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Description
At $5.4B of venture capital funding over 715 deals, Q3 2010 was a mixed bag. A superficial examination of the funding total through a “glass half empty” lens will suggest that venture capital remains in the doldrums given the quarter’s fairly anemic funding levels. The other take on the data would suggest optimism given the quarter’s dealflow strength. If we had to choose, we’d opt for optimism. The quarter’s funding was most impacted by a relative absence of VC mega-deals, i.e., deals over $100 million which typically serve to drive the funding total up. The primary reason for optimism is the quarter’s deal strength indicating venture investors are opening their proverbial wallets. The emergence of seed VC deals across a variety of sectors, not just internet, also indicate a healthy early-stage investment environment.
Document Sample
Venture Capital Activity Report | Q3 2010
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
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2 Venture Capital Activity Report | Q3 2010
Q3 2010 – This Quarter in Venture Capital
Funding drops to five quarter low, but deals at a near eight quarter high. Seed deals
emerging across all sectors. Cali, Mass and NY share of VC slips slightly.
At $5.4B of venture capital funding over 715 deals, Q3 2010 was a mixed bag. A superficial examination of the funding
total through a “glass half empty” lens will suggest that venture capital remains in the doldrums given the quarter’s fairly
anemic funding levels. The other take on the data would suggest optimism given the quarter’s dealflow strength.
If we had to choose, we’d opt for optimism. The quarter’s funding was most impacted by a relative absence of VC mega-
deals, i.e., deals over $100 million which typically serve to drive the funding total up. The primary reason for optimism is
the quarter’s deal strength indicating venture investors are opening their proverbial wallets. The emergence of seed VC
deals across a variety of sectors, not just internet, also indicate a healthy early-stage investment environment.
The Big Three Loosen Their Stranglehold on VC Internet - Social & Advertising Win; Gaming Loses
California, Massachusetts and New York which Social and advertising internet plays comprise 26% and
represented 65% of last quarter’s deals and 70% of 24% of internet deals and dollars, respectively. Perennial
funding still dominated but eased up a bit in Q3 2010 hot industry gaming falls off a cliff in Q3 2010 on both a
capturing 57% of deals and 63% of funding. deals and dollars basis.
Seed Investments Keep Growing California Dominates – Just a Bit Less
From 1% of deals in Q3 ’09, seed venture capital Dealflow remains strong but funding falls below $3B in
investments grew to 11% of deals in Q3 2010. Although the quarter and is off 25% vs. the year ago quarter.
still largely an internet VC phenomena, seed Internet and healthcare continue to win most of deals and
investments are emerging in other sectors as well. The dollars. Energy & Utilities’ investment in the state drops
prevalence of seed investments drove much of the precipitously vs. levels seen in the first half of 2010.
increase in deals in the quarter.
Massachusetts Funding Plummets
Internet Series A Median Deal Sizes Increase
The state sees a five quarter low dropping below half a
With the aforementioned significance of seed VC rounds billion dollars of funding while dealflow stays consistent.
within the internet sector, we saw an increase in median Healthcare remains dominant but loses some share of
Series A deal sizes within the internet sector indicative dollars and deals to internet and software. Portion of
of a true dividing line between Seed vs. Series A deals. state’s deals going to seed deals significantly less than
New York and California.
Green and Clean Tech Investments Lose Energy
New York Continues to Bet on Seed Internet Ideas
Green/Clean Tech funding totals which typically benefit
from mega-deals in areas like renewables or electric Once again, NY retains its mantle as the least diverse of
vehicles saw a large drop given the absence of such the Big Three states with over 70% of deals and 60% of
deals in the quarter. Deal volume was up, however, on funding going to internet companies. The state’s seed
the back of seed deals and a 300% increase in green / stage deals have continued to climb.
environmental software (smart grid) vs. Q2 2010.
Washington Continues its Ascent
Healthcare Investment on Road to Recovery
Deals way up and funding grows modestly continuing
After the Q1 2010 nadir, healthcare funding has climbed state’s momentum. Seed deals make more of an impact.
nicely for the last two quarters with deal activity also Internet and healthcare dominate deals and dollars.
growing strongly. Funding and deal levels, however,
remain below YoY levels. Massachusetts and California Don’t Mess With Texas
continue to dominate but Mass share of healthcare VC
funding fell quite significantly vs. prior quarter. Texas retains share of deals in VC landscape while
funding dollars were up. Energy & utilities and healthcare
are dominant sectors. Like other states, increased
prevalance of seed investments.
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3 Venture Capital Activity Report | Q3 2010
$5.4B over 715 Deals – Strong Dealflow; Few Mega Deals
VC funding dipped to $5.4B, a five quarter low, while deal activity recorded its second
highest tally in 8 quarters. Absence of mega deals hurt funding total.
Quarterly VC Investment and Deal Volume Trend
Q4 '08 to Q3 '10
730 715
678 687
603 613 612
$5.9 483 $6.1 $5.9 $5.9
$5.3 $5.5 $5.4
$3.9
Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Funding ($B) # of Deals
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4 Venture Capital Activity Report | Q3 2010
Cali, Mass and NY See Decreased Share of Deals
Washington gains on deal share as the Big Three (NY, Mass, Cali) see lowest
aggregate share of deals in last five quarters.
Share of Venture Capital by State - Number of Deals
Five Quarter Trend
31% 28% 31% 26%
33%
4% 4%
3% 6% 4% 5%
4% 5% 5%
6% 6% 8% 5%
8% 7%
11% 13% 14%
12% 12%
45% 44% 41% 43% 38%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California Massachusetts New York Texas Washington Other
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5 Venture Capital Activity Report | Q3 2010
The Big Three Also Fall on Total Share of VC Funding
Akin to deals, Cali, Mass and NY all saw a decreased share of venture funding YoY.
