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Q3 2011's quarterly venture capital totals came in at $7.9B invested in 790 deals as VCs shrugged off economic uncertainties. 2011 might be a record year?
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Venture Capital Activity Report | Q3 2011
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 2011
Q3 2011 – This Quarter in Venture Capital
Quarter sees dealflow and funding levels reach record levels. If current pace continues,
2011 could be biggest year for venture capital in a decade.
VCs shrugged off market turmoil, economic uncertainty and their own difficulties raising funds from limited partners and
opened their checkbooks (a lot) in Q3 2011 showering 790 firms with $7.9B of funding.
Of course, the looming question after seeing this type of blowout quarter is whether or rather how long this can continue
given VCs are having a tough time raising funds. If the final quarter of the year comes in at similar levels, we are looking
at a $30B+ year for VCs which could be a decade long high. So at some point, something has to give. But until then,
entrepreneurs can enjoy the VCs for however long they choose to “make it rain”.
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 Twitter’s
$800M funding but since $400M was for cashing out current stockholders, only $400M is included in our data. 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 in the round as well. 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.
Did NY Just Win the Race for #2 in VC? Green Tech / Clean Tech Bounces Back
In Q3 2011, NY schooled Massachusetts with both From its weak Q2 performance, green tech saw some
deals and dollars jumping to record levels while pep in its step with deal and dollar increases. Cali, Mass
Massachusetts dipped on both dimensions. For the first and Texas were leading geographies. Unlike tech and
time ever, NY beat Mass on an absolute basis for both healthcare, green tech saw seed deals disappear and
VC deals and dollars invested in a quarter. NY early-stage funding hit a five quarter low. Renewable
registered $831M invested over 86 deals while Mass energy which continues to be the top destination for green
came in at $710M invested over 83 deals. VC investment continues atop the areas of green tech
interest but has been steadily declining over time.
VCs Continue to Plant Their Seeds – Optionality Rules
The Seed VC phenomena which we’d uncovered and California Still Reigns (Boring)
detailed many quarters ago continues to gain steam California is still the top destination for funding and deals.
with 15% of the quarter’s deals going to seed Software and energy saw an uptick stealing share from
investments. While primarily a tech VC tool, healthcare healthcare and internet VC. Early stage dollars did shrink
investors increasingly used Seed VC investments in Q3 in the quarter.
2011 as well. The Seed VC investment gives investors
a relatively low-cost option on companies they invest in. Massachusetts – Is Lack of Focus a Problem?
In essence, these investments require minimal capital Deals on a YoY basis were down slightly while NY and
outlay and allow an investor to see a business take Cali grew deals over the same period. The quarter’s
shape (or not) and then choose to invest in the future. It funding tally was buoyed by an energy mega-deal
also allows mores companies to get funded to pursue (Boston Power). While the state’s sector diversity can be
their entrepreneurial ambitions. viewed as good thing, is there a “jack of all trades, master
of none” issue facing Mass?
Healthcare VC – Somebody Get a Doctor
With chatter about an unfriendly regulatory landscape Texas Holds Strong
getting louder and a generally uncertain exit The Lone Star State retains its industry diversity across
environment, healthcare VC continued its consistent industry categories. Deal and dollar volume stayed
trend downwards registering 143 financings in Q3’11 vs. steady.
184 in Q3’10.
Washington Wakes Up (A Bit)
After wondering if folks were “Sleeping in Seattle” in Q2,
Washington sees a bit of a bounce back with large Zulily
deal. Deal volume remained flat. Healthcare sector grew
its overall share of Washington.
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3 Venture Capital Activity Report | Q3 2011
$7.9B over 790 Deals – Another Nine Quarter High
Q3’ 11 marked the 4th consecutive quarter of increased deals and funding and puts
2011 on track to be a $30B year and potentially the biggest in the last 10 years.
Quarterly VC Investment and Deal Volume Trend
Q3 '09 to Q3 '11
768 790
730 715 735 738
678 687
612
$7.9
$7.5 $7.6
$6.5
$6.1 $5.9 $5.9
$5.5 $5.4
Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Investment ($M) Deals
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4 Venture Capital Activity Report | Q3 2011
New York’s Deal Share Ties Massachusetts
While Cali, Mass and NY continue to own 60+% share of deals, New York’s share
jumped into the double digits climbing to levels of its northern brother, Mass.
Share of Venture Capital by State - Number of Deals
Five Quarter Trend
33% 29% 30% 28% 31%
4% 4% 4%
5% 5% 4%
5% 5% 4%
5% 9% 8%
7% 10% 11%
11% 12%
12% 12% 11%
42% 40% 44% 40%
38%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California Massachusetts New York Texas Washington Other
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5 Venture Capital Activity Report | Q3 2011
NY’s Funding Share Hits Double Digits for First Time (Ever)
While California & Massachusetts’ share of overall U.S. venture capital funding in Q3
dipped, NY’s momentum continued with 1 of every 10 VC dollars flowing to the state.
Share of Venture Capital by State - Dollars of Funding
Five Quarter Trend
20%
27% 26% 26%
36% 2%
2% 4%
4% 7% 2%
4% 4%
7% 2% 6%
5% 10%
5% 10% 16%
9% 7% 9%
10%
49% 53% 51% 48%
40%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California Massachusetts New York Texas Washington Other
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6 Venture Capital Activity Report | Q3 2011
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7 Venture Capital Activity Report | Q3 2011
Q3’11 Sees Steady Deal and Dollar Financing Pace
Despite turmoil in capital markets and general economic uncertainty, Q3’11 registered
three unusually consistent months of funding and deals.
