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Venture Capital Report - Q4 2011

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TABLE OF CONTENTS
QUARTER SUMMARY                                               2

QUARTERLY TRENDS                                              3

SECTOR REVIEW                                                 11
1      INTERNET                                               11

2      HEALTHCARE                                             18

3      GREEN / CLEAN TECH                                     25

GEOGRAPHIC REVIEW
1      CALIFORNIA                                             32

2      MASSACHUSETTS                                          38

3      NEW YORK                                               43

4      WASHINGTON                                             49

5      TEXAS                                                  54



DEFINITIONS & DATA INTEGRITY                                  59




    © 2012, CB Insights. All rights reserved. For more information about CB Insights, please email info@cbinsights.com.

www.cbinsights.com
  2                                                                     Venture Capital Activity Report | Q4 2011


Q4 2011 – This Quarter in Venture Capital
Bam! 2011 VC investment and deal totals mark highest seen in 10 years. Talk of
bubble begins in 3, 2, 1…..
VCs weren’t bashful in Q4 2011 showering 755 companies with $7.6 billion in venture funding. Q4’s performance brought
2011’s total to $30.6B invested in 3051 deals which marked a 10-year high for the VC asset class on both deals and dollars.




The Fat VC Funnel                                                  Healthcare VC – Rumors of Death Greatly Exaggerated
  So with 2011’s results, the bubble talk will shift into           Healthcare hit a five quarter high on funding and showed
  overdrive. The reality is that VC funding is a funnel. More       solid deal activity. Sector reverses downward trend and
  companies get Series A than B than C – etc, etc. Within           shows pulse to close out 2011.
  tech, our data shows the VC funnel has gotten fat at the
  top (a lot of Series A and Seed deals). And VC                   Massachusetts’ Balanced Attack Brings It Back to #2
  Darwinism means that not all of these companies can or            Massachusetts took back its #2 spot for both deals and
  should receive Series B, C, etc. While some would say             dollars with deals across multiple sectors. Healthcare
  this is the way markets work, for a company raising               was particularly strong. Internet investment in the state
  money, this can represent a “chokepoint”. Some will               was the one weak spot in an otherwise strong showing.
  receive funding, some will die quickly, some will get acq-
  hired or get dressed up as acquisitions, some will be            Internet Takes 1/3 of VC Dollars in 2011
  orphaned and figure out a way to make money and                    Cali and NY account for 59% of internet VC deals and
  become steady businesses and some will die a slower,               66% of funding. Internet investments took over 1/3 of
  more tortured death.                                               venture dollars in 2011. Massachusetts fell to a five
                                                                     quarter low on internet deal share. Mega-deals in the
New York – Back to Reality or a Speed Bump?                          data storage (Dropbox and Box.net) buoy funding.
 One quarter does not a trend make. So after taking the
 #2 spot for aggregate VC deals and dollars in Q3’11, NY           California Steady as Ever.
 slipped back to #3 behind Massachusetts. The state                 Cali still the top spot for VC deals and dollars. ‘Nuff said.
 retains its hold on #2 for tech deals and dollars and
 showed some life in the healthcare realm as well. We’ll           Washington Stalls. Again.
 see if NY can fight back like it’s resilient football Giants or    We’ll bring back our “Sleeping in Seattle” metaphor as
 whether the state will just talk incessantly and not perform       Washington continued its multi-quarter dealflow slide and
 like the Jets in future quarters.                                  also came down on funding.


Only deals in which VCs are participating are included. Companies which raise money from mutual or private equity funds
or corporations (unless it is their corporate venture arms) are not included. We recommend you review our definitions and
methodology on p. 59 to see what is included/excluded as there is a great amount of misinformation out there.

 www.cbinsights.com
3                                              Venture Capital Activity Report | Q4 2011


$7.6B over 755 Deals – Q4 Continues 2011’s Torrid Pace
Q4 ’11 was slower than recent quarters but continued 2011’s strong VC performance.
2011 reaches $30.6B in total venture funding marking 10 year high.




www.cbinsights.com
 4                                               Venture Capital Activity Report | Q4 2011


