Quarterly Venture Capital Report - Q1 2011 by cbinsights

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									                                                                                       Venture Capital Activity Report | Q1 2011




TABLE OF CONTENTS
QUARTER SUMMARY                                               2

QUARTERLY TRENDS                                              3

SECTOR REVIEW                                                 12
1      INTERNET                                               12

2      HEALTHCARE                                             19

3      GREEN / CLEAN TECH                                     27

GEOGRAPHIC REVIEW
1      CALIFORNIA                                             34

2      MASSACHUSETTS                                          40

3      NEW YORK                                               45

4      WASHINGTON                                             51

5      TEXAS                                                  56



DEFINITIONS & DATA INTEGRITY                                  61




    © 2010, CB Insights. All rights reserved. For more information about CB Insights, please email info@cbinsights.com.

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 2                                                                      Venture Capital Activity Report | Q1 2011


Q1 2011 – This Quarter in Venture Capital
Quarter sees dealflow and funding levels reach pre-recession levels. Internet dials it
up seeing financing up 83% and deals up 29% vs. Q4 2010.
Q1 2011 registered $7.5B of venture capital funding invested in 738 deals. We’d said after Q4 2010’s performance that
those of you looking for a data point that suggests VC is back would have some data to support your claim. We’d also
said at the time that those of you who think things are getting bubblicious would have something to hang your hat on.

Q1 2011 numbers will likely reinforce whichever viewpoint you have as the quarter came in at pre-recessionary deal and
funding levels. Given the $1B jump in funding over the prior quarter with a similar number of deals, it is also clearly a
quarter driven by mega-financings in both internet and greentech companies.

If the final two quarters of the year maintain similar funding levels, we could approach $29-$30 billion invested by VCs.
Some pundits have suggested that the VC asset class’ ―right size‖ is around $25 billion so it will be interesting to see if the
momentum continues.

Before we get into specific notes on the quarter, it’s worth noting what we included and what we didn’t as this quarter had
some mega-deals which can and did greatly impact results. For example, the CB Insights database tracked Groupon’s
mega $950 funding closing in two tranches. So $500M of it was included in Q4 2010 with the remainder being reflected in
this report. Also, when non-VCs (mutual funds, hedge funds, etc) invest in internet companies for example, we do not
include those rounds unless there is also a venture firm participating. As always, we recommend you also review our
definitions and methodology on p. 59 to see what is included vs. what is not as there tends to be a fair amount of
misinformation out there about venture data.

NY Retains Spot as #2 for Tech Investment Over Mass              Healthcare VC – Can’t Shake the Malaise
 In Q4 2010, we’d revealed that NY overtook Mass for              Deals in the Healthcare space were down 13% YoY while
 tech VC dollars (http://bit.ly/dLmLYG ). While the trend         funding grew 11%. On sequential basis, deals and dollars
 hasn’t accelerated, the gap between the two tech VC              have fallen in last 2 quarters. Mass and Cali continue to
 hubs is slightly wider. Over the last six quarters, NY           dominate share of Healthcare VC with Mass rebounding
 has seen 261 tech deals vs. 250 for Massachusetts.               over Q4 2010 levels. Early stage activity in Healthcare
 Funding to NY tech companies came in at $1.60B vs.               drops to five quarter low.
 $1.44B for Massachusetts.
                                                                 California Knows How to Party
Early Stage Investment Stays Strong                               Yes - California dominated (yawn). Funding climbs 47%
 Q1 2011 early stage deal and funding share remained              vs Q4 2010 and 32% vs. Q1 2010. Overall, Cali took
 consistent with Q4 2010. Seed VC still represented               39% of deals and over 50% of funding. Deal count was
 10% of overall dealflow. Its consistency over the last 4         down 7% sequentially and 3% YoY. Internet and
 quarters suggests it may have found the right level of           healthcare deals stayed flat and funding dipped. Energy
 total VC deals (9-11%). Early stage deal activity was            deals climbed with funding increasing significantly.
 nearly 50% of total deals.
                                                                 Texas Deals Down | Dollars Flat
Green Tech / Clean Tech Gets Its Mojo Back                         Texas deals and dollar stay within the state’s historical
 After three quarters of what can technically be called            range but deals dipped sequentially and year over year.
 ―blah‖ performance, green tech deals had a breakout               Funding was up, however, vs. Q1 2010 and Q4 2010.
 quarter with deals and dollars up 45% and 145%
 respectively vs. Q4 2010. Cali consumed ¾ of the                Washington At Five Quarter Low in VC Funding
 greentech funding on the back of mega-deals in a                 Deal count in Washington grew 10% vs. Q4 2010 but
 variety of areas including solar, software, electric             funding remained at low levels seen in prior quarter.
 vehicles and fuel cells. Greentech Seed VC deals                 Over 50% of Washington deals were in early-stage
 ticked up nicely vs. Q4 2010 as well.                            companies and over 50% of deals were to Internet firms.
                                                                  The smaller checks for these financings resulted in
Groupon Halo Effect?                                              Washington’s funding levels remaining low.
 Illinois saw an increase in the number of web
 investments occurring in the area. The state has
 historically been a non-entity in deal activity rankings but
 has been showing increasing signs of life since
 Groupon-mania began.