Monthly VC Investment and Deal Volume Trend
January 2010 to June 2011
298
283 281 270 267 267 263 260
259
244 239 231
212 $3.2 218
205
190 193 $3.0
178 $2.7 $2.7 $2.7
$2.5 $2.6 $2.5
$2.2 $2.3 $2.3
$2.1
$1.7 $1.8 $1.7
$1.6 $1.7
$1.5
Series2 Series1
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8 Venture Capital Activity Report | Q3 2011
Seed VC Hits Record Number of Deals
The seed VC trend continued grabbing 15% of deals in Q3. Overall, early stage
funding contracted, losing ground to mid and later stage financings.
Share of Venture Capital by Series - Number of Deals
Five Quarter Trend
10% 7% 6% 9% 7%
7% 9% 9%
8% 11%
15% 18% 15% 15%
17%
24% 22% 24% 25%
22%
33% 36% 36% 29%
29%
11% 11% 10% 12% 15%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
16% 16% 14%
21% 22%
12%
20% 22%
16% 16%
20%
22% 23% 21%
28%
30%
23% 21% 26%
20%
20% 17% 17%
15% 13%
1% 1% 1% 1% 1%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
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9 Venture Capital Activity Report | Q3 2011
Mobile Dials up the Deals While Healthcare Gets Sick
Mobile’s deal share hit a record while healthcare deals dipped to multi-year lows. Tech
(net, mobile, hardware, software) took over 60% of deals and 50%+ of funding.
Share of Venture Capital by Sector - Number of Deals
Five Quarter Trend
17% 13% 15% 15% 14%
7% 10% 9% 13%
11%
4% 3% 4%
8% 3% 4%
8% 5% 8% 7%
6% 6% 7% 5% 5%
33% 37% 39% 39% 39%
26% 24% 20% 19% 18%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
15% 14% 17% 14% 14%
5% 6% 7% 7%
3% 8% 5% 3%
8% 7% 3% 6%
8% 4% 6%
8% 6% 11%
9% 16%
23% 39% 36%
38%
31%
33%
24% 21% 25% 21%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Computer Hardware & Services Mobile & Telecommunications
Other
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10 Venture Capital Activity Report | Q3 2011
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11 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
INTERNET
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12 Venture Capital Activity Report | Q3 2011
VCs Continue to Bet on the “Webification” of the World
Web companies hit another five-quarter high in terms of both deals and dollars.
Internet
Internet funding comes ever so close to the $3B quarterly level.
Internet VC Investment and Deal Volume Trend
Last Five Quarters
298 308
286
272
233
$2,989
$2,742
$2,543
$2,315
$1,253
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
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13 Venture Capital Activity Report | Q3 2011
NY’s Internet Mojo on Display While Mass Flounders
Cali continues its reign at the top while NY plants itself firmly as the #2 destination for
Internet
Internet VC deals and dollars. Mass falls to a distant 3rd overall on deals and 4th on
financings due to Virginia-based Cvent’s large round.
Quarter Highlights
VC Deal Volume (#) in Internet by State, Q3 2011
California 308 deals | $2,989M
2% New York
17%
2% Virginia Top Five Deals
1% Illinois
39% Twitter
3% Massachusetts Cvent
Washington AirBnB
4%
Texas Tumblr
8% Utah ZocDoc
New Jersey
3% Oregon Top Cities
20%
1% All Other
San Francisco, CA
www.cbinsights.com 44 deals | $717M
New York, NY
59 deals | $584M
Los Angeles, CA
8 deals | $232M
VC Investment ($) in Internet by State, Q3 2011 McLean, VA
2% 1 deals | $136M
1% 1% Palo Alto, CA
California
2% 11 deals | $91M
7% New York
3% Chicago, IL
Virginia 7 deals | $91M
3%
Illinois Redwood City, CA
3% 4 deals | $88M
Massachusetts
San Mateo, CA
6% Washington
52% 8 deals | $87M
Texas
Seattle, WA
Utah 9 deals | $71M
20% New Jersey Foster City, CA
Oregon 2 deals | $62M
All Other
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14 Venture Capital Activity Report | Q3 2011
NY Wins Big on Deal/Dollar Share; Cali Grows Dollar Share
Cali hits 5 qtr low on deals and high on dollars (due to Twitter). NY took share from
Internet
others hitting deal and dollar records. Mass holds flat on deals and dips big on dollars.
Share of Internet VC by State - Number of Deals
Last Five Quarters
23% 21% 26% 25% 25%
6% 6% 3%
5% 4%
11% 8% 8% 8% 8%
3% 2% 3%
1% 5%
14% 14%
15% 15% 20%
44% 47% 48%
42% 39%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California New York Illinois Massachusetts Washington Other
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Share of Internet VC by State - Dollars of Funding
Last Five Quarters
15% 19%
25% 21%
3% 28%
2% 5% 3%
5% 3%
5% 2% 3%
8% 22% 10%
24% 20%
12% 3%
11% 14%
10%
50% 52%
45% 43%
39%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California New York Illinois Massachusetts Washington Other
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15 Venture Capital Activity Report | Q3 2011
Seed Internet Deals Up; Mid/Late Stage Funding Solid
Seed deals in web companies show continued growth while Series A recovers a bit
Internet
from its Q2 hiccup. Overall, mid and later stage funding stays strong.
