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					PricewaterhouseCoopers National Venture Capital Association

Data provided by Thomson Financial

Report*

Q4 2008/Full-year 2008
The Q4 2008 MoneyTree™ results are in! This special, expanded report provides detailed results of Q4 2008 as well as comprehensive findings for fullyears 2007 and 2008. More detailed results, including historical data back to 1995, can be found on the MoneyTree™ website at www.pwcmoneytree.com.

*connectedthinking

Total equity investments into venture-backed companies Q1 2001 to Q4 2008

Venture capitalists invested $28.3 billion in 3,808 deals in 2008, marking the first yearly decline of total investments since 2003, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters. Venture investments in 2008 represented an 8 percent decrease in dollars and a 4 percent decrease in deal volume from 2007. Investments in the fourth quarter of 2008 totaled $5.4 billion in 818 deals, the lowest amount of dollars invested since the first quarter of 2005 and a 26 percent drop from the $7.3 billion invested in the third quarter of 2008.
$ in billions 20

The decline in investments over the prior year is spread across industries and stages of development, with some notable exceptions. Dollars invested in the Clean Technology sector grew more than 50 percent in 2008. Companies in the Seed Stage of development also received more money in 2008, reaching the highest level seen since 2000.

15

`01 `02 `03 `04 `05 `06 `07 `08
$12,765 $11,416 $8,325 $8,071 $6,895 $7,578 $6,255 $6,393 $7,119 $6,035 $4,560 $4,520 $4,952$4,867 $4,334 $5,625 $5,930 $4,987 $5,094 $5,898 $5,789 $6,447 $6,736 $6,438 $5,403 $7,360 $7,863 $8,085 $7,866 $7,690 $7,339

10

5

$5,296

0 Q1 Q2 Q3 Q4 Quarter Number of deals (1,283) (1,217) (1,004) (980) Q1 (839) Q2 (853) Q3 (691) Q4 (719) Q1 (701) Q2 (740) Q3 (718) Q4 (785) Q1 (716) Q2 (845) Q3 (691) Q4 (841) Q1 (730) Q2 (826) Q3 (788) Q4 (811) Q1 (872) Q2 (955) Q3 (907) Q4 (941) Q1 Q2 Q3 Q4 Q1 Q2 Q3 (868) (1,040) (993) (1051) (988) (1,043) (959) Q4 (818)

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

2

Investments by industry 2007 to 2008

The Life Sciences sector (Biotechnology and Medical Device industries together) dropped 15 percent in 2008 to $8.0 billion, compared to $9.3 billion invested in 2007. However, the number of Life Sciences deals did not experience as big of a decline, dipping only 3 percent to 853 deals in 2008 from 883 deals in 2007. For the year, Life Sciences accounted for 28 percent of all venture capital invested and retained its position as the number one investment sector for 2008. The annual declines in Software funding were smaller with $4.9 billion invested into 881 companies in 2008, representing declines of 10 percent and 7 percent, respectively, from 2007. For the year, Software remained the largest single industry category both in terms of deals and dollars.
# of Deals 0 1,000 2,000

The Clean Technology sector, which represented seven of the ten largest deals of the year, experienced significant growth in 2008 with $4.1 billion invested in 277 deals. This investment level represents a 54 percent growth in dollars and a 16 percent growth in deal volume over 2007 when $2.7 billion was invested in 238 companies. Clean Technology investing accounting for 15 percent of all venture capital investing in 2008 compared to 9 percent in 2007. Venture investment in Internet-specific companies of $4.9 billion going into 851 deals in 2008 was relatively flat from 2007 when $5.0 billion went into 825 deals. These companies accounted for 17 percent of all venture capital dollars in 2008, approximately the same percentage as in 2007.
3,000 4,000 5,000
$4,919 $3,248 $4,651 $5,239 $4,500 $4,069 $3,460 ($ in millions) All results rounded