www.cbinsights.com
                                                  Venture Capital Activity Report | Q1 2011




    Nominate your portfolio companies for the Forbes 2011 list of
   America’s Most Promising Companies
 Forbes wants to shine a light on high-growth, privately held companies with brilliant
 prospects—and they need your help. If your company, or a company you know, is
 really on the rise, please place your nomination by answering a short survey at
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 Forbes — with help from CB Insights’ Beacon software — has developed a
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 The best will appear on Forbes' second annual list of America's Most Promising
 Companies. Making the Forbes AMPC list means serious exposure—to customers,
 strategic partners, and prospective employees and investors. Forbes magazine
 reaches nearly 5.5 million readers every two weeks, and Forbes.com attracts an
 average 18 million unique visitors each month.

                            To learn more or to apply, visit
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 4                                               Venture Capital Activity Report | Q1 2011


$7.5B over 738 Deals – An Eight-Quarter High
Continued strength in seed VC funding drives two-year high in number of deals. Total
VC funding hits high as well on back of more deal activity and a few mega-financings.




www.cbinsights.com
 5                                               Venture Capital Activity Report | Q1 2011


Cali Dips While NY and Mass Both Gain on Share of Deals.
Big Three (NY, Mass, Cali) stay at 60+% share of deals with Cali dropping a bit.
Washington and Texas share of deals stays flat.




www.cbinsights.com
 6                                                 Venture Capital Activity Report | Q1 2011


The Big Three’s Share of VC Funding Recovers
Cali funding levels jump on back of large deals while NY share of dollars falls given the
city’s increasing number of smaller sized deals.




www.cbinsights.com
 7                                               Venture Capital Activity Report | Q1 2011


Get Started for Free with CB Insights
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 8                                               Venture Capital Activity Report | Q1 2011


2011 Off to the Races – VCs Say Let’s Make a Deal
Similar to Q4 2010, Q1 2011 started relatively weak and ended with a flurry of deal
activity. January funding tally buoyed by mega-financing round of Groupon.




www.cbinsights.com
 9                                              Venture Capital Activity Report | Q1 2011


Early Stage Stays Strong with Seed VC Holding Its Ground
Share of deals by stage remained consistent with Q4 2010. Funding to later stage
deals declined on a sequential basis but stayed within historical range.




www.cbinsights.com
10                                                Venture Capital Activity Report | Q1 2011


Internet and Energy Deals Climb, Healthcare Drops
Healthcare deals hit 5 quarter low on share of deals and dollars. Share of internet deals
highest in five quarters. Energy takes larger share of funding on back of large deals.




www.cbinsights.com
11                                                         Venture Capital Activity Report | Q1 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
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12                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     INTERNET




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13                                              Venture Capital Activity Report | Q1 2011


Another Huge Quarter for Internet Venture Investment
Optimism around all things web continues as deal volume rises and investment dollars




                                                                                            Internet
eclipse $2 billion for the second straight quarter.




www.cbinsights.com
14                                                Venture Capital Activity Report | Q1 2011


Cali Reigns Supreme and Illinois Big Again Due to Groupon
California continues to dominate internet while New York maintains its momentum.