Share of Internet VC by Series - Number of Deals
Last Five Quarters
4% 1% 5% 4%
7% 6%
5% 5% 8% 7%
15% 14%
13% 12%
19%
20% 25% 25%
18% 26%
42% 40% 33%
38% 31%
18% 19%
13% 13% 14%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
1%
10%
7% 25% 28% 23%
30%
23% 12%
27% 15%
23% 18%
27% 18%
19%
25% 30%
22%
16%
31%
20% 15% 15%
12%
1% 1% 2% 1% 2%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
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16 Venture Capital Activity Report | Q3 2011
Industry Diversity Continues with Internet Investments
Deal and dollar distribution remains diverse with many of the usual suspects (social,
Internet
advertising). Daily deal investment falls off cliff while security, ecommerce apparel,
analytics and travel emerge as well as hot industries for VC investments.
VC Deal Volume (#) in Internet by Sub-Industry, Q3 2011
1% Social
10% Advertising, Sales & Marketing
Travel (internet)
10% Bus. Intelligence, Analytics & Performance Mgmt
Apparel & Accessories
43%
Monitoring & Security
7% Health & Wellness
Data Storage
5%
Data & Document Management
5% Content Management
Gaming
Food & Grocery
4%
News & Discussion
3% 1% 3% 3%
3% Information Providers & Portals
1% All Other
1%
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VC Investment ($) in Internet by Sub-Industry, Q3 2011
Social
Advertising, Sales & Marketing
23% Travel (internet)
26% Bus. Intelligence, Analytics & Performance Mgmt
Apparel & Accessories
Monitoring & Security
Health & Wellness
2% 7% Data Storage
2% Data & Document Management
6%
2% Content Management
3% 6% Gaming
3% 5% Food & Grocery
4% 5%
3% News & Discussion
3% Information Providers & Portals
All Other
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17 Venture Capital Activity Report | Q3 2011
Seed and Series A See Climbing Median Deal Size
Later stage Internet deals (Series D+) continue to see volatile medians while early
Internet
stage medians tick up hitting five quarter highs for both Seed VC and Series A.
Internet Median Deal Size by Quarter
($ Million)
$20.0
$14.0
$10.0
$6.8
$3.6
$1.0
Seed Series A Series B Series C Series D Series E +
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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18 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
HEALTHCARE
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19 Venture Capital Activity Report | Q3 2011
Healthcare Deal Funding Continues Decline
Healthcare
Significant uncertainty about prospects for healthcare loom (regulatory environment
and exit concerns) which appear to be impacting VC investment in the space.
Healthcare VC Investment and Deal Volume Trend
Last Five Quarters
184
173
150 147 143
$1,894
$1,753
$1,677
$1,541 $1,561
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
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20 Venture Capital Activity Report | Q3 2011
Once Again - Cali and Mass Dominate Healthcare
Healthcare
California and Massachusetts combine for 53% of deal share and 61% of dollars. As
usual, the rest of healthcare’s deals and dollars are sprinkled across numerous states.
Quarter Highlights
VC Deal Volume (#) in Healthcare by State, Q3 2011 143 deals | $1,677M
California Top Five Deals
Massachusetts
19% New Jersey
Valeritas
29% Nevro
New York
NeuroPace
4% Minnesota Verinata Health
2% Texas Sarcode
4% Pennsylvania
4%
Ohio
5% Tennessee Top Cities
24%
Washington
4% All Other
Cambridge, MA
3% 15 deals | $175M
2%
www.cbinsights.com Bridgewater, NJ
2 deals | $158M
Mountain View, CA
3 deals | $94M
VC Investment ($) in Healthcare by State, Q3 2011 San Francisco, CA
5 deals | $75M
2% San Carlos, CA
2% California 3 deals | $72M
2% 9% Massachusetts Menlo Park, CA
3% New Jersey 3 deals | $63M
3% New York Lexington, MA
39% 3 deals | $61M
3% Minnesota
Palo Alto, CA
Texas
4% 2 deals | $60M
Pennsylvania Waltham, MA
11% Ohio 3 deals | $46M
Tennessee Calabasas, CA
Washington 1 deals | $37M
22%
All Other
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21 Venture Capital Activity Report | Q3 2011
Mass. Grows Deal Share, Reaching 5-Quarter High
Healthcare
Venture deal and dollar share stays consistent with historical levels. NJ climbs on
funding share due to Valeritas of Bridgewater, NJ raising a mega $150M round.
Share of Healthcare VC by State - Number of Deals
Last Five Quarters
39% 37% 35% 37% 36%
3% 3% 5%
4% 7% 5% 3% 4%
2% 1% 2%
8% 6%
4% 3% 19% 20%
13% 24%
17%
33% 37% 35%
28% 29%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California Massachusetts New Jersey Pennsylvania Texas Other
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Share of Healthcare VC by State - Dollars of Funding
Last Five Quarters
24% 19% 22%
29% 25%
3%
6% 3% 3%
7% 4%
10% 3% 11%
6% 31%
4% 5%
19%
13% 22%
17%
42% 45% 46%
39% 39%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California Massachusetts New Jersey Pennsylvania Texas Other
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22 Venture Capital Activity Report | Q3 2011
Seed VC Hits Record High in Healthcare in Q3 2011
Healthcare
Healthcare VCs attracted to “optionality” of seed VC deals jump on that trend. Mid-
and later-stage deals consume most of the quarter’s funding.