Mass slipped big in quarter. Overall, big three states garnered 63% of VC funding.
Share of Venture Capital by State - Dollars of Funding
Five Quarter Trend
24% 26% 23% 23% 27%
2% 2%
3% 4%
4% 4% 4% 4%
4% 4% 5% 6%
5% 7%
10% 5%
15% 12%
12% 9%
57% 52%
49% 49% 49%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California Massachusetts New York Texas Washington Other
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6 Venture Capital Activity Report | Q3 2010
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7 Venture Capital Activity Report | Q3 2010
July 2010 Most Active Dealflow Month in the Last 15 Months
Q3 starts with a bang on dealflow which remained strong throughout the quarter.
August 2010 is lowest monthly tally of VC funding in the last 15 months.
Monthly VC Investment and Deal Volume Trend
July 2009 to September 2010
298
275
231 237 232 244
227 220 220 230 223
205 212
190
178 $2.5
$2.4
$2.3
$2.1
$1.9 $1.9 $2.0
$1.9 $1.8 $1.8
$1.6 $1.7 $1.7 $1.6
$1.5
Funding ($B) # of Deals
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8 Venture Capital Activity Report | Q3 2010
Seed VC Deals Continue to Climb Growing to 11% of Deals
Q3 saw seed deals continue to gain prominence and emerge across a variety of
sectors. Overall, later stage deals garnered less venture funding in the quarter.
Share of Venture Capital by Series - Number of Deals
Five Quarter Trend
4%
12% 11% 10% 10%
12%
10% 9% 8%
11%
18% 15%
14% 19%
19%
24% 24%
28%
27%
29%
33% 33%
31% 28%
28%
6% 6% 9% 11%
1%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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Share of Venture Capital by Series - Dollars of Funding
Five Quarter Trend
6%
16% 19% 16%
28%
23%
16% 12%
15%
15%
21%
21% 19% 32%
20%
26% 30%
34% 22%
24%
20% 17% 20%
13% 14%
0% 0% 0% 1% 1%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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9 Venture Capital Activity Report | Q3 2010
Internet & Healthcare Maintain; Energy VC Gets Tired
Perennial top 2 sectors maintain share of funding and deals. In line with green tech
drop, energy & utilities fell on deals and significantly on funding due to few mega-deals.
Share of Venture Capital by Sector - Number of Deals
Five Quarter Trend
19% 16% 14% 17%
20%
8% 7%
8% 9%
8% 4% 4%
5% 4% 7%
3% 8%
6% 10% 8% 7%
5% 4% 6%
7%
29% 33% 38% 33%
30%
28% 25% 24% 26%
23%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Computer Hardware & Services Mobile & Telecommunications
Other
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Share of Venture Capital by Sector - Dollars of Funding
Five Quarter Trend
14% 12% 15%
19% 22%
6%
7% 4% 5%
13% 4% 8% 6% 8%
9% 4% 8%
4% 7% 17%
5% 5% 9%
10% 15%
27% 23%
17% 28%
21%
32% 33% 28% 33%
24%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Computer Hardware & Services Mobile & Telecommunications
Other
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10 Venture Capital Activity Report | Q3 2010
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11 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
INTERNET
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12 Venture Capital Activity Report | Q3 2010
VC Internet Dealflow Remains Flat; Funding Drops
Internet dealflow remains strong as early stage investing continues to rule. Dearth of
Internet
mega-deals is largely to blame for sharp drop in funding from last quarter.
Internet VC Investment and Deal Volume Trend
Last Five Quarters
224 233 233
221
194 $1,618
$1,483
$1,265 $1,253
$1,054
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
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13 Venture Capital Activity Report | Q3 2010
Internet VC Activity Remains Concentrated in CA, MA & NY
No surprises as California dominates the Internet scene. New York and
Internet
Massachusetts take 2nd and 3rd, respectively, in both dealflow and funding.
VC Deal Volume (#) in Internet by State, Q310 Quarter Highlights
California 233 deals | $1,253M
3% New York
1% 15% Top Five Deals
Massachusetts
1%
0% Washington Contact Solutions
2% Virginia iContact
44% Jive Software
1% North Carolina Inflection
6% Angie’s List
Oregon
Indiana
11% Top Cities
DC
Georgia San Francisco, CA
16%
All Other 36 deals | $131M
New York, NY
www.cbinsights.com 31 deals | $126M
Mountain View, CA
5 deals | $68M
Palo Alto, CA
10 deals | $68M
VC Investment ($) in Internet by State, Q310 Reston, VA
2 deals | $51M
San Mateo, CA
2% 9% California 6 deals | $43M
2% Durham, NC
2% New York 2 deals | $41M
Massachusetts Los Angeles, CA
2%
6 deals | $32M
Washington Boston, MA
4%
Virginia 4 deals | $32M
4% Portland, OR
North Carolina
50% 2 deals | $31M
5% Oregon
8% Indiana
DC
12% Georgia
All Other
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14 Venture Capital Activity Report | Q3 2010
70% of Internet Deals & Funding Go To Big Three States
Internet dealflow and funding follow familiar pattern at the top, but funding distribution
Internet
diversifies a bit with 30% of funding falling outside the top 3 states.