Back to Reality? Mass’ Deal Share Eclipses NY
NY’s rise to #2 was short-lived as Mass regains its #2 spot on deals. Cali, Mass and
NY continued to own 60+% share of deals.




www.cbinsights.com
 5                                                Venture Capital Activity Report | Q4 2011


Cali Dominates. Mass & Cali Take 65% of VC Dollars
NY funding share dipped back to historical levels. California and Mass took significant
share of venture dollars with Texas registering a big quarter on back of big deals.




www.cbinsights.com
6                                                          Venture Capital Activity Report | Q4 2011


What Smart Investors, Bankers and
Wealth Managers Use to Get Ahead…
With CB Insights you can access deep private company info that was once exclusively
available behind prohibitively expensive paywalls.


CB Insights is accessible for free by visiting http://www.cbinsights.com


 82,000+ Private Company Profiles.                             Coverage Universe
                 Over 82,000 high value private
                 company profiles across industries and        •   Venture Capital – 1999 to present
                 sectors. Medical devices to                   •   Angel Investment
                 mobile. Industrial to internet.               •   Private Equity
                                                               •   Federal SBIR Grants – 3 years
                                                               •   State Grant Programs
 From Angel to Private Equity.                                 •   Incubators – Over 300
                 Angel investment to venture capital to        •   Middle Market Private Companies
                 private equity to government funding to
                 under the radar mid-market private            Sector Coverage
                 companies.
                                                               •   Green/clean tech
                                                               •   Internet
 Company & Investor Updates via Email.                         •   Mobile & Telecom
                                                               •   Software
                 Add companies and investors of                •   Energy & Utilities
                 interest to your CBI Watchlist and get        •   Computer Hardware & Services
                 notified of changes and updates               •   Healthcare
                 automatically.                                •   Industrial
                                                               •   Automotive & Transportation
 Management & Board Information                                •   Business Products & Services
                                                               •   Consumer Products & Services
                 Find out about the people behind the          •   Electronics
                 companies including management and            •   Environmental Services &
                 board of directors profiles.                      Equipment
                                                               •   Financial Services
                                                               •   Food & Beverages
                                                               •   Leisure
 Analytics & Reporting                                         •   Media
                                                               •   Metals & Mining
                 Downloadable reports and analytics
                                                               •   Retail
                 which allow you to manipulate data
                                                               •   Risk & Security
                 when and how you want to.



www.cbinsights.com
 7                                                 Venture Capital Activity Report | Q4 2011


So Much for VCs Going on Vacation in December
VCs ended the year strong with 264 deals. Every month of 2011 had more than 200
deals and $2.2B invested marking a pretty consistent rate of activity for the full year.




www.cbinsights.com
8                                             Venture Capital Activity Report | Q4 2011


The Series B and C Crunch? Yeah, That’s Looking Likely
Seed and Series A were almost 50% of deals making Series B and beyond a potential
chokepoint for many companies raising early stage money.




www.cbinsights.com
 9                                               Venture Capital Activity Report | Q4 2011


Healthcare Deals and Dollars Show Some Life
After a three quarter slide on deals, healthcare investment regained in Q4’11. Mobile
remained strong on both deals and dollars for a 2nd straight quarter.




www.cbinsights.com
10                                              Venture Capital Activity Report | Q4 2011


Get Started for Free with CB Insights
Basic membership on CB Insights is free. Just visit http://www.cbinsights.com. Or
connect with us via any of the following.




                Twitter                          Newsletter
                Follow us @cbinsights            Click here to receive our weekly
                                                 dealflow newsletter.




                Email                            Telephone
                                                 212-292-3148
                info@cbinsights.com




www.cbinsights.com
11                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     INTERNET




www.cbinsights.com
12                                             Venture Capital Activity Report | Q4 2011


Internet Investment Comes Back to Earth After Torrid Q3
Web companies took over $10.5B of venture funding in 2011 representing over 1/3 of




                                                                                           Internet
total VC investment.




www.cbinsights.com
13                                              Venture Capital Activity Report | Q4 2011


Cali Dominates Net Deals & Dollars and NY Solid at #2
NY’s thriving internet ecosystem holds strong and nearly doubles Mass on # of deals.