                                                                                              Internet
Illinois registers high on investment due to portion of Groupon financing closing in Q1.




                                                                  Quarter Highlights

                                                                  286 deals | $2,315M

                                                                  Top Five Deals
                                                                   Groupon
                                                                   Angie’s List
                                                                   Box.net
                                                                   WeatherBill
                                                                   Color Labs


                                                                  Top Cities
                                                                   Chicago, IL
                                                                     12 deals | $491M
                                                                   San Francisco, CA
                                                                     49 deals | $315M
                                                                   New York, NY
                                                                     39 deals | $218M
                                                                   Palo Alto, CA
                                                                     12 deals | $189M
                                                                   Redwood City, CA
                                                                     4 deals | $82M
                                                                   Mountain View, CA
                                                                     8 deals | $78M
                                                                   San Mateo, CA
                                                                     7 deals | $72M
                                                                   Seattle, WA
                                                                     9 deals | $54M
                                                                   Indianapolis, IN
                                                                     1 deals | $54M
                                                                   Los Angeles, CA
                                                                     5 deals | $50M




www.cbinsights.com
15                                               Venture Capital Activity Report | Q1 2011


New York Continues Position as the #2 Home for Web
New York continues its reign as the #2 spot for Internet investment. Illinois also sees




                                                                                             Internet
some pop in deal volume due seemingly to Groupon halo effect.




www.cbinsights.com
16                                             Venture Capital Activity Report | Q1 2011


Early Stage Internet Investing Continues Upward Trend
Early stage (Seed / Series A) deals and funding climb over Q4 2010 levels. Later




                                                                                           Internet
stage investment funding levels show strength as well on back of large deals.




www.cbinsights.com
17                                              Venture Capital Activity Report | Q1 2011


Internet Investment Remains Diverse Across Industries
Social and Advertising continue to be frontrunners amongst a widely diverse array of




                                                                                            Internet
industries for internet investment. Groupon drives funding % in ecommerce discount.




www.cbinsights.com
18                                              Venture Capital Activity Report | Q1 2011


Early Stage Medians See Uptick; Late Stage Down
Seed through Series C deals saw medians equal to or larger than last quarter, while




                                                                                            Internet
later stage investment sizes fell substantially over same time period.




www.cbinsights.com
19                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     HEALTHCARE




www.cbinsights.com
20                                               Venture Capital Activity Report | Q1 2011


Healthcare Investment Deals Keep Falling; Dollars Stabilize




                                                                                             Healthcare
Healthcare deals down for the quarter as well as year-over-year. Investment dollars
stay flat with previous quarter and are up 11% since Q1 2010.




www.cbinsights.com
21                                            Venture Capital Activity Report | Q1 2011


Cali and Mass Grow Their Share of Healthcare VC Funding




                                                                                          Healthcare
California and Massachusetts combine for 56% of deals and 64% of overall Healthcare
venture funding solidifying their positions as healthcare hubs.




                                                              Quarter Highlights

                                                              150 deals | $1,561M

                                                              Top Five Deals
                                                               CardioDx
                                                               Chimerix
                                                               NextWave Pharmaceuticals
                                                               Pharmaron
                                                               RainDance Technologies



                                                              Top Cities
                                                               Redwood City, CA
                                                                 4 deals | $100M
                                                               Cambridge, MA
                                                                 5 deals | $79M
                                                               Mountain View, CA
                                                                 6 deals | $64M
                                                               Palo Alto, CA
                                                                 3 deals | $59M
                                                               San Diego, CA
                                                                 8 deals | $56M
                                                               Durham, NC
                                                                 2 deals | $56M
                                                               Saratoga, CA
                                                                 4 deals | $49M
                                                               Cupertino, CA
                                                                 2 deals | $47M
                                                               Waltham, MA
                                                                 6 deals | $44M
                                                               Irvine, CA
                                                                 1 deals | $40M




www.cbinsights.com
22                                              Venture Capital Activity Report | Q1 2011