Share of Internet VC by State - Number of Deals
Last Five Quarters
27% 26% 23% 23%
29%
2% 1%
2% 1% 1% 4% 6%
1% 5% 5% 10% 11%
13% 10% 9%
12% 15% 15%
12% 13%
45% 46% 43% 47% 44%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California New York Massachusetts Washington Illinois Other
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Share of Internet VC by State - Dollars of Funding
Last Five Quarters
12%
18% 21% 17%
1% 25%
1% 9%
1% 7% 1%
2%
13% 4% 7% 5%
7% 7%
15% 8%
13% 9% 16%
12%
55% 56% 52% 56%
50%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California New York Massachusetts Washington Illinois Other
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15 Venture Capital Activity Report | Q3 2010
VCs Remain Bullish on Early Stage Internet Investing
Early stage (Seed / Series A) dealflow share grows slightly from last quarter and share
Internet
of funding surges; overall strongest early stage showing of last 5 quarters.
Share of Internet VC by Series - Number of Deals
Last Five Quarters
4% 4% 6% 1% 4%
5% 6% 5%
8% 6%
16% 13% 18% 15%
17%
23% 20%
27%
36% 28%
40% 42%
38% 33%
35%
11% 11% 12% 13%
4%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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Share of Internet VC by Series - Dollars of Funding
Last Five Quarters
5% 1%
8% 13% 10%
16% 19%
16% 7%
10%
23%
22% 28% 24%
40%
27%
33% 28% 33%
19%
31%
20% 22% 19% 20%
1% 1% 1% 2% 1%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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16 Venture Capital Activity Report | Q3 2010
VC Internet Investment Remains Diverse Across Industries
Social and Advertising remain strong, while Gaming falls off the map. Cloud
Internet
computing is strong with investment in Data Storage and Business Intelligence apps.
VC Deal Volume (#) in Internet by Sub-Industry, Q310
Advertising, Sales & Marketing
34% 12% Bus. Intelligence, Analytics & Performance Mgmt
Social
8% Information Providers & Portals
Video
Healthcare
14% Health & Wellness
Content Management
Collaboration & Project Management
1% 5% Data Storage
2% 4% Education & Training
4% Data & Document Management
2% 3%
3% eCommerce enablement
3% Apparel & Accessories
2% 3% All Other
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VC Investment ($) in Internet by Sub-Industry, Q310
Advertising, Sales & Marketing
13% Bus. Intelligence, Analytics & Performance Mgmt
Social
24%
Information Providers & Portals
11% Video
Healthcare
2% Health & Wellness
11% Content Management
3%
Collaboration & Project Management
3% Data Storage
3% 8% Education & Training
3% Data & Document Management
3% 4% 6%
eCommerce enablement
3% Apparel & Accessories
3% All Other
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17 Venture Capital Activity Report | Q3 2010
Web Series A Median Deal Size Continues Upward Trend
Series A median deal size grows to $3.4M, a 5 quarter high. Bifurcation between
Internet
Series A and Seed becoming more clear. Later stage medians maintain typical levels.
Internet Median Deal Size by Quarter
($ Million)
$10.8
$7.0 $6.8
$6.0
$3.4
$0.8
Seed Series A Series B Series C Series D Series E +
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
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18 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
HEALTHCARE
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19 Venture Capital Activity Report | Q3 2010
Healthcare Investment Continues Climb Back
Healthcare
Healthcare dealflow surges, up 33% since last quarter. Funding inching up and
approaching 2009 levels.
Healthcare VC Investment and Deal Volume Trend
Last Five Quarters
192
184
169 173
138
$1,910 $1,830 $1,753
$1,639
$1,405
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
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20 Venture Capital Activity Report | Q3 2010
Massachusetts Sees Only 13% of Healthcare Funding
Healthcare
Cali and Massachusetts still up top, but see lower than usual share of overall
Healthcare funding and dealflow. Pennsylvania grows its share of Healthcare pie.
VC Deal Volume (#) in Healthcare by State, Q310 Quarter Highlights
California 184deals | $1,753M
Massachusetts
21% Washington Top Five Deals
28% Texas
Reata Pharmaceuticals
Pennsylvania Relypsa
5% Trivascular
New Jersey
Cerenis Therapeutics
2% Michigan Theranos
3% North Carolina
2% 17% Maryland
Top Cities
4% 8% Ohio
4% 6% San Francisco, CA
All Other 8 deals | $106M
San Diego, CA
www.cbinsights.com 10 deals | $91M
Seattle, WA
7 deals | $80M
Irving, TX
1 deals | $78M
Santa Clara, CA
VC Investment ($) in Healthcare by State, Q310 2 deals | $75M
Belmont, CA
11% California 2 deals | $61M
Santa Rosa, CA
2% Massachusetts 1 deals | $60M
3%
Washington Ann Arbor, MI
3% 3 deals | $55M
Texas San Jose, CA
3% 42% Pennsylvania 4 deals | $51M
3% Mountain View, CA
New Jersey 3 deals | $50M
6% Michigan
North Carolina
7%
Maryland
7% Ohio
13%
All Other
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21 Venture Capital Activity Report | Q3 2010
Cali’ and Mass’ Share of Healthcare Drops
Healthcare
Cali and Mass combine for less than half of overall Healthcare dealflow. Mass’ share
of funding dwindles.