Share of Healthcare VC by Series - Number of Deals
Last Five Quarters
6% 10% 9%
13% 14%
10%
14% 12%
10%
16% 13%
16% 18%
18%
19%
23%
26% 27%
26%
24%
39%
27% 23%
28%
29%
9% 11%
6% 1% 5%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
6% 10%
16% 13%
21%
16%
18%
14% 20%
15%
22% 35%
21% 34%
27%
30% 19% 27%
23% 28%
24% 18%
17% 14% 10%
1% 1% 0% 0% 1%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
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23 Venture Capital Activity Report | Q3 2011
Medical Devices, Pharma and Biotech Rule Q3
Healthcare
Medical devices continue their leading position for deals and dollars within the
Healthcare sector, followed by strong quarters for both Pharma and Biotech.
VC Deal Volume (#) in Healthcare by Industry, Q3 2011
1% 2% Medical Devices & Equipment
1%
Pharmaceuticals / Drugs
4%
5% Biotechnology
Drug Delivery
11% Drug Development
48%
Medical Facilities & Services
2%
Elective & Aesthetic Medicine
11% Drug Discovery
Pharmaceutical Distribution & Wholesale
15% All Other
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VC Investment ($) in Healthcare by Industry, Q3 2011
3%
2%
1% Medical Devices & Equipment
4%
Pharmaceuticals / Drugs
Biotechnology
6%
Drug Delivery
Drug Development
10% 45%
Medical Facilities & Services
Elective & Aesthetic Medicine
12%
Drug Discovery
Pharmaceutical Distribution & Wholesale
17% All Other
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24 Venture Capital Activity Report | Q3 2011
Healthcare Medians Mixed in Q3
Healthcare
Unlike Q2 which saw lower medians across the board, Q3 is mixed with early-stage
and later-stage deals seeing declining median rounds while the middle of the pack
sees increased median deal size.
Healthcare Median Deal Size by Quarter
($ Million)
$15.2
$14.4
$7.5
$5.5
$3.6
$0.6
Seed Series A Series B Series C Series D Series E +
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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25 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
GREEN & CLEAN TECH
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26 Venture Capital Activity Report | Q3 2011
Green Tech Bounces Back in Q3 After Relatively Slow Q2
Q3 sees funding levels exceed $1B, exhibiting bounce back from the steep decline
Green
experienced in Q2. Dealflow also sees a slight uptick.
Green VC Investment and Deal Volume Trend
Last Five Quarters
86
70
65
61 59
$1,936
$1,220
$790 $790 $781
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
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27 Venture Capital Activity Report | Q3 2011
Usual Suspects: Cali, Mass and Texas Occupy Top 3 Spots
Cali remains the overwhelming leader in terms of Green Tech deals and dollars. Mass
Green
and Texas round out the top 3 of a crowded field.
Quarter Highlights
VC Deal Volume (#) in Green by State, Q3 2011
70 deals | $1,220M
California
1% Massachusetts
4% 12% Top Five Deals
Texas
Bloom Energy
Colorado
Boston-Power
3% 4% 43% Illinois HelioVolt
1% Oregon ClearEdge Power
4% Pennsylvania BridgeLux
6% Washington
Michigan Top Cities
10%
New York
12% Sunnyvale, CA
All Other
3 deals | $236M
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1 deals | $125M
Austin, TX
4 deals | $107M
VC Investment ($) in Green by State, Q3 2011 San Francisco, CA
2% 8 deals | $82M
1% 2%
California
Hillsboro, OR
3% 1 deals | $74M
4% Massachusetts
Boulder, CO
Texas 2 deals | $72M
6% Colorado Bolingbrook, IL
Illinois 1 deals | $50M
6% 43%
Oregon Palo Alto, CA
Pennsylvania
1 deals | $38M
8% Fremont, CA
Washington
2 deals | $37M
10% Michigan Kirkland, WA
New York 1 deals | $37M
15% All Other
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28 Venture Capital Activity Report | Q3 2011
Cali Loses Investment Share to Mass and Colorado
Boston Power and HelioVolt solidify Massachusetts’ and Texas’ spot in the top three
Green
for overall Green Tech investment.
Share of Green VC by State - Number of Deals
Last Five Quarters
28% 31% 26%
40% 42%
3% 4%
2% 6%
15% 10%
2% 2% 10%
3% 5%
3%
8% 14% 9% 11%
9%
8%
46% 41% 42% 43%
35%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California Massachusetts Texas Colorado Illinois Other
www.cbinsights.com
Share of Green VC by State - Dollars of Funding
Last Five Quarters
12% 12% 16% 18%
3% 26%
13% 2%
6%
21% 7%
4% 8%
4% 24% 13% 10%
8%
1% 15%
11%
73%
59%
49%
39% 43%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
California Massachusetts Texas Colorado Illinois Other
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www.cbinsights.com
29 Venture Capital Activity Report | Q3 2011
Seed Disappears in Q3; Early Stage at 5-Quarter Low
Green Tech seed falls off a cliff as overall early stage sees 5-quarter low in terms of
Green
both deals and dollars. Later stage dominates dollar share.