6,000

Software Industrial/Energy Biotechnology Medical Devices and Equipment Media and Entertainment IT Services Telecommunications Semiconductors Networking and Equipment Electronics/Instrumentation Financial Services Business Products and Services Consumer Products and Services Computers and Peripherals Retailing/Distribution Healthcare Services Other

944 881 300 345 485 479 398 374 373 407 225 262 296 233 215 180 132 95 94 87 85 74 125 120 101 105 67 66 54 41 52 50 6 9
$4 $15 $1,295 $645 $589 $573 $567 $534 $764 $482 $494 $436 $612 $409 $386 $268 $268 $195 $1,567 $1,832 $2,263 $1,688 $2,085 $1,651 $1,974 $2,039

$5,462

2007 2008

($ in millions) All results rounded

0

10,000

20,000

30,000
30,886 28,298

Grand Total

3,952 3,808

Definitions of the Industry categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

3

Investments by industry Q4 2007, Q3 2008 and Q4 2008

The dip in fourth quarter investing impacted virtually all industries, with the majority of sectors experiencing double-digit percentage declines in both dollars and deals. Life Science funding declines were more pronounced in the fourth quarter of 2008, with dollars going into the sector dropping 33 percent from the third quarter to $1.6 billion and the number of deals dipping to 185, a 22 percent drop from the prior quarter. Software investing dropped in the fourth quarter to $1.0 billion, the lowest quarterly investment level in ten years. The number of deals also declined to 194, the fewest Software companies funded since the second quarter of 1997.
# of Deals 0 250 500

For the fourth quarter, venture capitalists invested $909 million into 62 Clean Technology companies, a 14 percent drop in dollars and 19 percent drop in deals from the third quarter of 2008 when $1.1 billion went into 77 Clean Technology deals. Internet-specific investment fell 26 percent in terms of dollars and 20 percent in terms of deals with $787 million going into 170 deals in the fourth quarter compared to $1.1 billion going into 212 deals in the third quarter of 2008.

750

1000
$1,021

1250
$1,345 $1,300 $1,327 $1,289

($ in millions) All results rounded

1500

Software Biotechnology Industrial/Energy Medical Devices and Equipment Media and Entertainment Telecommunications Semiconductors IT Services Electronics/Instrumentation Networking and Equipment Financial Services Consumer Products and Services Computers and Peripherals Business Products and Services Healthcare Services Retailing/Distribution Other

194 223 245 109 118 137 75 104 85 76 93 101 75 100 101 52 50 70 36 52 48 47 71 68 25 20 18 23 22 34 14 18 17 34 18 39 12 16 25 25 30 34 15 13 15 4 8 11 2 3 3 $1 $11 $4 $52 $51 $42 $56 $34 $54 $86 $116 $85 $90 $81 $235 $93 $167 $87 $154 $114 $162 $149 $185 $211 $262 $244 $338 $432 $411 $387 $531 $394 $465 $442 $475 $496 $550 $814

$1,391

$1,016

$1,022 $947 $1,005

$263

$141

$197

Q4 08 Q3 08 Q4 07

($ in millions) All results rounded

0

2000

4000
$5,403

6000
$7,339

8000
$8,085

Grand total

818 959 1051

Definitions of the Industry categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

4

Investments by stage of development 2007 to 2008

Investments into Seed Stage companies increased substantially in 2008, jumping 19 percent from the prior year to $1.5 billion going into 440 companies, compared to $1.3 billion going into 450 companies during 2007. This marks the highest annual total of dollars captured by Seed Stage companies since 2000. Early Stage investments remained relatively flat in 2008 with $5.3 billion going into 1,013 deals, compared to $5.5 billion invested into 1,036 deals in 2007.

In 2008, $10.8 billion was invested into 1,177 Later Stage deals, declines of 13 percent and 3 percent, respectively. Expansion Stage investments decreased in 2008 with $10.6 billion going into 1,178 deals drops of 9 percent and 6 percent, respectively, from the prior year.