Share of Healthcare VC by State - Number of Deals
Last Five Quarters
30%
38% 38% 36% 37%
5%
3%
6% 4% 6% 6% 8%
2% 4% 3%
4% 4% 3% 4%
11% 5%
17% 23%
18%
17%
40%
32% 34% 33% 28%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California Massachusetts Washington New Jersey Pennsylvania Other
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Share of Healthcare VC by State - Dollars of Funding
Last Five Quarters
25% 22%
31% 33% 29%
3% 4%
2% 4%
4% 4% 7% 6%
4% 4%
8% 5%
16% 0% 7%
4%
23%
13%
18% 27%
50%
40% 42%
35% 31%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California Massachusetts Washington New Jersey Pennsylvania Other
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22 Venture Capital Activity Report | Q3 2010
Series C+ Healthcare Garners 50+% of Total Funding
Healthcare
Seed grows its share of Healthcare dealflow stealing share from Series A. Late-stage
investing (Series E+) grows share strongly in terms of deals and funding.
Share of Healthcare VC by Series - Number of Deals
Last Five Quarters
8% 6%
12% 11% 13%
7%
9%
12% 12% 10%
21%
13% 21% 16%
22%
24%
30% 30% 26%
25%
36% 27%
30% 29%
29%
6% 9%
0% 3% 3%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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Share of Healthcare VC by Series - Dollars of Funding
Last Five Quarters
10% 11% 9%
19% 16%
7%
11%
19% 14%
21% 19%
15% 36%
22%
19%
31% 36%
23% 30%
26%
24% 22% 25%
15% 17%
0% 0% 0% 0% 1%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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23 Venture Capital Activity Report | Q3 2010
Medical Device Investment Remains Strong
Healthcare
Medical Devices continue their dominance of the Healthcare sector, followed by
Pharmaceuticals, Biotech and Drug Development.
VC Deal Volume (#) in Healthcare by Industry, Q310
1% 2% 1% Medical Devices & Equipment
4% Pharmaceuticals / Drugs
4% 5% Biotechnology
Drug Development
7% 42% Disease Diagnosis
Drug Discovery
Medical Facilities & Services
14%
Medical Information
20% Drug Delivery
All Other
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VC Investment ($) in Healthcare by Industry, Q310
1%
3% 1% 1% Medical Devices & Equipment
2%
3% Pharmaceuticals / Drugs
Biotechnology
Drug Development
11% 36%
Disease Diagnosis
Drug Discovery
Medical Facilities & Services
19%
Medical Information
Drug Delivery
23% All Other
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24 Venture Capital Activity Report | Q3 2010
Healthcare Median Deal Sizes Come Back Down from Q2
Healthcare
Early to mid-stage median deal sizes come back to earth from relatively high levels
witnessed last quarter. Overall deal sizes aligned with historical median deal sizes.
Healthcare Median Deal Size by Quarter
($ Million)
$15.0
$13.1
$7.8
$7.0
$4.8
$0.4
Seed Series A Series B Series C Series D Series E +
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
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25 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
GREEN & CLEAN TECH
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26 Venture Capital Activity Report | Q3 2010
Green Tech Funding Falls on Absence of Mega-Deals.
Funding declined 25%, however, deals increased 11% vs. Q2’10. On a YoY basis,
Green
Green Tech funding was down 13% while deal volume was up.
Green VC Investment and Deal Volume Trend
Last Five Quarters
85
61
55 55 $1,322 55
$1,046
$913
$790
$565
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
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27 Venture Capital Activity Report | Q3 2010
California and Texas Lead the Green Charge
California and Texas took 81% of the total Green Tech Funding and 61% of deal volume
Green
in Q3’10 . Texas more than doubled its number of Green Tech deals vs. the prior qtr.
VC Deal Volume (#) in Green by State, Q310 Quarter Highlights
California 61 deals | $790M
Texas
2% 13%
2% 2% Massachusetts Top Five Deals
Michigan
1%
Colorado Trilliant
5% 46%
KiOR
Washington
3% Solaria
New Hampshire Solazyme
3% Smooth-Stone
Oregon
8% South Dakota
Top Cities
15% Nevada
Redwood City, CA
All Other 1 deals | $106M
Pasadena, TX
www.cbinsights.com 1 deals | $70M
Fremont, CA
2 deals | $69M
San Francisco, CA
2 deals | $57M
VC Investment ($) in Green by State, Q310 Austin, TX
3 deals | $54M
2% 2% 1%1% South San Francisco, CA
2% California 1 deals | $52M
2% Palo Alto, CA
3% Texas 2 deals | $30M
3% Massachusetts Kyle, TX
1 deals | $30M
4% Michigan Troy, MI
Colorado 1 deals | $24M
Washington Irvine, CA
1 deals | $22M
New Hampshire
21% 59% Oregon
South Dakota
Nevada
All Other
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28 Venture Capital Activity Report | Q3 2010
Texas Takes Bigger Share of Green VC
Texas’ Green Tech funding grew by 88% versus Q2’10. The Lone Star state took
Green
share from Mass and Cali, both of which experienced a steep drop in Green Funding.
Share of Green VC by State - Number of Deals
Last Five Quarters
27% 27% 27% 26%
36%
1% 2%
4% 4% 4% 3%
2% 2%
9% 8% 8%
4% 13%
4% 7% 5%
7% 15%
55% 53% 55%
47% 46%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California Texas Massachusetts Colorado Oregon Other
www.cbinsights.com
Share of Green VC by State - Dollars of Funding
Last Five Quarters
11% 11%
17% 17%
26% 2% 2%
1% 3%
2% 6% 2% 4%
3% 1% 1%
1% 10%
2%
4% 21%
5% 9%
77% 79%
64% 62% 59%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
California Texas Massachusetts Colorado Oregon Other
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www.cbinsights.com
29 Venture Capital Activity Report | Q3 2010
Series B Green Tech Deals Attract More Funding
Series B Green Tech funding grew by 27% and Series C+ fell by 51% vs.Q2’10.