Share of Green VC by Series - Number of Deals
Last Five Quarters
7% 2% 7% 7%
10% 13%
7% 7%
17%
10% 19% 12%
19%
24% 19%
39%
38% 35%
24% 32%
27% 13%
24%
31%
24%
10% 15%
7%
0%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
6% 4%
12%
19% 29%
22%
17% 42%
12%
16%
41%
35%
16%
20%
44%
18%
29% 26%
28%
18%
16% 9%
8% 7% 6%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
30 Venture Capital Activity Report | Q3 2011
Renewables #1, but Yields Ground to Energy Storage
Renewables retains top spot, but sees 5-quarter low in terms of deal share. Energy
Green
Storage has a strong quarter, led by Boston Power deal.
Share of Green VC by Industry - Number of Deals
Last Five Quarters
31% 29% 26%
40% 39%
3% 11%
7%
15% 3% 11% 7%
11%
9% 9%
8% 7% 8%
3%
3% 6% 3% 10%
46% 42%
39% 38% 36%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Renewables Automobile Manufacturing
Energy Storage Energy Efficiency
Green/Environmental Software Other
www.cbinsights.com
Share of Green VC by Industry - Dollars of Funding
Last Five Quarters
13%
28% 24% 26%
38% 10%
2% 6% 3%
5% 5%
3% 6%
15% 1%
7% 15% 17%
7% 5% 23%
6%
1%
49% 51% 50%
42% 43%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Renewables Automobile Manufacturing
Energy Storage Energy Efficiency
Green/Environmental Software Other
www.cbinsights.com
www.cbinsights.com
31 Venture Capital Activity Report | Q3 2011
Overall Median Sees Uptick Driven By Large Later Stage
Early stage medians fall a bit, but larger later stage deals drive overall medians higher.
Green
Green Median Deal Size by Quarter
($ Million)
$38.0
$21.1
$12.8 $10.3
$5.5 $8.7
$0.0
Seed Series A Series B Series C Series D Series E + Overall
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
www.cbinsights.com
www.cbinsights.com
32 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
CALIFORNIA
www.cbinsights.com
33 Venture Capital Activity Report | Q3 2011
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34 Venture Capital Activity Report | Q3 2011
Steady as She Goes: California Sustains Momentum
California sees fewer venture deals than last quarter, but investment grows slightly.
California
Deals and funding up 16% and 47% YoY, respectively.
California VC Investment and Deal Volume Trend
Last Five Quarters
336
310 315
288
271
$3,902 $3,833
$3,656
$2,607 $2,630
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
35 Venture Capital Activity Report | Q3 2011
$100M+ Twitter and AirBnB Rounds Lead Internet
California
Internet and Healthcare combine for over half of deal and investment share in
California. Bloom Energy also checks in with a large round.
Quarter Highlights
VC Deal Volume (#) in California by Sector, Q3 2011 315 deals | $3,833M
1%
3% 1% Healthcare
2% 5% Internet Top Sector
13% # of Deals – Internet
Energy & Utilities
$ of Funding – Internet
Software (non-internet/mobile)
18% Computer Hardware & Services
Top Five Deals
Mobile & Telecommunications
Twitter
Industrial
Bloom Energy
5% Electronics
38% AirBnB
8% Business Products & Services Palantir Technologies
Consumer Products & Services LegalZoom
6%
All Other
www.cbinsights.com Top Cities
San Francisco
89 deals | $1076M
Palo Alto
29 deals | $368M
VC Investment ($) in California by Sector, Q3 2011 Sunnyvale
14 deals | $362M
4% Los Angeles
2% Healthcare
4% 15 deals | $316M
Internet Mountain View
17%
Energy & Utilities 15 deals | $213M
11% Software (non-internet/mobile) Redwood City
Computer Hardware & Services 11 deals | $156M
5% San Jose
Mobile & Telecommunications
7 deals | $114M
8% Industrial San Mateo
Electronics 11 deals | $108M
9% 40% Business Products & Services Fremont
Consumer Products & Services 5 deals | $106M
All Other San Diego
14 deals | $105M
www.cbinsights.com
www.cbinsights.com
36 Venture Capital Activity Report | Q3 2011
Software and Energy are Big Movers in Q3 2011
Software and Energy grow share of deals and investment, taking share from Internet
California
and Healthcare. Field outside the top 5 sectors continues to grow share of deals.
Share of VC in California by Sector - Number of Deals
Last Five Quarters
24% 24% 26% 26% 29%
5% 3% 3%
8% 3% 6% 5%
7% 7%
5% 7% 9%
7% 4%
6%
38% 41% 42%
43%
38%
19% 18% 19% 15% 13%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
21% 21% 26% 21%
29%
8% 2% 5%
7% 2% 7% 8%
9% 9% 5%
6% 9%
11% 5%
20%
24% 38% 32% 40%
26%
28% 23% 24%
18% 17%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Computer Hardware & Services Other
www.cbinsights.com
www.cbinsights.com
37 Venture Capital Activity Report | Q3 2011
Early Stage Dealflow Strong, but Share of Dollars Shrinking
Seed and Series A rounds retain share of overall dealflow, but those investment sizes
California
are shrinking as early stage sees 5-quarter in Cali low in terms of dollar share.
