*MoneyTree survey
PricewaterhouseCoopers Thomson Venture Economics National Venture Capital Association
TM
2 0 0 5 results
US Report
Q1
The Q1 2005 MoneyTree™ results are in! This special report provides summary results of Q1 2004, Q4 2004, and Q1 2005. More detailed results, including an expanded version of this report, can be found on the MoneyTree™ Web site at www.pwcmoneytree.com.
Directory:
Tracy T. Lefteroff tracy.t.lefteroff@us.pwc.com Kirk Walden kirk.walden@us.pwc.com
Total equity investments into venture-backed companies
Venture capitalists invested $4.6 billion in 674 companies in the first quarter of 2005. While funding was below Q4 2004’s $5.4 billion, it matched the Q3 2004 investment level of $4.6 billion. Over the past two years, quarterly investing has floated between $4.4 billion and $5.9 billion. The 674 investments made in Q1 2005 represent a decrease of 13% from fourth quarter activity, but is comparable to deal flow during Q1 2004 when 665 investments were made.
1999
30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0
2000 Q4 Q1 Q2 Q3 Q4 Q1 28.113 26.367 22.459
2001 Q2 Q3 Q4 Q1
2002 Q2 Q3 Q4 Q1
2003 Q2 Q3 Q4 Q1
2004 Q2 Q3 Q4
2005 Q1
Q1
Q2
Q3
27.919 23.274
($ in billions)
10.615 13.088
11.340 13.046 8.026 8.421 5.927 6.675 4.570 4.367 4.235 703 673 714 4.825 4.653 5.502 5.027 5.952 4.580 5.439 4.628
6.596
897 1,270 1,392 1,842 2,083 2,091 1,924 1,734 1,277 1,220 990
963 819
832
683
693
754
665
798
644
776
674
(Total # of deals)
*connectedthinking
US Report
Q1 MoneyTree
2 0 0 5 results
TM
Investments by industry Q1 2004, Q4 2004, and Q1 2005
After two years of dominance, the Life Sciences sector (Biotechnology and Medical Devices industries together) fell significantly in Q1 2005 to $1.1 billion, compared to $1.6 billion in Q4 2004, and the lowest amount since Q1 2003. The Software industry remained the largest single industry category with 198 companies capturing $1.1 billion. Telecommunications investing continued to slide with 58 companies garnering $371 million, well below its average over the last two years. The Networking industry turned up slightly to $348 million in 40 companies. Other major industry categories were generally consistent with investment activity seen over the prior year.
($ in millions) # of deals
0
100
200
300
400
500
600
Software Biotechnology Medical Devices & Equipment
198 239 201 68 98 67 61 64 58 51 66 54 58 50 61 40 41 50 37 44 31 36 33 17 24 33 35 20 20 11 12 14 16 13 17 16 21 14 7 16 15 18 9 18 12 9 8 11 1 0.0 2 0.6 0 0.0 674 776 665
# of deals
1,094.6 1,344.2 1,295.9 631.6 1,196.3 916.8 412.0 375.2 444.6
343.8
Semiconductors Telecommunications Networking & Equipment
520.0 537.4
325.9
370.6 506.3
347.7 322.7 302.4
411.9
IT Services Media & Entertainment Industrial/Energy
191.6 208.0 263.2 87.2 148.9 142.4 143.8 109.3 80.8 85.9 103.6 83.8 105.6 75.7 52.3 67.5 60.6 125.7 104.8 213.2 188.8
309.5
Financial Services Computers & Peripherals
64.4
140.0
Healthcare Services Electronics/Instrumentation Business Products & Services
52.1
21.6
Q1 05 Q4 04 Q1 04
Consumer Products & Services
Retailing/Distribution Undisclosed/Other Grand Total
27.0
56.0
80.8
4,627.5 5,439.4 5,027.1
0 100 200 300 400 500 600
($ in millions)
Definitions of the Industry categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com. Data is current as of April 26, 2005. PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTree™ survey has been obtained from reliable sources. However, none of the parties can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time. ©2005 PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ survey. ©2005 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to the PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
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Investments by stage of development Q1 2004, Q4 2004, and Q1 2005
Funding by stage of development saw Later stage decrease slightly in Q1 2005 to $1.8 billion. This amount still represented 40% of all venture capital, the same proportion as last quarter and a 10-year high. Investing in Expansion stage companies dropped slightly from the prior quarter to $2.0 billion in Q1 2005. This represented 43% of all venture capital, slightly below the average over the past year. Of particular note, the 16% of all venture capital investing going to Early stage companies in Q1 2005 fell only slightly from the 18% in the prior quarter. The dollar amount of funding decreased to $752 million in Q1 2005 versus $958 million in Q4 2004. A total of 200 Early stage companies received funding, representing 30% of all deals, the same proportion seen in the last year.
