1. The State of Venture Investing and Observations on the Industry June 6, 2013 Mark G. Heesen NVCA President

2. The Number of US VC Firms Has Peaked.. Thankfully Source: 2013 NVCA Yearbook, prepared by Thomson Reuters, figure 1.04

3. 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

4. Clean Tech Deal Sizes Have Declined – All Sectors Driving Toward Capital Efficiency Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

5. First Fundings - VCs Continue To Invest in Promising Companies – 1,000-1,300 Considered Healthy; Life Sci particularly slow now Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

6. The Number of First Fundings of Life Sciences Companies is Way Down… 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

7. 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

8. A Closer Look at Recent Minnesota 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.www.pwcmoneytree.com

9. Minnesota investing – recent pressure and slow first quarter $ Millions Into Companies Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

10. Recent Minnesota Financings Are Follow-On Rounds into Life Science Companies (Not shown: Recent first fundings $ heavily into Software, not LS!) VC Dollar Investment – 2Q 2011 to 1Q 2013 Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

11. The Exit Scene - the importance of acquisitions has become clear over the past several years but the IPO market remains the key!

12. IPO Levels Overall Below What is Needed; 2012 Numbers Driven by Facebook & friends ($16.0B) Source: Thomson Reuters/National Venture Capital Association

13. M&A Activity Source: Thomson Reuters/National Venture Capital Association

14. Venture Exit Counts- IPOs and M&A by Year Source: Thomson Reuters/National Venture Capital Association

15. 2012 Was First Post-Bubble Year That Distributions Exceeded Contributions in the US Source: Cambridge Associates, NVCA

16. 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

17. www.nvca.org nvcaccess.nvca.org