Share of VC in California by Series - Number of Deals
Last Five Quarters
11% 6% 7% 9%
12%
8%
10% 11%
10% 12%
21%
18% 20% 16%
16%
23% 22%
24% 21% 18%
31% 29% 29%
27% 33%
11% 12% 8% 13% 13%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
14% 17% 17%
19%
28%
16% 12% 17%
20%
16%
21%
35% 28%
26% 18%
31%
20%
21% 19% 26%
16% 15% 15% 18%
12%
1% 1% 1% 1% 1%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
38 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
MASSACHUSETTS
www.cbinsights.com
39 Venture Capital Activity Report | Q3 2011
Massachusetts
As Red Sox Lose Steam, So Goes Mass’ VC Scene
Mass checks in with a healthy quarter totaling $710M of VC investment. However,
this represents a substantial step back from the boom experienced in Q2 2011.
Massachusetts VC Investment and Deal Volume Trend
Last Five Quarters
89
87
85
83
78 $1,143
$719 $710
$630
$466
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
40 Venture Capital Activity Report | Q3 2011
Massachusetts
VC Investment in Energy Jumps Ahead of Internet in Q2
Boston Power’s mega-round propels Energy into the two spot in Mass in terms of
investment dollars, behind only Healthcare. Internet stayed healthy in Mass.
Quarter Highlights
VC Deal Volume (#) in Massachusetts by Sector, Q3 2011 83 deals | $710M
2%
2%
4%
Healthcare
Top Sector
5% # of Deals – Healthcare
Internet
$ of Funding - Healthcare
Software (non-internet/mobile)
5%
41% Energy & Utilities Top Five Deals
6%
Mobile & Telecommunications Boston-Power
5% Computer Hardware & Services Enobia Pharma
Industrial Zafgen
Business Products & Services
Verastem
Fluidnet
30% Electronics
All Other
Top Cities
www.cbinsights.com Cambridge
26 deals | $208M
Westborough
1 deals | $125M
VC Investment ($) in Massachusetts by Sector, Q3 2011 Boston
14 deals | $69M
2% 2% 3% Lexington
2% Healthcare 5 deals | $62M
Internet Waltham
Software (non-internet/mobile) 7 deals | $60M
Amesbury
Energy & Utilities
22% 1 deals | $25M
Mobile & Telecommunications Woburn
53% Computer Hardware & Services 3 deals | $23M
Franklin
Industrial
2 deals | $12M
3% Business Products & Services Watertown
13%
Electronics 1 deals | $12M
All Other Wilmington
1 deals | $11M
www.cbinsights.com
www.cbinsights.com
41 Venture Capital Activity Report | Q3 2011
Massachusetts
Healthcare: 5-Quarter High in Terms of Deals and Dollars
Healthcare and Internet combine for over 70% of dealflow in Mass. Energy steals
investment share from Internet, Software and Mobile.
Share of VC in Massachusetts by Sector - Number of Deals
Last Five Quarters
16% 15% 15% 13% 13%
5% 8% 5%
10% 12% 5%
10% 13% 6%
3% 9% 7%
6% 6% 4%
30%
29%
27% 27%
29%
37% 41%
29% 33% 34%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Mobile & Telecommunications Other
www.cbinsights.com
Share of VC in Massachusetts by Sector - Dollars of Funding
Last Five Quarters
11% 9% 8%
14%
20% 5% 3%
2% 11% 5%
9% 6% 4% 6% 22%
4% 8%
6% 18% 24%
21% 13%
20% 15%
49% 52% 53%
41% 42%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Healthcare Internet
Energy & Utilities Software (non-internet/mobile)
Mobile & Telecommunications Other
www.cbinsights.com
www.cbinsights.com
42 Venture Capital Activity Report | Q3 2011
Massachusetts
Early Stage Shrinks to 5-Quarter Low in Massachusetts
Seed remains strong, taking 10% of overall dealflow. However, Series A sees 5-
quarter low in terms of deal share, while overall early stage investment share shrinks
for the fifth straight quarter.
Share of VC in Massachusetts by Series - Number of Deals
Last Five Quarters
2% 3%
5% 11% 7% 8%
11%
16% 7% 11% 14%
15%
15% 13% 12%
36%
31% 27%
33% 32%
28%
38% 25% 34% 24%
9% 13% 10%
3% 5%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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% 5%
13%
15% 24% 22%
19%
10%
19% 20% 15%
28%
46% 11%
35% 17%
38% 31%
19%
33%
23% 18%
18% 12%
0% 1% 0% 1% 1%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
43 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
NEW YORK
www.cbinsights.com
44 Venture Capital Activity Report | Q3 2011
Has New York Arrived and Become the Solid #2 for VC?
New York
New York’s 86 venture deals and $831M in Q3’11 put it firmly in 2nd place behind
California and pulling ahead of Massachusetts. Will this last?
New York VC Investment and Deal Volume Trend
Last Five Quarters
86
72
66 $831
61
51
$539
$466 $447
$245
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
45 Venture Capital Activity Report | Q3 2011
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46 Venture Capital Activity Report | Q3 2011
New York: All Internet All the Time
New York
Tumblr, ZocDoc and Buddy Media check in with $50M+, leading the internet sector’s
dominance of NY’s venture scene.