Cali & Mass Grow Dollars and Deals YOY and Sequentially




                                                                                            Healthcare
Massachusetts stages a comeback, earning back share of deals that has been
trending down since Q2 2010. Cali sees 5-quarter high in share of deals and dollars.




www.cbinsights.com
23                                              Venture Capital Activity Report | Q1 2011


Early Stage Healthcare Falls Sharply in Q1 2011




                                                                                            Healthcare
Early stage Healthcare investment sees a 5-quarter low in share of deals and dollars
after a breakout Q4 2010. Series C to E+ all grow share of deals.




www.cbinsights.com
24                                            Venture Capital Activity Report | Q1 2011


Medical Devices Continues Dominance of Healthcare




                                                                                          Healthcare
Devices which have reigned supreme continue to do so followed by Drug
Development, Pharmaceuticals, Biotech and Medical Facilities.




www.cbinsights.com
25                                             Venture Capital Activity Report | Q1 2011


Early Stage Healthcare Medians Up Substantially




                                                                                           Healthcare
Seed and Series A deals see median deal growth versus last quarter and yoy, while
later stage deal sizes are a mixed bag but largely within historical values.




www.cbinsights.com
                                                  Venture Capital Activity Report | Q1 2011




    Nominate your portfolio companies for the Forbes 2011 list of
   America’s Most Promising Companies
 Forbes wants to shine a light on high-growth, privately held companies with brilliant
 prospects—and they need your help. If your company, or a company you know, is
 really on the rise, please place your nomination by answering a short survey at
 http://forbes.cbinsights.com/ampc-intro-survey.php.

 Forbes — with help from CB Insights’ Beacon software — has developed a
 comprehensive methodology for picking promising high-growth private companies.
 The best will appear on Forbes' second annual list of America's Most Promising
 Companies. Making the Forbes AMPC list means serious exposure—to customers,
 strategic partners, and prospective employees and investors. Forbes magazine
 reaches nearly 5.5 million readers every two weeks, and Forbes.com attracts an
 average 18 million unique visitors each month.

                            To learn more or to apply, visit
     http://forbes.cbinsights.com/ampc-intro-survey.php




www.cbinsights.com
27                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     GREEN & CLEAN TECH




www.cbinsights.com
28                                              Venture Capital Activity Report | Q1 2011


Green Tech Hits Five-Quarter High in Q1 2011
After 3 quarters of being less than energetic, Green Tech deal and dollars up 45% and




                                                                                            Green
145% respectively versus Q4 2010. Year-over-year, investment dollars up 46%.




www.cbinsights.com
29                                              Venture Capital Activity Report | Q1 2011


Cali Swallows Nearly ¾ of Total Dollars; Mass a Solid #2
California consumes 73% of investment dollars, while Cali and Mass combine for over




                                                                                            Green
half of overall deal volume. The field remains fragmented after the big 2.




                                                                Quarter Highlights

                                                                86 deals | $1,936M

                                                                Top Five Deals
                                                                 BrightSource Energy
                                                                 Fisker Automotive
                                                                 OSIsoft
                                                                 Miasole
                                                                 Bloom Energy


                                                                Top Cities
                                                                 Oakland, CA
                                                                   1 deals | $201M
                                                                 Santa Clara, CA
                                                                   2 deals | $197M
                                                                 Irvine, CA
                                                                   1 deals | $150M
                                                                 San Leandro, CA
                                                                   1 deals | $135M
                                                                 Sunnyvale, CA
                                                                   2 deals | $121M
                                                                 San Jose, CA
                                                                   3 deals | $80M
                                                                 Santa Monica, CA
                                                                   1 deals | $76M
                                                                 Pleasanton, CA
                                                                   1 deals | $75M
                                                                 San Diego, CA
                                                                   4 deals | $62M
                                                                 Kansas City, MO
                                                                   1 deals | $58M




www.cbinsights.com
30                                                Venture Capital Activity Report | Q1 2011