                                                                                            Internet
Washington DC shows strength on dollars on back of LivingSocial mega-deal.




                                                                Quarter Highlights

                                                                283 deals | $2,514M

                                                                Top Deals
                                                                 Dropbox
                                                                 LivingSocial
                                                                 WhaleShark Media
                                                                 Box.net



                                                                Top Cities
                                                                 San Francisco, CA
                                                                  53 deals | $564M
                                                                 New York, NY
                                                                  40 deals | $362M
                                                                 Washington, DC
                                                                  6 deals | $207M
                                                                 Austin, TX
                                                                  5 deals | $164M
                                                                 Palo Alto, CA
                                                                  11 deals | $147M
                                                                 Redwood City, CA
                                                                  7 deals | $146M
                                                                 Mountain View, CA
                                                                  10 deals | $89M
                                                                 San Mateo, CA
                                                                  5 deals | $85M
                                                                 Boston, MA
                                                                  6 deals | $69M
                                                                 Burlingame, CA
                                                                  2 deals | $46M




www.cbinsights.com
14                                                Venture Capital Activity Report | Q4 2011


Deal/Dollar Share In Line With Historical Levels
NY’s ascent of Q3’11 didn’t continue, but the state still was the clear #2.




                                                                                              Internet
Massachusetts falls to 5 quarter low on share of internet deals.




www.cbinsights.com
15                                           Venture Capital Activity Report | Q4 2011


Seed and Series A Momentum Stays Strong
Seed deals in web companies maintained record levels, and Series A showed an




                                                                                         Internet
uptick. Series B and C deals both declined on deal share.




www.cbinsights.com
16                                              Venture Capital Activity Report | Q4 2011


Dropbox and Box.net Garner Data Storage Big Dollars
Deal and dollar distribution remains diverse with some new areas like business




                                                                                            Internet
intelligence, analytics and video showing deal strength.




www.cbinsights.com
17                                               Venture Capital Activity Report | Q4 2011


Internet Medians Drop Across the Board
While not dramatically declining, the internet sector did see median deal values drop




                                                                                             Internet
across-the-board on a sequential basis.




www.cbinsights.com
18                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     HEALTHCARE




www.cbinsights.com
19                                               Venture Capital Activity Report | Q4 2011


What Healthcare VC Decline?




                                                                                             Healthcare
After three quarters of declining deal volume, healthcare re-emerged with strong
dealflow and the highest venture funding tally of the last five quarters.




www.cbinsights.com
20                                            Venture Capital Activity Report | Q4 2011


Mass and Cali Retain Dominance of Healthcare Sector




                                                                                                Healthcare
California and Massachusetts combine for 50% of deal share and 67% of dollars. The
rest of the field is fragmented as is typical.




                                                              Quarter Highlights

                                                              172 deals | $1,895M

                                                              Top Deals
                                                               Portola Pharmaceuticals
                                                               Agios Pharmaceuticals
                                                               Rempex Pharmaceuticals
                                                               Sensors for Medicine & Science
                                                               Dermira
                                                               Cleave Biosciences


                                                              Top Cities
                                                               Cambridge, MA
                                                                 13 deals | $262M
                                                               San Diego, CA
                                                                 14 deals | $172M
                                                               South San Francisco, CA
                                                                 3 deals | $106M
                                                               Boston, MA
                                                                 4 deals | $80M
                                                               Redwood City, CA
                                                                 2 deals | $74M
                                                               Germantown, MD
                                                                 1 deals | $54M
                                                               Irvine, CA
                                                                 3 deals | $51M
                                                               New York, NY
                                                                 3 deals | $47M
                                                               Watertown, MA
                                                                 4 deals | $44M
                                                               Burlingame, CA
                                                                 1 deals | $42M




www.cbinsights.com
21                                                Venture Capital Activity Report | Q4 2011


Cali Slides to Five Quarter Low on Deal Share




                                                                                              Healthcare
Overall, venture deal and dollar share stays within its historical bounds.