# of Deals 0

2,500

5,000

7,500

10,000
$10,844

12,500
$12,454 $10,604 $11,677

($ in millions) All results rounded

15,000

Later stage Expansion Early stage Startup/seed

1,177 1,207 1,178 1,259 1,013 1,036 440 450 $1,510 $1,268 $5,339 $5,487

2008 2007
($ in millions) All results rounded

0

5,000

10,000

15,000

20,000

25,000
$28,298

30,000
$30,886

Grand total

3,808 3,952

Definitions of the Stage of Development categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

5

Investments by stage of development Q4 2007, Q3 2008 and Q4 2008

Fourth quarter 2008 investments in Early Stage companies dropped 3 percent from the prior quarter to $1.3 billion going into 240 deals, a 4 percent drop from the prior quarter. Despite the drop in funding during the fourth quarter, the percentage of total deals in Seed and Early Stage investments combined was 29 percent in 2008, up from 25 percent in fourth quarter 2007. For the fourth quarter, $1.8 billion went into 235 Later-stage deals, which represent declines of 38 percent and 23 percent, respectively, compared to the third quarter of 2008. Later-stage deals accounted for 34 percent of all deals in the fourth quarter, down from 40 percent in the prior quarter.
# of Deals 0

Expansion funding plunged in the fourth quarter, dropping 25 percent to $2.0 billion from the prior quarter. The number of deals also fell during the quarter, declining 6 percent to 257, down from 273 in the third quarter of 2008. Expansion Stage deals accounted for 37 percent of the total deals in the fourth quarter of 2008 compared to 36 percent in the third quarter.

1,000
$1,837

2,000

3,000
$2,948 $3,021

($ in millions) All results rounded

4,000

Later stage Expansion Early stage Startup/seed

235 306 320 257 273 344 240 249 259 86 131 128 $292 $432 $466 $1,272 $1,307

$2,002

$2,652

Q4 08 Q3 08 Q4 07

$3,052

$1,546

0

2,000

4,000
$5,403

6,000

($ in millions) All results rounded

8,000

Grand total

818 959 1,051

$7,339

$8,085

Definitions of the Stage of Development categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

6

Investments by sequence of financing 2007 to 2008

Dollars going to companies receiving funding for the first time in 2008 dipped 18 percent to $6.1 billion while the number of deals dropped only 10 percent to 1,171. Industries receiving the most dollars in first-time financings in 2008 were Industrial/Energy with 149 deals valued at $1.2 billion, followed by Software with 240 deals for $903 million and Biotechnology with 127 deals for $834 million.
# of Deals 0 2,000 4,000

Fifty-seven percent of first-time financings in 2008 were in the Seed/Early Stage of development, followed by Expansion Stage companies at 27 percent and Later Stage companies at 16 percent.

6,000
$6,142 $7,468

8,000

10,000

($ in millions) All results rounded

12,000

First Second & third Fourth, fifth & sixth Seventh & beyond

1,171 1,299 1,364 1,301 876 938 397 414 $3,825 $3,995

$9,700 $10,204 $8,630 $9,218

2008 2007

0

5,000

10,000

15,000

20,000

25,000
$28,298

30,000
$30,886

Grand total

3,808 3,952

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

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Investments by sequence of financing Q4 2007, Q3 2008 and Q4 2008

First-time financings dollars dropped in the fourth quarter to $1.1 billion, down 28 percent from the prior quarter, the lowest level invested since the first quarter of 2004. The number of companies receiving venture capital for the first time in the fourth quarter also dropped by 17 percent from the prior quarter to 236, the lowest number in three years.

Companies in the Software, Biotechnology and Industrial/Energy industries attracted the highest level of first-time dollars in the fourth quarter. Together, the three industry sectors captured nearly 44 percent of total first-time financing dollars with over $480 million in funding.

