Latest CVC Statistics April 26, 2006
Mark G. Heesen President
Beyond the simplistic observations …
Corporate Venture Capital Investment – Not a Passing Fad!
Corporate VC Peaked in 2000 at >1/4 of deals and 1/6 of the money
35% 30% 25% 20% 15% 10% 5% 0%
% of Deals % of Dollars 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1Q06 10% 7% 13% 7% 17% 8% 27% 16% 31% 16% 25% 12% 21% 9% 18% 7% 20% 7% 21% 7% 20% 7%
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial
Corporate Venture Capital Groups Had Become Very Involved
$20,000 $15,000 $10,000 $5,000 $0
$M
1996 709
1997 978
1998 1,724
1999
2000
2001
2002 1,899
2003 1,299
2004 1,450
2005 1,472
1Q06 397
8,281 16,706 4,962
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial
In Rounds with Corporate VC Participation, CVCs (Shown in Green) Now Comprise a Smaller Part
$20
Average Round ($M)
$15 $10 $5 $0
1998 3.64 3.50
1999 5.13 7.18
2000 8.07 8.53
2001 5.59 5.21
2002 4.81 3.55
2003 5.20 2.97
2004 5.77 2.82
2005 5.90 2.75
1Q06 4.88 2.58
Non-Corp $ Corp VC $
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial
In Q1, CVCs Invested in 20% of the deals but were investors in 60% of the IPOs 70%
60% 50% 40% 30% 20% 10% 0%
% of Deals % of IPOs 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1Q06 10% 22% 13% 28% 17% 37% 27% 57% 31% 61% 25% 29% 21% 46% 18% 55% 20% 57% 21% 55% 20% 60%
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial
Despite perceptions, Corporate VC is only slightly more heavily weighted toward the life sciences …
(2005 & 1Q06)
Corporate Venture Capital All US VC
12 others 30% Semi 10% Telecomm 12%
SW 19% Bio 16% Med Dev 13%
17 other 34% Semi 8% Med Dev 10%
SW 21% Bio 16% Telecom 11%
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Financial
The Exit Scene the importance of acquisitions has become clear over the past several years
IPO Levels Increased in 2004 but rally was not sustained
$30 $20 $10 $0
Offer ($ B)
1995 7.5
1996 11.1
1997 4.5
1998 3.5
1999 18.8
2000 25.5
2001 3.5
2002 2.5
2003 2.0
2004 11.0
2005 1Q06 4.5 0.5
Source: Thomson Financial/National Venture Capital Association
What’s in the IPO Pipeline?
IPOs During Period and Registration Counts at Period End 100
50
0
IPOs Done In Reg at EOY
2003 29 31
2004 93 57
2005 56 16
1Q06 10 24
Source: Thomson Financial/National Venture Capital Association
M&A Proceeds Vary Greatly As the Mix between “Good” Exits and Fire Sales Shift
$80 $60 $40 $20 $0
Acq $B 1997 1998 1999 2000 2001 2002 2003 2004 2005 1Q06 7 9 38 68 17 8 8 15 16 5
Source: Thomson Financial/National Venture Capital Association
Private Equity Returns Converging on Expectations?
Fund Type Early VC Later VC > All VC Buyouts All PE S&P 500 NASDAQ
As of 9/30/2005
1yr 10% 13% 20% 33% 27% 10% 13%
5 yr -13% -8% -9% 3% -1% -3 -10
20 yr 20% 14% 17% 13% 14% 11% 12%
Source: Thomson Financial/National Venture Capital Association
For the Past 7 Years, Investment Has Exceeded LP Distributions
$120,000 $100,000
$ Million
$80,000 $60,000 $40,000 $20,000 $0
1996 1998 2000 2002 2004
Inv ($M)
Dist to LPs ($M)
Source: Thomson Financial/National Venture Capital Association
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