California Dollars Surge On Back of Mega-Deals
California snaps its downward trend on funding with mega investments into solar,




                                                                                              Green
electric vehicles, fuel cells and energy efficiency software driving big share gain.
Greentech deals beyond outside of top 5 states hit five-quarter high.




www.cbinsights.com
31                                              Venture Capital Activity Report | Q1 2011


Green Tech Seed Stages a Comeback in Deal Volume
Early stage Green Tech investment dollars remain flat, but deal volume picks up




                                                                                            Green
versus Q4 2010. Series E+ late stage investment dominates share of dollars.




www.cbinsights.com
32                                            Venture Capital Activity Report | Q1 2011


Renewables Cede Ground to Other Green Technologies
Energy Efficiency, Energy Storage and Green Auto technologies steal deal share




                                                                                          Green
from Renewables. Greentech Software plays hold steady.




www.cbinsights.com
33                                               Venture Capital Activity Report | Q1 2011


Overall Median Sees Uptick Due to Automotive Investments
Early stage medians remain fairly flat, while later stage sees medians spike on the back




                                                                                             Green
of Fisker Automotive investment.




www.cbinsights.com
34                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     CALIFORNIA




www.cbinsights.com
35                                                         Venture Capital Activity Report | Q1 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
36                                                Venture Capital Activity Report | Q1 2011


California Investment Dollars Explode, Up 47% Since Q4
Venture investment in California sees massive growth – significantly higher than levels




                                                                                              California
within recent history. Deal volume, however, falls 7% sequentially and 3% YoY.




www.cbinsights.com
37                                                Venture Capital Activity Report | Q1 2011


Internet #1 in Cali; Energy Surpasses Healthcare in Dollars




                                                                                              California
Internet and Healthcare again combine for more than 60% of overall VC deal volume
in California, but Energy & Utilities surpasses Healthcare as #2 in investment dollars




                                                                  Quarter Highlights

                                                                  287 deals | $3,876M

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

                                                                  Top Five Deals
                                                                   BrightSource Energy
                                                                   Miasole
                                                                   Tabula
                                                                   Coda Automotive
                                                                   Fulcrum BioEnergy


                                                                  Top Cities
                                                                  San Francisco
                                                                    72 deals | $533M
                                                                  Santa Clara
                                                                    7 deals | $379M
                                                                  Palo Alto
                                                                    23 deals | $322M
                                                                  Mountain View
                                                                    20 deals | $222M
                                                                  Redwood City
                                                                    14 deals | $215M
                                                                  Oakland
                                                                    3 deals | $211M
                                                                  Irvine
                                                                    3 deals | $196M
                                                                  San Jose
                                                                    11 deals | $193M
                                                                  Sunnyvale
                                                                    10 deals | $170M
                                                                  San Leandro
                                                                    1 deals | $135M




www.cbinsights.com
38                                               Venture Capital Activity Report | Q1 2011


Share of Dollars Towards Internet and Healthcare Falls
Energy & Utilities emerges as the #2 breadwinner stealing share from both Internet




                                                                                             California
and Healthcare. Deal share remains largely consistent with prior quarters.




www.cbinsights.com
39                                               Venture Capital Activity Report | Q1 2011


Cali Early Stage Deal and Dollar Volume Up Materially YOY
Early stage deal volume and investment dollars do remain consistent over prior quarter.




                                                                                             California




www.cbinsights.com
40                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     MASSACHUSETTS




www.cbinsights.com
41                                                 Venture Capital Activity Report | Q1 2011




                                                                                               Massachusetts
Massachusetts Sees Deals and Dollars Increase
First time in last five quarter that both deals and dollars up on sequential basis. Good
rebound over Q3 2010 funding nadir with deals getting back to historical range.
Overall, funding levels still down 20% year-over-year.




www.cbinsights.com
42                                               Venture Capital Activity Report | Q1 2011




                                                                                               Massachusetts
Healthcare & Internet Still the Centerpiece in Mass
Healthcare and Internet combine for over half of investment dollars and deal volume.
Mobile is a solid #3 as Software, Energy and Computer Hardware round out the field.