# of Deals 0

500

1,000
$1,107

1,500
$1,535 $1,685 $1,766

2,000
$2,096

2,500

($ in millions) All results rounded

3,000

First Second & Third Fourth, fifth & Sixth Seventh & beyond

236 283 353 293 347 345 197 233 232 92 96 121 $844 $846

$2,687 $2,756 $2,201 $2,272

Q4 08 Q3 08 Q4 07

$1,032

0

2,000

4,000
$5,403

6,000

($ in millions) All results rounded

8,000

Grand total

818 959 1,051

$7,339

$8,085

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

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Investments by Region 2007 to 2008

Of the ten regions garnering the largest amounts of venture capital in 2008, only three recorded an increase in funding over the prior year. LA/Orange County chalked up a 23 percent increase in funding, while investment in the Midwest and NY Metro regions rose by11 percent each. Silicon Valley was the top region, attracting 39 percent of total US venture capital followed by New England with

12 percent of the total. Taken together, the top three regions—Silicon Valley, New England, and LA/Orange County—accounted for 57 percent of the dollars invested and 49 percent of the deals reported in 2008.

# of Deals 0

2,000

4,000

6,000

8,000

($ in millions) All results rounded

10,000
$10,980 $11,024

Silicon Valley New England LA/Orange County NY Metro Midwest Texas Southeast San Diego Northwest DC/Metroplex Colorado Philadelphia Metro North Central SouthWest Upstate NY Sacramento/N.Cal South Central AK/HI/PR

1,170 1,239 460 496 237 208 308 258 267 248 146 172 207 246 126 163 208 223 190 211 100 97 140 127 77 84 78 94 29 32 19 16 38 30 8 8 $88 $137 $73 $100 $71 $106 $21 $21 $813 $610 $750 $844 $623 $589 $484 $549 $1,348 $1,216 $1,283 $1,468 $1,240 $2,038 $1,217 $1,992 $1,160 $1,715 $1,015 $1,271 $1,994 $1,620 $1,879 $1,695 $3,260 $3,893

2008 2007

($ in millions) All results rounded

0

7,500

15,000

22,500
$28,298

30,000
$30,886

Grand total

3,808 3,952

Definitions of the Region categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

9

Investments by Region Q4 2007, Q3 2008 and Q4 2008

In the fourth quarter, five of the top ten regions saw a decrease in funding. Only two regions—LA/Orange County and the Southwest—reported an increase in funding when compared to the same time last year. Investment in Silicon Valley was down 31 percent from the third quarter and 33 percent compared to the fourth quarter 2007. New England deals were down 18 percent for both the third quarter 2008 and fourth quarter 2007. Silicon Valley, New England, and NY Metro accounted for 58 percent of the deals reported in the fourth quarter 2008.

# of Deals 0

500

1,000

1,500

2,000
$1,967

2,500

($ in millions) All results rounded

3,000

Silicon Valley New England NY Metro Texas DC/Metroplex Midwest Southeast LA/Orange County San Diego SouthWest Colorado Northwest Philadelphia Metro North Central Sacramento/N.Cal South Central Upstate NY AK/HI/PR

220 312 331 98 120 119 79 77 71 29 37 48 48 45 77 61 67 63 48 53 60 50 60 52 24 24 37 13 18 21 22 25 28 48 45 59 33 37 22 17 17 31 3 7 7 15 9 10 6 5 13 4 1 2 $40 $23 $49 $11 $7 $7 $66 $79 $60 $57 $139 $128 $136 $113 $205 $196 $217 $272 $330 $435 $326 $468 $322 $422 $311 $227 $231 $296 $686 $584 $407 $563 $732 $865

$2,864

$2,945

$954

$280 $277 $434

$209 $302 $277

$525

$100 $106 $94 $222 $211

Q4 08 Q3 08 Q4 07

$29

$1 $12 $10 ($ in millions) All results rounded

0

2,000

4,000
$5,403

6,000
$7,339

8,000
$8,085

Grand total

818 959 1,051

Definitions of the Region categories can be found on the MoneyTree™ Web site at www.pwcmoneytree.com

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

10

Investments by State 2007 to 2008

California dominated in 2008—picking up 50 percent of total venture-backed investments for the year. Massachusetts was a distant second, capturing 11 percent followed by New York and Texas—each attracting 5 percent of total dollars. Over half of the states recorded a loss in 2008 funding when compared to full year 2007.