Green
Green Tech also saw a significant increase in seed deals this quarter.
Share of Green VC by Series - Number of Deals
Last Five Quarters
8% 3% 7%
10% 9%
3% 11% 7%
8% 12%
18% 10%
16% 23%
19%
32% 39%
25% 29%
43%
32% 27%
33% 31%
24%
8% 10%
0% 2% 3%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
Share of Green VC by Series - Dollars of Funding
Last Five Quarters
7% 6%
16%
26%
34% 22%
28%
3% 18%
5% 12%
25% 14%
27%
29%
44%
27%
44%
27%
27%
19% 16%
5% 8% 10%
0% 0% 0% 0% 0%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
30 Venture Capital Activity Report | Q3 2010
Green Tech Software Funding Triples
Green Tech venture funding saw a 300% increase in Green/ Environmental Software
Green
funding vs.Q2’10. Renewable Energy funding was down 50% vs. Q2’10
Share of Green VC by Industry - Number of Deals
Last Five Quarters
25% 29% 31%
42% 40%
13%
11% 11%
13% 5% 7% 5%
4% 4% 8%
2% 5% 2%
5% 4% 2% 7%
5% 6% 3%
49%
44% 40% 39%
38%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Renewables Automobile Manufacturing
Green/Environmental Software Energy Storage
Energy Efficiency Other
www.cbinsights.com
Share of Green VC by Industry - Dollars of Funding
Last Five Quarters
13% 13%
19%
7% 6% 28%
37% 2%
5% 4% 7%
3% 3%
3% 7%
18% 3% 19%
6%
3%
15%
18%
1%
1%
68%
53% 55%
38% 42%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Renewables Automobile Manufacturing
Green/Environmental Software Energy Storage
Energy Efficiency Other
www.cbinsights.com
www.cbinsights.com
31 Venture Capital Activity Report | Q3 2010
Green Software Investments Drive Down Deal Size
Early Stage and Series B median deal size increased by 10% compared to Q2’10.
Green
Series E+ deals size was lower driven by lower capital needs of green software deals.
Green Median Deal Size by Quarter
($ Million)
$52.0
$17.5
$12.5
$9.3
$6.0
$4.0
$0.3
Seed Series A Series B Series C Series D Series E + Overall
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
www.cbinsights.com
www.cbinsights.com
32 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
CALIFORNIA
www.cbinsights.com
33 Venture Capital Activity Report | Q3 2010
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34 Venture Capital Activity Report | Q3 2010
VC Investment in California Falls to Five Quarter Low
California continues to dominate the overall VC investment scene, but funding fell 15%
California
since the prior quarter and 25% since Q3 2009.
California VC Investment and Deal Volume Trend
Last Five Quarters
306 300 297
264 271
$3,431
$2,929 $3,062
$2,685 $2,607
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
35 Venture Capital Activity Report | Q3 2010
Usual Suspects: Internet & Healthcare Rule Cali VC Scene
California
Internet and Healthcare swallow more than 50% of overall VC investment and dealflow
in California; Energy, Mobile, Computer Hardware, Software are the best of the rest
VC Deal Volume (#) in California by Sector, Q310 Quarter Highlights
2%
2% 3% Healthcare 271 deals | $2,607M
Internet
7% 19% Energy & Utilities Top Sector
# of Deals – Internet
6% Mobile & Telecommunications $ of Funding - Healthcare
Computer Hardware & Services
4%
Industrial Top Five Deals
5% Trilliant
Electronics Relypsa
7% Software (non-internet/mobile) Solaria
Trivascular
38% Business Products & Services Pacific Bioscience
7%
Consumer Products & Services
All Other Top Cities
San Francisco
www.cbinsights.com 55 deals | $325M
Palo Alto
22 deals | $210M
Santa Clara
14 deals | $205M
VC Investment ($) in California by Sector, Q310 San Jose
18 deals | $177M
2% 1% 2% Redwood City
Healthcare 6 deals | $142M
San Diego
Internet 22 deals | $125M
9%
Energy & Utilities Mountain View
28% 10 deals | $120M
5% Mobile & Telecommunications South San Francisco
5% Computer Hardware & Services 5 deals | $111M
Menlo Park
Industrial 7 deals | $94M
8% Electronics Sunnyvale
Software (non-internet/mobile) 9 deals | $91M
5%
24% Business Products & Services
11% Consumer Products & Services
All Other
www.cbinsights.com
www.cbinsights.com
36 Venture Capital Activity Report | Q3 2010
Internet & Healthcare Maintain Dominance in Cali
Internet and Healthcare represent 57% of overall dealflow. Energy’s share of funding
California
in Q3 half of what was seen in first two quarter of 2010.