Quarter Highlights
VC Deal Volume (#) in New York by Sector, Q3 2011
86 deals | $831M
1% 1% Internet
5%
3% 6%
Healthcare Top Sector
Mobile & Telecommunications # of Deals – Internet
$ of Funding - Internet
7% Computer Hardware & Services
5%
Business Products & Services Top Five Deals
Electronics Tumblr
ZocDoc
72% Software (non-internet/mobile)
Buddy Media
Industrial TouchTunes Music
Tremor Video
All Other
www.cbinsights.com Top Cities
New York
76 deals | $754M
Brooklyn
2 deals | $25M
VC Investment ($) in New York by Sector, Q3 2011 Cold Spring Harbor
1 deals | $23M
Internet Yonkers
5% 1 deals | $13M
9% Healthcare Clifton Park
4%
Mobile & Telecommunications 1 deals | $10M
4%
Computer Hardware & Services
7% Business Products & Services
Electronics
71% Software (non-internet/mobile)
Industrial
All Other
www.cbinsights.com
www.cbinsights.com
47 Venture Capital Activity Report | Q3 2011
Internet Sees 5-Quarter High in Terms of Deal Share in NY
New York
Mobile shrinks back to normal levels, while Healthcare takes the number 2 spot in
terms of dollar share. Internet shows no signs of letting up.
Share of VC in New York by Sector - Number of Deals
Last Five Quarters
6% 10% 10%
2% 12% 17% 0% 2%
14% 5% 15% 3%
5% 4% 7%
8% 4% 5%
11% 7% 5%
9% 8%
71% 70% 72%
59% 60%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Internet Healthcare
Mobile & Telecommunications Computer Hardware & Services
Financial Other
www.cbinsights.com
Share of VC in New York by Sector - Dollars of Funding
Last Five Quarters
5% 10% 9%
13% 14%
16% 4%
6% 17% 4%
4%
9% 12% 18% 7%
1%
8% 3% 4%
13% 4%
73% 71%
63% 59%
53%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Internet Healthcare
Mobile & Telecommunications Computer Hardware & Services
Financial Other
www.cbinsights.com
www.cbinsights.com
48 Venture Capital Activity Report | Q3 2011
Early Stage Sees 5-Quarter Low in Terms of Deal Share
New York
Early stage falls to less than half of overall deal share in New York, with Seed losing
momentum. Series D+ experiences 5-quarter high.
Share of VC in New York by Series - Number of Deals
Last Five Quarters
2% 7% 2% 5%
5% 8%
5% 4% 15% 7% 5%
12% 14%
24% 25% 15%
25%
13% 26%
46%
46% 26%
39% 32%
21% 25%
17% 13% 15%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
4%
9%
16%
3%
31% 28%
10% 32%
13%
10%
34%
22%
44% 30% 25%
42% 19% 23%
41% 12%
13% 13% 13%
2% 2% 4% 3% 2%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
49 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
WASHINGTON
www.cbinsights.com
50 Venture Capital Activity Report | Q3 2011
Washington Revival? VC Investment Up 49% Versus Q2
Washington
Venture investment sees a strong pop in Washington, but dealflow remains unaffected.
Deal and investment levels still down 17% and 11%, respectively YoY.
Washington VC Investment and Deal Volume Trend
Last Five Quarters
34
31
28 29 28
$222
$197
$132
$119 $119
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
51 Venture Capital Activity Report | Q3 2011
Zulily Keeps Internet in Top Spot Followed by Healthcare
Washington
Internet consumes just under half of overall dealflow and dollars in Q3. Healthcare and
Mobile convincingly occupy the #2 and #3 spots, respectively.
Quarter Highlights
VC Deal Volume (#) in Washington by Sector, Q3 2011 28 deals | $197M
Healthcare Top Sector
4% 11% # of Deals – Internet
Internet
21% $ of Funding - Internet
Energy & Utilities
Mobile & Telecommunications Top Five Deals
14%
Software (non-internet/mobile) Zulily
Inrix
Computer Hardware & Services
4% nLight
Business Products & Services RF Surgical Systems
Food & Beverages Theraclone Sciences
46%
All Other
Top Cities
Seattle
www.cbinsights.com
18 deals | $104M
Kirkland
2 deals | $45M
Bellevue
4 deals | $22M
VC Investment ($) in Washington by Sector, Q3 2011 Vancouver
1 deals | $18M
Healthcare Bothell
1 deals | $6M
17% Internet
Sumner
28% Energy & Utilities 1 deals | $2M
Mobile & Telecommunications
Software (non-internet/mobile)
Computer Hardware & Services
1%
8% Business Products & Services
45% Food & Beverages
1% All Other
www.cbinsights.com
www.cbinsights.com
52 Venture Capital Activity Report | Q3 2011
Healthcare Continues to Grow Momentum in Q3
Washington
Healthcare continues to be the big mover in Washington, building on the strong growth
it experienced in Q2.