# of Deals 0

3,000

6,000

9,000

12,000

($ in millions) All results rounded $14,264 $14,735

15,000

California Massachusetts New York Texas Washington Colorado New Jersey Pennsylvania Minnesota Virginia

1,552 1,624 405 446 235 193 146 172 164 175 100 97 90 92 171 158 47 57 81 94 $955 $1,382 $813 $610 $708 $632 $693 $819 $491 $488 $483 $557 $1,299 $1,130 $1,283 $1,468 $2,974 $3,714

2008 2007

($ in millions) All results rounded

0

5,000

10,000

15,000

20,000
$23,963 $25,535

30,000

Top 10 total

2,991 3,110

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

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Most active venture investors Full-Year 2008

The most active US venture firms closed 20 or more deals in 2008. Draper Fisher Jurvetson topped the list of most active venture firms for the full year, completing 96 deals in 2008. New Enterprise Associates and Polaris Venture Partners rounded out the top three firms. For the year, the top 10 firms invested in 7 percent of all the deals completed in 2008.
Firm Draper Fisher Jurvetson New Enterprise Associates Polaris Venture Partners Kleiner Perkins Caufield & Byers Venrock Associates U.S. Venture Partners Intel Capital InterWest Partners Domain Associates LLC Sequoia Capital Sigma Partners Khosla Ventures Advantage Capital Partners Benchmark Capital First Round Capital North Bridge Venture Partners Accel Partners Greylock Partners Advanced Technology Ventures CMEA Ventures Foundation Capital General Catalyst Partners Menlo Ventures Mayfield Fund OVP Venture Partners Canaan Partners Mohr Davidow Ventures Oak Investment Partners Sierra Ventures Battery Ventures, L.P. Duff Ackerman & Goodrich LLC Highland Capital Partners LLC Bessemer Venture Partners Versant Ventures Innovation Works, Inc. Morgenthaler Ventures Prism VentureWorks Redpoint Ventures SV Life Sciences Advisers Alloy Ventures Alta Partners Flagship Ventures Lightspeed Venture Partners Novak Biddle Venture Partners, L.P. Location Menlo Park, CA Baltimore, MD Waltham, MA Menlo Park, CA Palo Alto, CA Menlo Park, CA Santa Clara, CA Menlo Park, CA Princeton, NJ Menlo Park, CA Menlo Park, CA Menlo Park, CA New Orleans, LA Menlo Park, CA West Conshohocken, PA Waltham, MA Palo Alto, CA Waltham, MA Waltham, MA San Francisco, CA Menlo Park, CA Cambridge, MA Menlo Park, CA Menlo Park, CA Kirkland, WA Westport, CT Menlo Park, CA Westport, CT Menlo Park, CA Waltham, MA San Francisco, CA Lexington, MA Larchmont, NY Menlo Park, CA Pittsburgh, PA Menlo Park, CA Needham, MA Menlo Park, CA Boston, MA Palo Alto, CA San Francisco, CA Cambridge, MA Menlo Park, CA Bethesda, MD # of deals 96 82 77 74 60 59 58 54 49 49 48 46 44 44 44 43 40 40 39 39 39 39 38 36 36 35 35 35 35 34 34 34 33 33 32 31 31 31 31 30 30 30 30 30 Firm ARCH Venture Partners Atlas Venture, Ltd. Ben Franklin Technology Partners Southeastern PA Goldman, Sachs & Co. Labrador Ventures Norwest Venture Partners Bay Partners Maryland Technology Development Corporation Edison Venture Fund Frazier Healthcare and Technology Ventures RRE Ventures LLC Trinity Ventures Warburg Pincus LLC Charles River Ventures HealthCare Ventures LLC Sutter Hill Ventures De Novo Ventures Matrix Partners MPM Capital Sanderling Ventures Sevin Rosen Funds Trident Capital Village Ventures Adams Street Partners LLC Flybridge Capital Partners Ignition Partners RAIN Source Capital, Inc. Three Arch Partners Velocity Interactive Group Austin Ventures, L.P. Ben Franklin Technology Partners of Northeastern PA Delphi Ventures Shasta Ventures Management LLC DCM Hummer Winblad Venture Partners Kansas Technology Enterprise Corporation Rustic Canyon Partners TL Ventures Union Square Ventures Burrill & Company FirstMark Capital, LLC Intersouth Partners Sofinnova Ventures Location Chicago, IL Waltham, MA Philadelphia, PA New York, NY Palo Alto, CA Palo Alto, CA Menlo Park, CA Columbia, MD Lawrenceville, NJ Seattle, WA New York, NY Menlo Park, CA New York, NY Waltham, MA Cambridge, MA Palo Alto, CA Palo Alto, CA Waltham, MA Boston, MA San Mateo, CA Dallas, TX Palo Alto, CA Williamstown, MA Chicago, IL Boston, MA Bellevue, WA Saint Paul, MN Portola Valley, CA Palo Alto, CA Austin, TX Bethlehem, PA Menlo Park, CA Menlo Park, CA Menlo Park, CA San Francisco, CA Topeka, KS Santa Monica, CA Wayne, PA New York, NY San Francisco, CA New York, NY Durham, NC San Francisco, CA # of deals 29 29 29 29 29 29 28 28 27 27 27 27 27 26 26 26 25 25 25 25 25 25 25 24 24 24 24 24 24 23 22 22 22 21 21 21 21 21 21 20 20 20 20