www.cbinsights.com
22                                             Venture Capital Activity Report | Q4 2011


Healthcare Sees Series A Deals Win the Quarter




                                                                                           Healthcare
Healthcare VCs committed significant deal volume and funding to Series A deals.
Series B was weak on both fronts. Is a Series B crunch which is discussed on the
tech front also going to hit healthcare?




www.cbinsights.com
23                                                Venture Capital Activity Report | Q4 2011


Medical Devices, Pharma and Biotech Rule Q4




                                                                                              Healthcare
Medical devices continue their leading position for deals and dollars within the
Healthcare sector, followed by strong quarters for both Pharma and Biotech.




www.cbinsights.com
24                                              Venture Capital Activity Report | Q4 2011


Healthcare Medians Come Down Across the Board in Q4




                                                                                            Healthcare
Across all stages, medians declined. Funding strength in healthcare in Q4’11 driven
by healthy deal volume.




www.cbinsights.com
25                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     GREEN & CLEAN TECH




www.cbinsights.com
26                                              Venture Capital Activity Report | Q4 2011


Green Tech Deals and Dollars Maintain Levels
Q4 sees funding levels exceed $1B in Q4’11 and in-line with Q3’11. Relative to Q4’10,




                                                                                            Green
deals were up 17% and funding was up 62%.




www.cbinsights.com
27                                              Venture Capital Activity Report | Q4 2011


Texas Green Tech Deals Down but Funding Share Way Up
Cali remains the overwhelming leader in terms of Green Tech deals and dollars. Texas




                                                                                            Green
shows funding strength on back of large Green Tech investment into




                                                                Quarter Highlights

                                                                69 deals | $1,281M

                                                                Top Deals
                                                                 Better Place
                                                                 Stion
                                                                 Soraa
                                                                 eRecyclingCorps



                                                                Top Cities
                                                                 Irving, TX
                                                                   2 deals | $206M
                                                                 Palo Alto, CA
                                                                   1 deals | $200M
                                                                 San Jose, CA
                                                                   2 deals | $145M
                                                                 Sunnyvale, CA
                                                                   5 deals | $97M
                                                                 Fremont, CA
                                                                   3 deals | $68M
                                                                 Tucson, AZ
                                                                   1 deals | $50M
                                                                 Westborough, MA
                                                                   2 deals | $31M
                                                                 Orem, UT
                                                                   1 deals | $30M
                                                                 Ashland, OR
                                                                   1 deals | $28M
                                                                 Santa Monica, CA
                                                                   1 deals | $27M




www.cbinsights.com
28                                            Venture Capital Activity Report | Q4 2011


Cali and Texas Take 75% of Green Tech Dollars
Deal share across states remains consistent. Mega-deals in Cali and Texas have




                                                                                          Green
them eating up most of Green Tech funding in Q4.




www.cbinsights.com
29                                            Venture Capital Activity Report | Q4 2011


Early Stage Green Tech Deals Hit 5-Quarter High
After Q3’11’s early stage investment beatdown, Q4’11 sees a resurgence with 40% of




                                                                                          Green
deals going to Seed and Series A.




www.cbinsights.com
30                                              Venture Capital Activity Report | Q4 2011


Renewables Hits Five Quarter Low on Deal Share
Renewables retains top spot, but sees new 5-quarter low in terms of deal share.




                                                                                            Green
Energy Efficiency technology has a strong quarter with a number of smaller deals.




www.cbinsights.com
31                                             Venture Capital Activity Report | Q4 2011


Green Tech Median Deal Values Generally Decline
Overall and across most stages, median deal values dropped with the exception of




                                                                                           Green
Series D. The reduction in investment in renewables helped to drop medians across the
board.




www.cbinsights.com
32                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     CALIFORNIA




www.cbinsights.com
33                                                         Venture Capital Activity Report | Q4 2011


What Smart Investors, Bankers and
Wealth Managers Use to Get Ahead…
With CB Insights you can access deep private company info that was once exclusively
available behind prohibitively expensive paywalls.