Share of VC in California by Sector - Number of Deals
Last Five Quarters
27% 23% 24%
30% 30%
5% 5%
5% 6% 6% 7%
5%
6% 9% 4% 7% 7%
6% 5% 8%
29% 41% 38%
34% 32%
25% 20%
18% 17% 19%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Computer Hardware & Services Other
www.cbinsights.com
Share of VC in California by Sector - Dollars of Funding
Last Five Quarters
22% 19% 21%
38% 34%
5%
7% 6% 8%
10% 9%
3% 6% 19%
3% 6% 3% 11%
12%
20%
31% 24%
17% 30%
23%
28% 24% 28%
21%
15%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Computer Hardware & Services Other
www.cbinsights.com
www.cbinsights.com
37 Venture Capital Activity Report | Q3 2010
Early Stage Stays Strong in California
Series A dollar share balloons on the back of atypically large early stage deals. Seed
California
continues to grow its share as well, taking 11% of overall dealflow in California
Share of VC in California by Series - Number of Deals
Last Five Quarters
9% 4%
13% 11% 11%
14%
12% 15% 13% 10%
23% 18%
21% 16% 23%
23% 24%
25%
30% 28%
28% 27%
25%
23% 22%
7% 8% 11%
2% 4%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
Share of VC in California by Series - Dollars of Funding
Last Five Quarters
4%
14% 13% 14%
32% 29%
20% 16%
24%
16% 21%
22%
32%
28%
20%
31%
33%
20% 21%
23%
13% 13% 16%
8% 11%
0% 0% 0% 1% 1%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
38 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
MASSACHUSETTS
www.cbinsights.com
39 Venture Capital Activity Report | Q3 2010
Massachusetts
No Tea Party in Q3: Massachusetts VC Funding Plummets
VC funding in Mass falls to five quarter low, down ~50% since the beginning of the
year. On a positive note, dealflow shows modest increase vs. prior quarter.
Massachusetts VC Investment and Deal Volume Trend
Last Five Quarters
88 87 87
84
73 $898
$689
$653
$596
$466
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
40 Venture Capital Activity Report | Q3 2010
Massachusetts
Healthcare & Internet Combine for Lion’s Share of Mass
As always, Healthcare and Internet continue to dominate VC investment in
Massachusetts. The Software sector also showed strength.
VC Deal Volume (#) in Massachusetts by Sector, Q310 Quarter Highlights
2% 1% 2% 87 deals | $466M
Healthcare
8%
Internet Top Sector
2%
Software (non-internet/mobile) # of Deals – Healthcare
$ of Funding - Healthcare
5% 37% Energy & Utilities
3% Mobile & Telecommunications Top Five Deals
Computer Hardware & Services Dicerna Pharmaceuticals
10% Euthymics Bioscience
Industrial Metamark Genetics
Business Products & Services Rhythm Pharmaceuticals
Good Start Genetics
Electronics
29%
All Other Top Cities
Cambridge
www.cbinsights.com
17 deals | $82M
Boston
VC Investment ($) in Massachusetts by Sector, Q310 11 deals | $78M
Watertown
1% 0% 2 deals | $28M
Marlborough
3% Healthcare 5 deals | $27M
4% Woburn
Internet
2% 5% 5 deals | $25M
Software (non-internet/mobile) Braintree
4% 1 deals | $24M
Energy & Utilities
Waltham
49% Mobile & Telecommunications 6 deals | $21M
9% Burlington
Computer Hardware & Services
3 deals | $19M
Industrial Weston
1 deals | $16M
Business Products & Services Needham
21%
Electronics 3 deals | $14M
All Other
www.cbinsights.com
www.cbinsights.com
41 Venture Capital Activity Report | Q3 2010
Massachusetts
Healthcare Investment Share Down Slightly; Internet Up
Massachusetts’ distribution of deals across sector remains nearly identical to last
quarter, but Internet and Software steal dollar share from Healthcare.
Share of VC in Massachusetts by Sector - Number of Deals
Last Five Quarters
16% 11% 16%
22% 18%
10%
9% 5% 5%
5% 3%
7% 5% 10%
3% 10% 10%
5% 10%
11%
27% 29%
34% 26%
22%
34% 33% 38% 37%
29%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Software (non-internet/mobile) Energy & Utilities
Mobile & Telecommunications Other
www.cbinsights.com
Share of VC in Massachusetts by Sector - Dollars of Funding
Last Five Quarters
4%
12% 11% 6% 14%
19% 2%
1% 7% 14% 2%
2% 12% 4%
3% 2%
11% 5% 9%
22% 22% 16%
16% 21%
10%
52% 51% 56%
49%
42%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Software (non-internet/mobile) Energy & Utilities
Mobile & Telecommunications Other
www.cbinsights.com
www.cbinsights.com
42 Venture Capital Activity Report | Q3 2010
Massachusetts
Early Stage Investing in Massachusetts Grows
Early stage investment commands 33% of funding, marking its highest level of share in
recent history. Seed dealflow loses share, but is propped up by Series A.
Share of VC in Massachusetts by Series - Number of Deals
Last Five Quarters
6% 2% 2%
11% 13% 5%
11%
12% 6% 16%
9%
16%
16% 15%
19%
28% 36%
28% 28%
28%
33% 36% 38%
37% 27%
7% 4% 7% 3%
0%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
Share of VC in Massachusetts by Series - Dollars of Funding
Last Five Quarters
2%
4%
10% 10%
23% 15%
33% 11%
18%
5%
12% 30%
9%
23%
46%
9%
29%
22% 24%
31%
31% 33%
27% 24%
18%
0% 1% 0% 0% 0%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
43 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
NEW YORK
www.cbinsights.com
44 Venture Capital Activity Report | Q3 2010
New York VC Funding Down – Deals Up
New York
NY venture funding was down 30% vs. Q2’10 and up 8% relative to the same period
last year. Deal volume grew by 6% vs. Q2’10 and 31% vs. last year.
New York VC Investment and Deal Volume Trend
Last Five Quarters
55
51
48
39 41
$355
$319
$286
$245
$227
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
45 Venture Capital Activity Report | Q3 2010
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46 Venture Capital Activity Report | Q3 2010
Concrete Jungle Where Web Dreams are Made Of
New York
Internet dominance of NY continues with Q3 seeing 71% of deals going to net
companies. Overall, internet funding fell by 38% compared to Q2’10.