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

12

Most active venture investors Q4 2008

The most active venture firms in the fourth quarter closed five or more deals each. Polaris Venture Partners topped the fourth quarter’s most active list with a total off 19 deals, followed by Draper Fisher Jurvetson, who participated in 18 investments during the quarter.

Firm Polaris Venture Partners Draper Fisher Jurvetson Advantage Capital Partners North Bridge Venture Partners Ben Franklin Technology Partners Southeastern PA Bessemer Venture Partners Redpoint Ventures U.S. Venture Partners Venrock Associates InterWest Partners Kansas Technology Enterprise Corporation Canaan Partners First Round Capital Foundation Capital New Enterprise Associates CMEA Ventures Mayfield Fund OVP Venture Partners Austin Ventures, L.P. Gabriel Venture Partners Kleiner Perkins Caufield & Byers MD Technology Development Corporation RAIN Source Capital, Inc. SV Life Sciences Advisers Adams Street Partners LLC Battery Ventures, L.P. Domain Associates LLC Highland Capital Partners LLC Intel Capital Menlo Ventures Versant Ventures Alloy Ventures Atlas Venture, Ltd. Benchmark Capital Burrill & Company Charles River Ventures Edison Venture Fund HealthCare Ventures LLC Khosla Ventures Scale Venture Partners Accel Partners August Capital Management Bay Partners Clearstone Venture Partners

Location Waltham, MA Menlo Park, CA New Orleans, LA Waltham, MA Philadelphia, PA Larchmont, NY Menlo Park, CA Menlo Park, CA Palo Alto, CA Menlo Park, CA Topeka, KS Westport, CT West Conshohocken, PA Menlo Park, CA Baltimore, MD San Francisco, CA Menlo Park, CA Kirkland, WA Austin, TX Redwood Shores, CA Menlo Park, CA Columbia, MD Saint Paul, MN Boston, MA Chicago, IL Waltham, MA Princeton, NJ Lexington, MA Santa Clara, CA Menlo Park, CA Menlo Park, CA Palo Alto, CA Waltham, MA Menlo Park, CA San Francisco, CA Waltham, MA Lawrenceville, NJ Cambridge, MA Menlo Park, CA Foster City, CA Palo Alto, CA Menlo Park, CA Menlo Park, CA Santa Monica, CA