CB Insights is accessible for free by visiting http://www.cbinsights.com


 82,000+ Private Company Profiles.                             Coverage Universe
                 Over 82,000 high value private
                 company profiles across industries and        •   Venture Capital – 1999 to present
                 sectors. Medical devices to                   •   Angel Investment
                 mobile. Industrial to internet.               •   Private Equity
                                                               •   Federal SBIR Grants – 3 years
                                                               •   State Grant Programs
 From Angel to Private Equity.                                 •   Incubators – Over 300
                 Angel investment to venture capital to        •   Middle Market Private Companies
                 private equity to government funding to
                 under the radar mid-market private            Sector Coverage
                 companies.
                                                               •   Green/clean tech
                                                               •   Internet
 Company & Investor Updates via Email.                         •   Mobile & Telecom
                                                               •   Software
                 Add companies and investors of                •   Energy & Utilities
                 interest to your CBI Watchlist and get        •   Computer Hardware & Services
                 notified of changes and updates               •   Healthcare
                 automatically.                                •   Industrial
                                                               •   Automotive & Transportation
 Management & Board Information                                •   Business Products & Services
                                                               •   Consumer Products & Services
                 Find out about the people behind the          •   Electronics
                 companies including management and            •   Environmental Services &
                 board of directors profiles.                      Equipment
                                                               •   Financial Services
                                                               •   Food & Beverages
                                                               •   Leisure
 Analytics & Reporting                                         •   Media
                                                               •   Metals & Mining
                 Downloadable reports and analytics
                                                               •   Retail
                 which allow you to manipulate data
                                                               •   Risk & Security
                 when and how you want to.



www.cbinsights.com
34                                                 Venture Capital Activity Report | Q4 2011


The Golden State – Steady as Ever
California stays within its recent historical ranges on both deals and dollars. Versus




                                                                                               California
Q4’10, deals were down 3% and funding was up 45%.




www.cbinsights.com
35                                              Venture Capital Activity Report | Q4 2011


Mega Deals Across Sectors Maintain Funding Balance




                                                                                            California
On the deal side, Internet and Healthcare combine for 57% of deal share.




                                                                Quarter Highlights

                                                                300 deals | $3,836M

                                                                Top Sector
                                                                  # of Deals – Internet
                                                                  $ of Funding – Internet

                                                                Top Deals
                                                                 Dropbox
                                                                 Better Place
                                                                 Stion
                                                                 Prysm
                                                                 Portola Pharmaceuticals


                                                                Top Cities
                                                                San Francisco
                                                                  80 deals | $818M
                                                                Palo Alto
                                                                  29 deals | $529M
                                                                San Jose
                                                                  12 deals | $355M
                                                                Redwood City
                                                                  12 deals | $313M
                                                                Fremont
                                                                  7 deals | $212M
                                                                San Diego
                                                                  19 deals | $195M
                                                                Sunnyvale
                                                                  10 deals | $143M
                                                                Mountain View
                                                                  15 deals | $124M
                                                                South San Francisco
                                                                  5 deals | $121M
                                                                Menlo Park
                                                                  13 deals | $119M




www.cbinsights.com
36                                                Venture Capital Activity Report | Q4 2011


Healthcare Gains Modestly on Deals & Dollars in Cali
No violent shifts in deal or funding share for Cali during Q4’11. Quarter continued




                                                                                              California
demonstration of Cali’s balanced VC landscape.




www.cbinsights.com
37                                            Venture Capital Activity Report | Q4 2011


Early Stage Dealflow Hits Five Quarter High
Seed and Series A grow in number hitting 45% of deals. Series B and beyond




                                                                                          California
comparable to prior quarter ranges on both deals and funding.




www.cbinsights.com
38                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     MASSACHUSETTS




www.cbinsights.com
39                                              Venture Capital Activity Report | Q4 2011




                                                                                            Massachusetts
Patriot Nation Hits Five Quarter High on Deals
After Q3’11s blah funding total, Q4’11 registers a 35% sequential increase and 52%
year over year increase on funding. Deals were up 12% sequentially and 19% year
over year.




www.cbinsights.com
40                                                Venture Capital Activity Report | Q4 2011




                                                                                                Massachusetts
Healthcare Wins on Both Deals and Dollars in Mass
Healthcare activity in Mass stays strong. Internet took back the #2 spot for funding
from Energy.