Share of VC in Washington by Sector - Number of Deals
Last Five Quarters
15% 11% 14% 14%
19%
6% 11% 4%
6% 7% 10% 17% 14%
6%
14% 10% 7%
13% 21%
29% 17%
6%
17%
57%
42% 46%
38%
28%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Internet Healthcare
Mobile & Telecommunications Energy & Utilities
Software (non-internet/mobile) Other
www.cbinsights.com
Share of VC in Washington by Sector - Dollars of Funding
Last Five Quarters
7%
6% 15% 16%
5% 26% 29%
20% 16%
6%
1% 5% 5% 8%
7% 12%
56% 18% 3% 17%
12%
52%
46% 45%
40%
26%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Internet Healthcare
Mobile & Telecommunications Energy & Utilities
Software (non-internet/mobile) Other
www.cbinsights.com
www.cbinsights.com
53 Venture Capital Activity Report | Q3 2011
Seed Grows, but Overall Early Stage Continues to Fall
Washington
Seed sees 5-quarter high as a percentage of overall dealflow in Q3. However, overall
early stage gives way to investment in more mature companies.
Share of VC in Washington by Series - Number of Deals
Last Five Quarters
5% 9% 4%
12% 5% 4% 11%
4% 14%
16%
27% 21%
16%
21% 27%
24% 29%
27%
42% 14%
36% 45% 27%
11%
11% 12% 14%
8% 5%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
6% 8% 5%
3% 12%
27% 16%
1% 43% 33%
47%
22%
23%
18% 38%
32%
37%
54%
27% 11%
17% 11%
6%
1% 1% 1% 1%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
www.cbinsights.com
54 Venture Capital Activity Report | Q3 2011
Q3 2011 Venture Capital
TEXAS
www.cbinsights.com
55 Venture Capital Activity Report | Q3 2011
Texas: No News is Good News as VC Remains Steady
Texas
Texas maintains venture investment levels consistent with recent quarters.
Texas VC Investment and Deal Volume Trend
Last Five Quarters
36 37
33 33 34
$357
$300 $288 $298 $304
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
$ Funding # of Deals
www.cbinsights.com
www.cbinsights.com
56 Venture Capital Activity Report | Q3 2011
Texas Remains a Melting Pot for Venture Activity in Q3
Texas
Remaining consistent with Q2, Texas remains a hub of diversity for venture investment
in Q3. Energy, Healthcare and Internet round out the top 3 spots.
Quarter Highlights
VC Deal Volume (#) in Texas by Sector, Q3 2011 34 deals | $304M
Healthcare Top Sector
18% 20%
Energy & Utilities # of Deals – Internet
Internet $ of Funding – Energy & Utils.
Mobile & Telecommunications
9% Top Five Deals
Computer Hardware & Services
HelioVolt
3% 15% Software (non-internet/mobile) Xtreme Power
9% Business Products & Services Ascension Orthopedics
TelaDoc
Automotive & Transportation
WhaleShark Media
26% All Other
Top Cities
www.cbinsights.com Austin
17 deals | $198M
Dallas
3 deals | $20M
VC Investment ($) in Texas by Sector, Q3 2011
Kyle
1 deals | $19M
Healthcare Addison
1 deals | $15M
14% 18% Energy & Utilities
Plano
Internet 2 deals | $15M
6% League City
3% Mobile & Telecommunications
1 deals | $12M
2% Computer Hardware & Services
Richardson
Software (non-internet/mobile) 1 deals | $10M
Business Products & Services Houston
21% 36% 4 deals | $5M
Automotive & Transportation
San Antonio
All Other 1 deals | $5M
McAllen
www.cbinsights.com 1 deals | $4M
www.cbinsights.com
57 Venture Capital Activity Report | Q3 2011
Energy Grabs Over One-Third of Overall Venture Funding
Texas
Energy grows its share of venture investment to 36%, while Internet retains the top
spot in terms of dealflow.
Share of VC in Texas by Sector - Number of Deals
Last Five Quarters
14%
24% 21%
27%
6% 36%
14% 9%
6% 11%
9%
9% 3%
14%
25% 12%
12%
26%
24%
21% 27%
33% 21%
14%
12%
24%
9% 14% 15%
8%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Energy & Utilities Healthcare
Internet Mobile & Telecommunications
Software (non-internet/mobile) Other
www.cbinsights.com
Share of VC in Texas by Sector - Dollars of Funding
Last Five Quarters
19% 22% 22% 17%
5% 38% 6%
3% 2%
11% 5% 12%
2% 21%
4%
7% 23%
36%
32% 11% 18%
12%
17%
5%
32% 30% 36%
23% 26%
4%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Energy & Utilities Healthcare
Internet Mobile & Telecommunications
Software (non-internet/mobile) Other
www.cbinsights.com
www.cbinsights.com
58 Venture Capital Activity Report | Q3 2011
Early Stage Investment Continues Downward Trend
Texas
Seed VC exhibits some pop in Q3, but overall early stage only takes 24% dealflow –
its lowest point in the last five quarters. Series E+ takes top spot in terms of dollars.
Share of VC in Texas by Series - Number of Deals
Last Five Quarters
6% 9% 9%
6% 15% 17%
9%
12% 15%
11%
17%
12% 4% 24%
7%
13% 27%
47% 25% 35%
21%
63%
29% 24% 15%
18%
9%
3%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
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
14% 17% 17%
19%
28%
16% 12% 17%
20%
16%
21%
35% 28%
26% 18%
31%
20%
21% 19% 26%
16% 15% 15% 18%
12%
1% 1% 1% 1% 1%
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11
Seed Series A Series B Series C Series D Series E +
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59 Venture Capital Activity Report | Q3 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.
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60 Venture Capital Activity Report | Q3 2011
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61 Venture Capital Activity Report | Q3 2011
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