($ in millions) # of deals
0 74.9 110.8 67.1
500
1,000
1,500
Startup/Seed
32 42 36 200 212 198 267 312 290 175 210 141 674 776 665
# of deals
Q1 05
Q4 04
Q1 04
752.3 958.3 877.4 1,969.4 2,188.6 2,447.3 1,830.9 2,181.6 1,635.4 4,627.5 5,439.4 5,027.1 0 500 1,000
($ in millions)
Early
Expansion
Later
Total
1,500
Definitions of the stage of development categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com.
Investments by sequence of financing Q1 2004, Q4 2004, and Q1 2005
First-time financings have been trending slightly upward over the last two years. The increase to $1.2 billion in the first quarter compared to an average of $1.1 billion last year is notable in that it accounts for 26% of all venture capital funding compared to 21% last year. This was the highest proportion since 2000. Companies receiving follow-on financing experienced a proportional decline in investments during the first quarter mirroring the overall downturn in investing.
($ in millions) # of deals
0
500
1,000 1,221.1 1,153.2 1,006.1
1,500
First
197 223 176 245 243 231 158 231 194 74 79 64 674 776 665
# of deals
Second & Third
1,742.1 1,901.8 1,684.9 1,291.8 1,913.2 1,984.1 372.6 471.2 352.1
Fourth, Fifth, & Sixth
Seventh & Beyond
Q1 05
Q4 04
Q1 04
4,627.5 5,439.4 5,027.1
Total
0
500
1,000
($ in millions)
1,500
Definitions of the sequence of financing categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com. Data is current as of April 26, 2005. PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTree™ survey has been obtained from reliable sources. However, none of the parties can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time. ©2005 PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ survey. ©2005 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to the PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
Q1 2005 MoneyTreeTM survey
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US Report
Q1 MoneyTree
2 0 0 5 results
TM
Q1 2005 most active venture investors
The most active venture investors in the U.S. closed four or more deals each in Q1 2005. Of the more than 1,850 transactions reported in Q1 2005, the most active firms accounted for 805, or 43% of all investments. The top 13 firms accounted for almost 10% of the deals completed in the quarter. U.S. Venture Partners topped the list with a total of 20 deals, with Draper Fisher Jurvetson coming in second having made 18 investments during the quarter. TL Ventures, Accel Partners, Venrock Associates, and Austin Ventures were also among the most active investors in the first quarter, reporting 14 or more deals each.