VC Deal Volume (#) in New York by Sector, Q310 Quarter Highlights
2% 2% 2%
2% Internet 51 deals | $245M
Healthcare Top Sector
14% # of Deals – Internet
Mobile & Telecommunications $ of Funding - Internet
Computer Hardware & Services Top Five Deals
8%
Squarespace
Business Products & Services Etsy
Admeld
71% ZocDoc
Electronics
eXelate Media
Software (non-internet/mobile)
Top Cities
New York
www.cbinsights.com 42 deals | $196M
Brooklyn
1 deals | $20M
Buffalo
1 deals | $10M
VC Investment ($) in New York by Sector, Q310 White Plains
1 deals | $6M
2% 2% 1% Rye
1 deals | $5M
Internet
16% Healthcare
Mobile & Telecommunications
9% Computer Hardware & Services
62% Business Products & Services
8%
Electronics
Software (non-internet/mobile)
www.cbinsights.com
www.cbinsights.com
47 Venture Capital Activity Report | Q3 2010
Internet and Mobile Capture 85% of NY Deal Volume
New York
New York venture deals remain significantly concentrated in Internet and Mobile
technology companies with 85% of deal volume and 72% of funding.
Share of VC in New York by Sector - Number of Deals
Last Five Quarters
6% 6%
13% 2%
20% 22% 13%
3% 14%
8% 5%
2% 8% 8%
10% 9%
10% 5%
8%
11%
73% 71%
59% 63%
53%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Internet Healthcare
Financial Mobile & Telecommunications
Computer Hardware & Services Other
www.cbinsights.com
Share of VC in New York by Sector - Dollars of Funding
Last Five Quarters
9% 9% 6% 5%
24% 2% 9% 16%
8% 8%
8% 15%
4% 9%
8% 19%
6% 18% 8%
7%
70%
62% 63% 63%
48%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Internet Healthcare
Financial Mobile & Telecommunications
Computer Hardware & Services Other
www.cbinsights.com
www.cbinsights.com
48 Venture Capital Activity Report | Q3 2010
New York Becoming Early Stage Capital?
New York
Early stage dominated taking 63% of all New York deals. Later stage New York
venture funding fell by 67% vs. Q2’10 (Series C and later).
Share of VC in New York by Series - Number of Deals
Last Five Quarters
7% 2% 2%
8% 12% 5% 5%
5% 5%
8% 11%
6%
14%
11%
15% 24%
20%
30%
41% 30%
45% 46%
39%
27% 30%
16% 17%
5% 6% 7%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
Share of VC in New York by Series - Dollars of Funding
Last Five Quarters
8% 4%
9%
16%
17% 3%
12% 28%
6% 10%
2% 12%
28% 25%
24% 34%
51% 23%
37%
31%
41%
30%
14% 15% 15%
1% 0% 0% 1% 2%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
49 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
WASHINGTON
www.cbinsights.com
50 Venture Capital Activity Report | Q3 2010
Washington Venture Funding & Deals – Up, Up and Away
Washington
Deals up 36% vs. prior quarter and up 62% relative to year ago period. Venture
funding grew 5% vs. prior quarter and 55% compared to last year.
Washington VC Investment and Deal Volume Trend
Last Five Quarters
34
29
26 25
21 $222
$211
$165
$144 $138
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
51 Venture Capital Activity Report | Q3 2010
Healthcare Top Sector for Washington Venture Funding
Washington
Healthcare sector took 56% of funding setting a new high for healthcare sector’s share in
a quarter. Healthcare and Internet saw majority of deals combining for 67% share.
VC Deal Volume (#) in Washington by Sector, Q310 Quarter Highlights
3%
3%
3% Healthcare
34 deals | $222M
Internet
6% Top Sector
29% Energy & Utilities # of Deals – Internet
6% $ of Funding - Healthcare
Mobile & Telecommunications
6% Software (non-internet/mobile) Top Five Deals
Immune Design
6% Computer Hardware & Services EndoGastric Solutions
Environmental Services & Equipment Uptake Medical
Neurovista
Business Products & Services Apptio
38% All Other
Top Cities
Seattle
www.cbinsights.com 18 deals | $112M
Bellevue
8 deals | $38M
Redmond
1 deals | $30M
VC Investment ($) in Washington by Sector, Q310 Bothell
1 deals | $12M
3% 1% 0% Kennewick
4% 2 deals | $11M
Healthcare
Kirkland
1% Internet 1 deals | $10M
6%
Energy & Utilities
5%
Mobile & Telecommunications
Software (non-internet/mobile)
56% Computer Hardware & Services
26% Environmental Services & Equipment
Business Products & Services
All Other
www.cbinsights.com
www.cbinsights.com
52 Venture Capital Activity Report | Q3 2010
Internet Funding Drives Deal Growth
Washington
Washington internet funding more than tripled vs. Q2’10. Also saw nearly 90% growth
in deals. Healthcare maintains its status as top funded sector.