                                                                 Quarter Highlights

                                                                 85 deals | $719M

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

                                                                 Top Five Deals
                                                                  Harvest Power
                                                                  RainDance Technologies
                                                                  Genocea Biosciences
                                                                  HubSpot
                                                                  1366 Technologies

                                                                 Top Cities
                                                                  Cambridge
                                                                    19 deals | $163M
                                                                  Waltham
                                                                    12 deals | $114M
                                                                  Marlborough
                                                                    3 deals | $61M
                                                                  Lexington
                                                                    3 deals | $53M
                                                                  Boston
                                                                    6 deals | $46M
                                                                  Littleton
                                                                    3 deals | $39M
                                                                  North Lexington
                                                                    1 deals | $28M
                                                                  Newton
                                                                    3 deals | $25M
                                                                  Chelsea
                                                                    1 deals | $20M
                                                                  Burlington
                                                                    4 deals | $18M




www.cbinsights.com
43                                               Venture Capital Activity Report | Q1 2011




                                                                                             Massachusetts
Mobile & Energy Take ~30% of Funding
Internet deal share up YoY while Healthcare stays flat. Energy and Mobile both register
strong quarters in share of investment dollars and deals.




www.cbinsights.com
44                                               Venture Capital Activity Report | Q1 2011




                                                                                             Massachusetts
Early Stage Deal Share Still High, Dollar Share Down
Early stage deal volume share up nicely YoY and on sequential basis. Share of
investment dollars give way to Series B and later stage deals consistent with Q4 2010.




www.cbinsights.com
45                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     NEW YORK




www.cbinsights.com
46                                              Venture Capital Activity Report | Q1 2011


New York Venture Capital Activity Continues Momentum




                                                                                            New York
New York sees another strong quarter, with deals up and investment dollars down only
slightly from a raging Q4. Investment dollars up 40% year-over-year.




www.cbinsights.com
47                                               Venture Capital Activity Report | Q1 2011


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




                Twitter                           Financing Newsletter
                Follow us @cbinsights             Click here to get a daily summary of
                                                  every VC, angel and growth equity deal.




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




www.cbinsights.com
48                                           Venture Capital Activity Report | Q1 2011


Internet Continues Dominance in New York




                                                                                         New York
Internet consumes 60% of venture funding in New York. Computer Hardware &
Services has a strong showing, taking 18% of total investment.




                                                             Quarter Highlights

                                                             72 deals | $447M

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

                                                             Top Five Deals
                                                              AppSense
                                                              Adkeeper
                                                              2tor
                                                              Kaltura
                                                              Boxee

                                                             Top Cities
                                                              New York
                                                                61 deals | $383M
                                                              Brookyln
                                                                1 deals | $20M
                                                              Irvington
                                                                1 deals | $15M
                                                              Oneonta
                                                                1 deals | $12M
                                                              Brooklyn
                                                                2 deals | $7M




www.cbinsights.com
49                                              Venture Capital Activity Report | Q1 2011


Internet and Computer Hardware & Services Grow Share




                                                                                            New York
NY’s internet focus continues. Mobile deal volume share also shrinks versus Q4.




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50                                               Venture Capital Activity Report | Q1 2011


Many Seeds Being Planted in New York




                                                                                             New York
One out of every five deals in New York was a Seed deal, while overall, early stage
consumed 67% of deal volume and nearly half of all dollars invested. Significantly
above national averages for early stage and especially seed VC deals.




www.cbinsights.com
51                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     WASHINGTON




www.cbinsights.com
52                                              Venture Capital Activity Report | Q1 2011


Washington Venture Funding Remains in a Slump




                                                                                            Washington
Washington’s venture woes continue as investment dollars stay flat versus Q4, down
14% year-over-year. On a positive note, deal volume sees a small uptick.