Location Menlo Park, CA Menlo Park, CA Wayne, PA Palo Alto, CA New York, NY Austin, TX Baltimore, MD Williamstown, MA Menlo Park, CA Waltham, MA Menlo Park, CA San Mateo, CA Dallas, TX Larchmont, NY Waltham, MA Menlo Park, CA Palo Alto, CA Menlo Park, CA Palo Alto, CA Waltham, MA Boston, MA Palo Alto, CA Menlo Park, CA Rowayton, CT Chicago, IL Eden Prairie, MN Menlo Park, CA Menlo Park, CA Menlo Park, CA Cincinnati, OH Wayne, PA Santa Clara, CA Lexington, MA Waltham, MA Boston, MA Boston, MA Waltham, MA Boston, MA Menlo Park, CA Menlo Park, CA San Francisco, CA Waltham, MA Princeton, NJ Alexandria, VA Wellesley, MA Portola Valley, CA Menlo Park, CA Bethesda, MD San Francisco, CA Boston, MA Menlo Park, CA Boston, MA New York, NY Palo Alto, CA Westwood, MA New York, NY Palo Alto, CA Philadelphia, PA Denver, CO Seattle, WA Westport, CT # of Deals 20 18 15 14 14 14 13 13 12 12 12 11 11 10 10 10 10 10 10 9 9 9 9 9 8 8 8 8 8 8 8 8 8 8 7 7 7 7 7 7 7 7 7 7 7 7 7 7 6 6 6 6 6 6 6 6 6 6 5 5 5 # of Location Deals Motorola Ventures Schaumburg, IL 5 Mission Ventures San Diego, CA 5 Maryland Technology Development Corporation (TEDCO) Columbia, MD 5 Maryland Dept. of Business & Economic Development Baltimore, MD 5 Imlay Investments Atlanta, GA 5 5 INVESCO Private Capital New York, NY HIG Capital Management Miami, FL 5 5 General Catalyst Partners Cambridge, MA Voyager Capital Seattle, WA 5 The Venture Capital Fund of New England Wellesley, MA 5 5 Valhalla Partners Vienna, VA Trident Capital Palo Alto, CA 5 5 Sierra Ventures Menlo Park, CA River Cities Capital Funds Cincinnati, OH 5 Prospect Venture Partners Palo Alto, CA 5 5 Palomar Ventures Santa Monica, CA vSpring Capital Salt Lake City, UT 5 5 Wasatch Venture Fund Salt Lake City, UT Walden International San Francisco, CA 5 Foundation Capital Menlo Park, CA 5 5 CenterPoint Venture Partners Dallas, TX BA Venture Partners Foster City, CA 5 5 The Carlyle Group Washington, DC Duchossois Technology Partners Elmhurst, IL 5 3i (US) Waltham, MA 4 Alloy Ventures Palo Alto, CA 4 ArrowPath Venture Capital Redwood City, CA 4 Sequel Venture Partners Boulder, CO 4 STARTech Richardson, TX 4 S.R. One, Limited West Conshohocken, PA 4 PA Early Stage Wayne, PA 4 Investor Growth Capital, Inc. New York, NY 4 Intersouth Partners Durham, NC 4 Gabriel Venture Partners Redwood Shores, CA 4 FreshTracks Capital Middlebury, VT 4 Flagship Ventures Cambridge, MA 4 First Analysis Corp. Chicago, IL 4 Versant Ventures Menlo Park, CA 4 Technology Partners Palo Alto, CA 4 TPG Ventures Menlo Park, CA 4 4 SpaceVest Reston, VA Fidelity Ventures Boston, MA 4 4 Essex Woodlands Health Ventures Chicago, IL Edison Venture Fund Lawrenceville, NJ 4 Clearstone Venture Partners Santa Monica, CA 4 4 Centennial Ventures Denver, CO CMEA Ventures San Francisco, CA 4 4 CID Equity Partners Indianapolis, IN Boulder Ventures Owings Mills, MD 4 Northwest Venture Associates Spokane, WA 4 4 Noro-Moseley Partners Atlanta, GA Horizon Ventures Los Altos, CA 4 4 Harris & Harris Group New York, NY HLM Venture Partners Boston, MA 4 Granite Global Ventures Menlo Park, CA 4 4 Goldman, Sachs & Co. New York, NY Global Catalyst Partners Redwood Shores, CA 4 4 Boston Millennia Partners Boston, MA BlueStream Ventures Minneapolis, MN 4 Bay Partners Cupertino, CA 4 4 Acorn Campus Cupertino, CA
