 2006 – Similar Inv Level But: IT share from 53% to 50%; Life Sciences from 17% to 28% Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

12 Corporate VC Peaked in 2000 at >1/4 of deals and 1/6 of the money Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

13 North Carolina Update

14 State and Regional Data Sources www.pwcmoneytree.com > Historical Trend Data 10 year trends can be selected by a number of criteria including state www.pwcmoneytree.com

15 Consistent with national, 2006 NC investment was up slightly to roughly ¼ of 2000 Peak Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

16 Total Number of NC Deals Tracks National Trend But Grew In 2006 Greater Than National 10% Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

17 Life Sciences Are Strong in NC (2006 MoneyTree Sectors) Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

18 The Exit Scene - the importance of acquisitions has become clear over the past several years

19 IPO Levels Increased in 2004 but rally was not sustained Source: Thomson Financial/National Venture Capital Association

20 Recent Median IPO Valuations Are Consistently Higher than Pre-1999 But Capital Efficiency is Still Key Source: Thomson Financial/National Venture Capital Association

21 What’s in the IPO Pipeline? IPOs During Period and Registration Counts at Period End Source: Thomson Financial/National Venture Capital Association

22 IPO Markets Require More Maturity -- Again [1999=4.3y. 2004=8.1y. Sample was very small for 2001-2003] Source: Thomson Financial/National Venture Capital Association

23 VB Acquisition Counts Don’t Change Much … Source: Thomson Financial/National Venture Capital Association

24 M&A Proceeds Vary Greatly As the Mix between “Good” Exits and Fire Sales Shift Source: Thomson Financial/National Venture Capital Association

25 M&A Exits Consist of High and Low Valuation Deals – Some Strengthening(?) Source: Thomson Financial/National Venture Capital Association

26 Venture Exit Counts- IPOs and M&A by Year Source: Thomson Financial/National Venture Capital Association

27 Exit Outcomes [Where Are They Now?]

28 For First Fundings From 1991 to 2000, Approximately 33% Were Acquired and 14% Went Public [11,686 Companies Total] Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

29 Of Companies Receiving First Funding in 2001 and 2002, There Are Few Exits Has Something Changed? [2040 Companies Total] Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial

30 Performance measurement

31 Private Equity Returns - Converging on Expectations? As of 6/30/2006 Source: Thomson Financial/National Venture Capital Association

32 NVCA Annual Meeting Washington DC April 17-18, 2007 Trends and issues from beyond Palo Alto and Washington Latest thinking and insights Industry, CFO, Young VC, Legal, Corporate VC Breakouts

33 Www.nvca.org www.aeeg.org


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