# of deals 19 18 17 15 13 13 13 13 13 12 12 11 11 11 11 10 10 10 9 9 9 9 9 9 8 8 8 8 8 8 8 7 7 7 7 7 7 7 7 7 6 6 6 6

Firm Core Capital Partners Essex Woodlands Health Ventures Innovation Works, Inc. JAFCO Ventures Lightspeed Venture Partners ONSET Ventures OrbiMed Advisors LLC River Cities Capital Funds RRE Ventures LLC Sigma Partners Three Arch Partners TL Ventures Trinity Ventures Village Ventures .406 Ventures Advanced Technology Ventures Apex Venture Partners ATA Ventures Aurora Funds, Inc. Bain Capital Ventures Connecticut Innovations, Inc. De Novo Ventures Egan-Managed Capital FirstMark Capital, LLC Flybridge Capital Partners Goldman, Sachs & Co. Greylock Partners Labrador Ventures Morgenthaler Ventures MPM Capital Novak Biddle Venture Partners, L.P. Oak Investment Partners Prism VentureWorks Prospect Venture Partners Quaker BioVentures, Inc. Sequoia Capital Sierra Ventures Spark Capital Total Technology Ventures LLC True Ventures VantagePoint Venture Partners Velocity Interactive Group vSpring Capital Warburg Pincus LLC

Location Washington, DC New York, NY Pittsburgh, PA Palo Alto, CA Menlo Park, CA Menlo Park, CA New York, NY Cincinnati, OH New York, NY Menlo Park, CA Portola Valley, CA Wayne, PA Menlo Park, CA Williamstown, MA Boston, MA Waltham, MA Chicago, IL Redwood City, CA Durham, NC Boston, MA Rocky Hill, CT Palo Alto, CA Boston, MA New York, NY Boston, MA New York, NY Waltham, MA Palo Alto, CA Menlo Park, CA Boston, MA Bethesda, MD Westport, CT Needham, MA Palo Alto, CA Philadelphia, PA Menlo Park, CA Menlo Park, CA Boston, MA Atlanta, GA Palo Alto, CA San Bruno, CA Palo Alto, CA Salt Lake City, UT New York, NY

# of deals 6 6 6 6 6 6 6 6 6 6 6 6 6 6 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

13

Venture-backed merger and acquisitions exits 2006 to 2008

Venture-backed initial public offerings 2006 to 2008

The toll of the financial crisis on the venture-backed exit market was evident in 2008 totals. Both IPO and Mergers and Acquisition (M&A) transactions were down significantly. M&A acquisitions dipped below 300 for the first time since 2003 with 260 M&A transactions at a total disclosed value of $13.9 billion. In 2007, by comparison, there were 360 M&A transactions with a total disclosed value of $28.4 billion.

Venture-backed IPOs were at a 30 year low with only 6 exits valued at $470 million. Compared to 2007 when 86 companies floated newly issued stock, raising more than $ 10 billion dollars.

$ in millions 15,000

$ in millions 5,000

`06 `07 `08
$10,810

`06 `07 `08
$4,147 3,750 $3,044 2,500 $2,011 $2,191 $1,631

10,000 $9,084

$5,608 5,000

$5,617 $4,540 $4,154 $4,019 $3,451 $3,972 $3,929 $3,741

1,250 $945 $283 $0 $188 $0

$934
$2,091

$541
0 Quarter Number of M&A Q1 (107) Q2 (106) Q3 (94) Q4 (63) Q1 (83) Q2 (86) Q3 (103) Q4 (88) Q1 (73) Q2 (72) Q3 (78) Q4 (37)

0 Quarter Number of IPOs Q1 (10) Q2 (19) Q3 (8) Q4 (20) Q1 (18) Q2 (25) Q3 (12) Q4 (31) Q1 (5) Q2 (0) Q3 (1) Q4 (0)

Source: Thomson Reuters & National Venture Capital Association includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile. Data is current as of January 02, 2009.

Q4 2008/Full-year 2008 US Report www.pwcmoneytree.com

14

PricewaterhouseCoopers and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTreeTM Report has been obtained from reliable sources. However, neither of the parties nor Thomson Reuters 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. Before making any decision or taking any action, you should consult a competent professional adviser.

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