Share of VC in Washington by Sector - Number of Deals
Last Five Quarters
10% 8%
14% 15%
5% 20%
15% 6%
14%
19% 8% 6%
8% 3% 6%
7% 12%
24%
42% 28% 38%
41%
10%
33% 32% 29%
27%
21%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Energy & Utilities Mobile & Telecommunications
Software (non-internet/mobile) Other
www.cbinsights.com
Share of VC in Washington by Sector - Dollars of Funding
Last Five Quarters
3% 7%
11% 12% 13%
16% 6%
9% 7% 1%
9% 5%
4% 1%
13% 10%
18% 26%
12% 36%
4% 9%
66%
51% 51% 56%
41%
4%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Internet
Energy & Utilities Mobile & Telecommunications
Software (non-internet/mobile) Other
www.cbinsights.com
www.cbinsights.com
53 Venture Capital Activity Report | Q3 2010
Late Stage Investments Drive Growth in VC Funding
Washington
Washington’s funding growth came from Series E+ rounds which were non-existent in
Q2’10. Seed and Series A deal volume combined was up 20% vs. Q2’10.
Share of VC in Washington by Series - Number of Deals
Last Five Quarters
10% 5% 9%
15% 12%
5% 10%
9% 4%
5%
15% 10% 20% 16%
20% 43%
30% 24%
40%
50% 36%
40% 35%
25%
4% 8%
0% 0% 0%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
Share of VC in Washington by Series - Dollars of Funding
Last Five Quarters
4% 7%
20% 13%
27%
22%
43% 7%
1% 1%
12%
48% 23%
1%
40%
18%
32%
23% 60%
22%
30%
16% 13% 17%
0% 0% 0% 0% 0%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
54 Venture Capital Activity Report | Q3 2010
Q3 2010 Venture Capital
TEXAS
www.cbinsights.com
55 Venture Capital Activity Report | Q3 2010
Texas Venture Funding Surged Versus Prior Quarters
Texas
Texas overtook New York for the third spot on a dollars of funding basis with 68%
growth in funding vs. Q2’10. Deal Volume was flat to the prior quarter.
Texas VC Investment and Deal Volume Trend
Last Five Quarters
39 38
33 33
30
$357
$264
$232 $238
$212
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
56 Venture Capital Activity Report | Q3 2010
Texas Venture Investments Go Green
Texas
Green Tech investments took 47% of total funding on the back of investments in
Energy & Utilities and energy efficient Computer Storage solutions.
VC Deal Volume (#) in Texas by Sector, Q310
Quarter Highlights
33 deals | $357M
Healthcare
3% 12% Energy & Utilities Top Sector
21% # of Deals – Energy & Utilities
Internet $ of Funding - Healthcare
6%
Mobile & Telecommunications
Top Five Deals
6% Computer Hardware & Services
Reata Pharmaceuticals
Software (non-internet/mobile) KiOR
6% Smooth-Stone
25% Business Products & Services Airstrip Technologies
9% Automotive & Transportation Xtreme Power
12% All Other Top Cities
www.cbinsights.com Austin
13 deals | $81M
Irving
1 deals | $78M
Pasadena
1 deals | $70M
VC Investment ($) in Texas by Sector, Q310 San Antonio
4 deals | $39M
2%
2% 1% Houston
3 deals | $36M
Healthcare
Kyle
5% Energy & Utilities 1 deals | $30M
Dallas
Internet 3 deals | $9M
13% 32%
Mobile & Telecommunications Fort Worth
1 deals | $7M
Computer Hardware & Services Richardson
1 deals | $4M
11% Software (non-internet/mobile)
Round Rock
Business Products & Services 1 deals | $3M
Automotive & Transportation
2%
32% All Other
www.cbinsights.com
www.cbinsights.com
57 Venture Capital Activity Report | Q3 2010
Healthcare & Energy Drive Deal Growth
Texas
Healthcare venture funding in Texas grew by 400% vs. Q2’10. The sector also saw a
75% increase in deal volume. Energy dipped on deals but saw strong funding growth.
Share of VC in Texas by Sector - Number of Deals
Last Five Quarters
20% 15%
27%
33%
3% 45% 9%
17% 6%
18%
13% 9%
5% 5% 12%
37% 15% 16% 33%
3% 24%
16%
0%
31% 12%
23% 8%
21%
11% 12%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Energy & Utilities
Internet Mobile & Telecommunications
Computer Hardware & Services Other
www.cbinsights.com
Share of VC in Texas by Sector - Dollars of Funding
Last Five Quarters
4% 10%
4%
22%
32% 14% 13%
10% 50%
16% 11%
2%
20% 16%
6% 32%
11%
10%
1% 48%
31% 13%
10%
0% 36% 32%
16% 10%
14%
6%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Healthcare Energy & Utilities
Internet Mobile & Telecommunications
Computer Hardware & Services Other
www.cbinsights.com
www.cbinsights.com
58 Venture Capital Activity Report | Q3 2010
Early Stage Investments Dominate Dealflow
Texas
Venture investments in Seed and Series A funding rounds were 65% of dealflow in
Q3’10. Venture funding in Texas was well distributed across investment stage.
Share of VC in Texas by Series - Number of Deals
Last Five Quarters
6% 6%
12% 14%
20% 6%
12% 10% 22% 12%
5%
8% 10% 12%
20% 17%
32% 33% 11%
47%
35%
39%
36% 33%
20% 18%
6%
0% 0% 0%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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Share of VC in Texas by Series - Dollars of Funding
Last Five Quarters
4%
14% 13% 14%
32% 29%
20% 16%
24%
16% 21%
22%
32%
28%
20%
31%
33%
20% 21%
23%
13% 13% 16%
8% 11%
0% 0% 0% 1% 1%
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10
Seed Series A Series B Series C Series D Series E +
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59 Venture Capital Activity Report | Q3 2010
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 or regulatory filing indicates the companies which may have received venture capital
closing of $5M out of a desired raise of $15M, our investment prior are also not included.
numbers reflect only the 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 | Q3 2010
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61 Venture Capital Activity Report | Q3 2010
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