                                                                  Quarter Highlights

                                                                  93 deals | $959M

                                                                  Top Sector
                                                                    # of Deals – Healthcare
                                                                    $ of Funding - Healthcare

                                                                  Top Deals
                                                                   Agios Pharmaceuticals
                                                                   Rapid7
                                                                   Cyber-Ark Software
                                                                   Zink
                                                                   SAGE Therapeutics

                                                                  Top Cities
                                                                   Cambridge
                                                                    27 deals | $312M
                                                                   Boston
                                                                    16 deals | $169M
                                                                   Waltham
                                                                    10 deals | $123M
                                                                   Newton
                                                                    6 deals | $83M
                                                                   Westborough
                                                                    5 deals | $47M
                                                                   Watertown
                                                                    4 deals | $44M
                                                                   Bedford
                                                                    1 deals | $35M
                                                                   Charlestown
                                                                    1 deals | $18M
                                                                   Southborough
                                                                    1 deals | $17M
                                                                   Woburn
                                                                    2 deals | $16M




www.cbinsights.com
41                                               Venture Capital Activity Report | Q4 2011




                                                                                             Massachusetts
Internet Deals Hit Five-Quarter Low in Mass
Four out of ten deals and one out of two VC dollars in Mass went to healthcare
companies. Internet deal share hits a low watermark.




www.cbinsights.com
42                                              Venture Capital Activity Report | Q4 2011




                                                                                            Massachusetts
Early Stage Hits 5-Quarter High in Massachusetts
Seed and Series A combine for 42% of deals tying with levels seen in Q2’11. Larger
Series A deals primarily in healthcare drove funding share of Series A rounds to
highest level in five quarters.




www.cbinsights.com
43                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     NEW YORK




www.cbinsights.com
44                                              Venture Capital Activity Report | Q4 2011


As the Jets Go, So Does New York’s VC Scene?




                                                                                            New York
After a breakout Q3’11 where NY took the #2 spot for overall VC, NY dipped but
remained strong still ahead on both deals and dollars vs. Q4’10.




www.cbinsights.com
45                                              Venture Capital Activity Report | Q4 2011


Get Started for Free with CB Insights
Basic membership on CB Insights is free. Just visit http://www.cbinsights.com. Or
connect with us via any of the following.




                Twitter                          Newsletter
                Follow us @cbinsights            Click here to receive our weekly
                                                 dealflow newsletter.




                Email                            Telephone
                                                 212-292-3148
                info@cbinsights.com




www.cbinsights.com
46                                               Venture Capital Activity Report | Q4 2011


Internet Still Rules, but Mobile and Healthcare Show Life




                                                                                             New York
Internet continues to command the lion’s share of deals and dollars, but Mobile deals
register volume and Healthcare consumes serious dollars in Q4.




                                                                 Quarter Highlights

                                                                 73 deals | $568M

                                                                 Top Sector
                                                                   # of Deals – Internet
                                                                   $ of Funding - Internet

                                                                 Top Deals
                                                                  Fab.com
                                                                  Imagen Biotech
                                                                  Outbrain
                                                                  Knewton


                                                                 Top Cities
                                                                  New York
                                                                    61 deals | $491M
                                                                  Buffalo
                                                                    2 deals | $37M
                                                                  Ithaca
                                                                    3 deals | $28M
                                                                  Brooklyn
                                                                    5 deals | $7M
                                                                  Highland
                                                                    1 deals | $4M




www.cbinsights.com
47                                              Venture Capital Activity Report | Q4 2011


Internet Share Shrinks in Terms of Both Deals and Dollars




                                                                                            New York
Mobile deals see a jump in Q4, reclaiming share of deal volume experienced in Q2.
Healthcare experiences 5-quarter high in terms of dollar share.