U.S. Venture Partners Draper Fisher Jurvetson TL Ventures Accel Partners Venrock Associates Austin Ventures New Enterprise Associates Village Ventures Mayfield Fund Polaris Venture Partners Redpoint Ventures Sanderling Ventures Sevin Rosen Funds Bessemer Venture Partners North Bridge Venture Partners Sequoia Capital Mobius Venture Capital InterWest Partners ComVentures Advanced Technology Ventures SV Life Sciences Advisers Norwest Venture Partners Kleiner Perkins Caufield & Byers Canaan Partners ARCH Venture Partners St. Paul Venture Capital Morgenthaler Ventures Menlo Ventures Benchmark Capital Blue Chip Venture Company EnerTech Capital Intel Capital Highland Capital Partners Charles River Ventures Advent International Bain Capital Matrix Partners MPM Capital Lightspeed Venture Partners Institutional Venture Partners Hummer Winblad Venture Partners Greylock Domain Associates Columbia Capital Battery Ventures Three Arch Partners Sigma Partners Novak Biddle Venture Partners Alta Partners Globespan Capital Partners Cardinal Venture Capital Oxford Bioscience Partners Rho Ventures Sutter Hill Ventures Prism Venture Partners J.P. Morgan Partners Labrador Ventures BioAdvance Appian Ventures Frazier Healthcare and Technology Ventures Oak Investment Partners
Data is current as of April 26, 2005. PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTree™ survey has been obtained from reliable sources. However, none of the parties can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time. ©2005 PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ survey. ©2005 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to the PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
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Investments by region Q1 2004, Q4 2004, and Q1 2005
Despite the overall drop in investing in Q1, four of the top ten regions experienced an increase in the amount invested. Texas investments were up by more than 27%, while the NY Metro region recorded a modest increase of 7% from the prior quarter. Colorado’s investment level doubled from the prior quarter as a result of attracting the single largest Q1 2005 deal. Taken together, the top three regions in Q1 2005—Silicon Valley, New England, and Texas—accounted for 57% of the dollars invested and 49% of the deals reported.
($ in millions)
0
# of deals
100
200
300
400
500
Silicon Valley
204 232 199 87 108 91 41 42 33 37 47 32 37 47 47 50 61 60 36 35 34 37 33 29 17 20 14 32 43 39 30 18 15 19 38 27 19 9 13 14 17 17 5 3 2 4 7 8 1 10 3 3 2 2
16.1 5.5 83.2 95.9 81.5 272.1
1,654.9 1,827.5 1,690.2 614.4 816.1 760.5 345.8
New England
Texas
226.1
LA/Orange County
161.7 275.5 258.2 261.0
329.7 325.3
NY Metro
361.6
419.9 407.0
Southeast
Midwest
180.8 148.8 165.8 180.2 163.8 116.8 139.1
221.8
Northwest
249.8
Colorado
DC/Metroplex
206.2 136.1 181.0 125.4
298.1 291.7
381.5
Philadelphia Metro
San Diego
Southwest
120.6
51.0 54.9
North Central
105.3
144.9
Sacramento/N.Cal
32.0
Upstate NY
12.6 10.9 11.6 12.5 4.7 2.3 1.8 8.1
43.1
Q1 05 Q4 04 Q1 04
South Central
AK/HI/PR
Other U.S.
1 0.4 4 0.8 0 0.0 674 776 665
# of deals
Grand Total
4,627.5 5,439.4 5,027.1
0
100 200 300 400 500
($ in millions)
Data is current as of April 26, 2005. PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTree™ survey has been obtained from reliable sources. However, none of the parties can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time. ©2005 PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ survey. ©2005 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to the PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the context requires, other member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
Q1 2005 MoneyTreeTM survey
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