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53                                               Venture Capital Activity Report | Q1 2011


I Can Has Internet: Cheezburger Network Tops Web Deals




                                                                                             Washington
Internet consumes over half of all Washington funding dollars, led by a large investment
in the Cheezburger Network. Energy, Mobile and Software round out the field.




                                                                 Quarter Highlights

                                                                 31 deals | $119M

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

                                                                 Top Five Deals
                                                                  Cheezburger Network
                                                                  nLight
                                                                  Doxo
                                                                  Tier 3
                                                                  Physware

                                                                 Top Cities
                                                                  Seattle
                                                                    19 deals | $82M
                                                                  Bellevue
                                                                    6 deals | $19M
                                                                  Vancouver
                                                                    1 deals | $11M
                                                                  Issaquah
                                                                    1 deals | $2M
                                                                  Shoreline
                                                                    1 deals | $2M
                                                                  Redmond
                                                                    1 deals | $2M




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54                                                Venture Capital Activity Report | Q1 2011


Internet Wins, Healthcare Continues Disappearing Act in Q1




                                                                                              Washington
Healthcare continues steep decline in share of deals and investment dollars, falling for
the third straight quarter. Internet loses deal share, but funding share grows.




www.cbinsights.com
55                                              Venture Capital Activity Report | Q1 2011


Early Stage Consumes Over Half of Overall Investment




                                                                                            Washington
Early stage deals comprise half of overall deal volume, while Series A consumes 54%
of overall investment. Seed deal volume share falls, giving way to Series A.




www.cbinsights.com
56                             Venture Capital Activity Report | Q1 2011




     Q1 2011 Venture Capital

     TEXAS




www.cbinsights.com
57                                                Venture Capital Activity Report | Q1 2011


Texas Venture Funding Sees Uptick, Remains Strong




                                                                                              Texas
Texas exceeds $300 million in venture investment for the third straight quarter, while
deal volume stays fairly stable. Investment dollars up 19% year-over-year.




www.cbinsights.com
58                                              Venture Capital Activity Report | Q1 2011


Texas Sees Diversity in Q4 with Internet and Energy Up Top




                                                                                                 Texas
Internet wins share of deal volume while Energy wins share of dollars in Texas.
Beyond that, Mobile, Healthcare and Business Products & Services all see dealflow.




                                                                Quarter Highlights

                                                                34 deals | $314M

                                                                Top Sector
                                                                  # of Deals – Internet
                                                                  $ of Funding – Bus. Prods. &
                                                                  Svcs.

                                                                Top Five Deals
                                                                 NEOS GeoSolutions
                                                                 Dachis Group
                                                                 Emerus Hospital Partners
                                                                 PCH International
                                                                 Uplogix

                                                                Top Cities
                                                                 Austin
                                                                   20 deals | $184M
                                                                 Houston
                                                                   5 deals | $81M
                                                                 Dallas
                                                                   4 deals | $15M
                                                                 West Lake Hills
                                                                   1 deals | $13M
                                                                 Richardson
                                                                   2 deals | $12M
                                                                 Plano
                                                                   1 deals | $7M
                                                                 Addison
                                                                   1 deals | $2M




www.cbinsights.com
59                                               Venture Capital Activity Report | Q1 2011


Healthcare and Internet Dollars Shrink, Energy Grows in Q1




                                                                                             Texas
Healthcare share of deals and dollars shrinks substantially in Texas since Q4. Internet
wins share of overall deals, but loses ground to Energy and others in terms of dollars.




www.cbinsights.com
60                                                Venture Capital Activity Report | Q1 2011

Early Stage Investment Sees Lower Deal Volume in Texas




                                                                                              Texas
Seed VC deals do not register for the 2nd straight quarter while share of Series A deals
shrinks substantially vs. Q4. Share of early stage dollars, however, are stable.




www.cbinsights.com
61                                                                     Venture Capital Activity Report | Q1 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.



www.cbinsights.com
                                                  Venture Capital Activity Report | Q1 2011




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   America’s Most Promising Companies
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 The best will appear on Forbes' second annual list of America's Most Promising
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                            To learn more or to apply, visit
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63                                               Venture Capital Activity Report | Q1 2011


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