www.cbinsights.com
48                                           Venture Capital Activity Report | Q4 2011


NY Early Stage Experiences Considerable Jump in Q4




                                                                                         New York
Following two relative weak quarters, early stage reclaims share in NY with
Seed/Series A commanding 60% of deal volume and nearly 40% of investment in Q4.




www.cbinsights.com
49                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     WASHINGTON




www.cbinsights.com
50                                               Venture Capital Activity Report | Q4 2011


In Q4, Washington Fails to Build on Recent Momentum




                                                                                             Washington
Venture deal volume in Washington was down for a third straight quarter, while
investment dollars fall substantially after showing some pep in Q3.




www.cbinsights.com
51                                                 Venture Capital Activity Report | Q4 2011


Internet and Healthcare Continue to Dominate in Washington




                                                                                               Washington
Internet and Healthcare split venture investment dollars fairly evenly, while Mobile
convincingly occupied the third spot.




                                                                   Quarter Highlights

                                                                   24 deals | $146M

                                                                   Top Sector
                                                                     # of Deals – Internet
                                                                     $ of Funding - Internet

                                                                   Top Deals
                                                                    NanoString Technologies
                                                                    adSage
                                                                    RedFin
                                                                    Zaarly
                                                                    DreamBox


                                                                   Top Cities
                                                                    Seattle
                                                                      15 deals | $92M
                                                                    Bellevue
                                                                      3 deals | $32M
                                                                    Redmond
                                                                      2 deals | $8M
                                                                    Bothell
                                                                      1 deals | $8M
                                                                    Issaquah
                                                                      1 deals | $3M
                                                                    Kirkland
                                                                      1 deals | $2M




www.cbinsights.com
52                                                 Venture Capital Activity Report | Q4 2011


Healthcare Grows Share for Third Straight Quarter




                                                                                               Washington
Healthcare continues its tear, as both deal volume and investment dollars grow share
for the third straight quarter. Could it unseat Internet for top spot in the near future?




www.cbinsights.com
53                                               Venture Capital Activity Report | Q4 2011


Early Stage Investing Roars Back in Washington




                                                                                             Washington
Seed maintains its share of deals while Series A quadruples its share of deal volume
versus Q3. Early stage commands nearly 60% of overall deal volume.




www.cbinsights.com
54                             Venture Capital Activity Report | Q4 2011




     Q4 2011 Venture Capital

     TEXAS




www.cbinsights.com
55                                               Venture Capital Activity Report | Q4 2011


Dollars Up, Deals Down in the Lone Star State




                                                                                             Texas
Texas experiences a substantial dip in deal volume in Q4, but investment dollars pop
on the backs of large deals.




www.cbinsights.com
56                                                Venture Capital Activity Report | Q4 2011


Energy Takes a Back Seat; Mobile Owns 50%+ of Dollars




                                                                                                     Texas
Texas maintains sector diversity in Q4 in terms of deal volume, with Energy taking a
distant fifth seat. Mobile & Telecommunications swallows over half of dollars invested.




                                                                  Quarter Highlights

                                                                  24 deals | $476M

                                                                  Top Sector
                                                                    # of Deals – Internet
                                                                    $ of Funding – Energy & Utils.

                                                                  Top Deals
                                                                   WhaleShark Media
                                                                   eRecyclingCorps
                                                                   Xtera Communications
                                                                   Inova Labs
                                                                   MedMark Services

                                                                  Top Cities
                                                                   Austin
                                                                     13 deals | $208M
                                                                   Irving
                                                                     2 deals | $206M
                                                                   Allen
                                                                     1 deals | $30M
                                                                   Lewisville
                                                                     1 deals | $11M
                                                                   Dallas
                                                                     3 deals | $11M
                                                                   San Antonio
                                                                     1 deals | $4M
                                                                   Houston
                                                                     2 deals | $4M
                                                                   Richardson
                                                                     1 deals | $2M




www.cbinsights.com
57                                                Venture Capital Activity Report | Q4 2011


Energy Investment Dollars Disappear in Q4




                                                                                              Texas
Only a quarter after owning more than one-third of venture dollars invested in Texas,
Energy falls off the map. Mobile explodes; Internet also grows share.




www.cbinsights.com
58                                            Venture Capital Activity Report | Q4 2011

Early Stage Investment Regains Momentum in Texas




                                                                                          Texas
Seed VC deal volume comes back down to earth, but Series A explodes as early stage
commands 43% of overall deal volume.




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59                                                                     Venture Capital Activity Report | Q4 2011


Definitions – Ensuring Data Integrity
What’s Included in our Quarterly Venture Capital Numbers? What is not?

Given the importance of venture capital in spurring innovation and entrepreneurship, measuring venture capital activity
accurately is important. We encourage you to review the methodology and definitions employed by us to better
understand the numbers presented in this report. If you have any questions about our definitions or methodological
principles, we encourage you to reach out to us directly.


 What is included?                                              What is excluded?

• Equity financings into emerging companies.                    • Angel investment. These are not included in
  Funding must come from venture capital firms including          numbers unless an investment round included Angels
  corporate venture groups.                                       investing alongside a venture capital firm or corporate
• Fundings of only private companies. Public                      venture group.
  companies of any kind on any exchange (including Pink         • No contingent funding. If a company receives a
  Sheets) are excluded from our numbers even if they              commitment for $20M subject to hitting certain
  received investment by a venture firm(s)                        milestones but first gets $8M, only the $8M is included
• Companies must be headquartered in the USA. Our                 in our data.
  geographic data is based on the city and state where the      • No business development/R&D arrangements
  company receiving investment is headquartered. If a             whether transferable into equity now, later or
  company has a satellite office/presence in multiple cities      never. If a company signs a $300M R&D partnership
  or was founded in a particular city but has moved its HQ,       with a larger corporation, this is not equity financing
  our results reflect only this HQ address.                       nor is it from venture capital firms. As a result, it is not
• Only include the investment made in the quarter for             included.
  tranched investments. If a company does a second              • Buyouts, Consolidations and Recapitalizations.
  closing of its Series B round for $5M and previously had        All three of these of transaction types are commonly
  closed $2M in a prior quarter, only the $5M is reflected        employed by private equity firms and are tracked by
  in our results.                                                 CB Insights. However, they are excluded for the
• Round #s reflect what has closed – not what is                  purposes of this report. Private equity investments into
  intended. If a company indicates the closing of $5M out         companies which may have received venture capital
  of a desired raise of $15M, our numbers reflect only the        investment prior are also not included.
  amount which has closed.                                      • Private placements. These investments also known
• Only verifiable fundings are included. Fundings are             as PIPEs (Private Investment in Public Equities) even
  verified via (1) various federal & state regulatory filings     if made by a venture capital firm(s) are not included.
  (2) direct confirmation with firm or investor or (3) press    • Debt/loans of any kind. Venture debt or any kind of
  release.                                                        debt/loan issued to emerging, startup companies even
• Funding close date matters. Fundings are provided               if included as an additional part of an equity financing
  based on funding close date and not on announcement             is not included. If a company receives $3M with $2M
  date.                                                           from venture investors and $1M in debt, only the $2M
                                                                  is included in these statistics.
                                                                • Government funding. Grants, loans, equity
                                                                  financings by the federal government, state agencies
                                                                  or public-private partnerships to emerging, startup
                                                                  companies are not included. Strictly venture or
                                                                  corporate venture outfits.
                                                                • Incubator investments. Investments of money as
                                                                  equity or debt and/or services by incubators are not
                                                                  included.
                                                                • Strategic corporate investments. Corporations
                                                                  making strategic investments in companies but not as
                                                                  part of a specific organized venture group are not
                                                                  included.



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60                                                         Venture Capital Activity Report | Q4 2011


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61                                              Venture Capital Activity Report | Q4 2011


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Description: Venture capitalists invested $7.6 billion in 755 companies in Q4 2011. Q4’s performance brought 2011’s total to $30.6B invested in 3051 deals which marked a 10-year high for the VC asset class on both deals and dollars.