The Q4 2010 MoneyTree ™results are in! This special, expanded report provides detailed results of Q4 201 0 as well as comprehensive nd- ings for full-years 2009 and 2010. More detailed results, including historical data back to 1995, can be found on the MoneyTree ™website at www .pwcmoneytree.com. PricewaterhouseCoopers National Ventur e Capital Association MoneyTree TMReport Q4 2010/Full-year 2010 Data provide by Thomson Reuters www.pwc.com
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Venture capitalists invested $21.8 billion in 3,277 deals in
2010, an increase of 19 percent in dollars and a 12 percentrise in deals over the prior year. The rise in venture invest-
ments in 2010 represents the rst time the annual invest-ment level has increased since 2007. Investments in thefourth quarter of 2010 totaled $5.0 billion in 765 deals,
a 2 percent increase in dollars but a 3 percent decrease indeals from the third quarter of 2010 when $4.9 billion
went into 789 deals.
Double-digit increases in investments in 2010 were spread
across almost every industry, including the Clean Technol-ogy and Internet-Specic sectors. Investment dollars also
increased across every stage of development category, withthe exception of a 2 percent decrease in Seed stage invest-ments. First-time nancings rose in 2010 compared to the
prior year, however, fourth quarter investing did show adecline in both rst-time dollars and deals when compared
The Software industry recaptured its status as the single
largest investment sector for the year, rising 20 percent over2009 to $4.0 billion in 2010, which was invested into 835
deals; a 21 percent rise over the prior year. Biotechnology funding increased modestly in 2010 by 3 percent in dollarsand 8 percent in deals, with $3.7 billion going into 460 deals,
dropping it to the second largest investment sector for the year in terms of dollars and deals. The Medical Device
industry fell 9 percent in dollars and was at in terms of deals in 2010, nishing the year as the fourth largest sector
with $2.3 billion going into 324 deals. The Life Sciencessector (Biotech and Medical Devices combined) accountedfor 28 percent of all venture capital dollars invested in 2010
compared to 33 percent in 2009.
The Clean Technology sector experienced a signicant
increase in 2010 with $3.7 billion invested in 267 deals.This investment level represents a 76 percent increase indollars and a 37 percent increase in deal volume from 2009 when $2.1 billion went into 195 deals. These investment
levels remained below 2008 levels of $4.0 billion into 277
deals, which was an all-time high. With ve of the top ten
deals going to Clean Technology, funding in the sectoraccounted for 17 percent of all venture capital dollars in
2010 compared to 11 percent in 2009.
Internet-specic companies also saw an increase in
investing in 2010. The $3.78 billion going into 729 dealsrepresented a 28 percent increase in dollars and 14 percent
in deals from 2009 when $2.9 billion went into 638 deals.Internet-specic is a discrete classication assigned
to a company whose business model is fundamentally dependent on the Internet, regardless of the company’sprimary industry category. These companies accounted
for 17 percent of all venture capital dollars in 2010, upfrom 16 percent in 2009.
Industry sectors experiencing some of the biggest dollarincreases in 2010 included: IT Services (44 percent); Tele-
communications (77 percent); and Media & Entertainment(18 percent).
Grand Total
0 1,000 2,000 3,000 4,000# of
Deals
0 20,000 30,000
($ in millions) All results rounded
($ in millions) All results rounded
10,000
2009
2010
$21,823
$18,276
692835
426460
234277
323324
218272
252292
126124
132136
10564
84104
5270
5770
8290
6165
3842
2926
1626
2,9273,277
$3,299$3,964
$3,566$3,686
$2,418$3,358
$2,540$2,316
$1,160$1,668
$1,202$1,422
$792
$518
$807$666
$361$529
$371$528
$388$517
$262
$448
$300$375
$136
$273
$146$177
$9$26
Software
Biotechnology
Industrial/Energy
Medical Devices and Equipment
IT Services
Media and Entertainment
Semiconductors
Telecommunications
Networking and Equipment
Consumer Products and Services
Financial Services
Computers and Peripherals
Business Products and Services
Electronics/Instrumentation
Healthcare Services
Retailing/Distribution
Other
$952
$919
Investments by industry 2009 to 2010
Denitions of the Industry categories can be found on the MoneyTree™ web site at www.pwcmoneytree.com
Software investing also increased in the fourth quarter of
2010 to the highest quarterly dollar level since Q3 2007 with $1.1 billion going into 218 deals. Software was the
number one sector for dollars invested and total number of deals in the fourth quarter and was the only industry sectorto receive more than $1 billion in the fourth quarter. For the
fourth quarter, Biotechnology funding declined 24 percentin dollars and fell 15 percent in the number of deals from
the third quarter with $685 million going into 94 rounds.
For the fourth quarter, Medical Devices saw a drop of 31percent in dollars and 15 percent in deals from Q3 2010 with $400 million going into 71 deals. In the fourth quar-
ter, venture capitalists invested $765 million into 57 Clean
Technology deals. Four of the top 10 deals in the fourthquarter fell into the Clean Technology category. Clean
Technology crosses traditional MoneyTree industriesand comprises alternative energy, pollution and recycling,power supplies and conservation.
Investments into Seed Stage companies decreased 2 percent
in terms of dollars but increased 4 percent in terms of deals with $1.7 billion going into 363 companies in 2010. Seed
Stage companies attracted 8 percent of dollars and 11 percentof deals in 2010 compared to 10 percent of dollars and 12percent of deals in 2009. Early Stage investments experienced
double-digit increases, rising 15 percent in terms of dollarsand 25 percent in terms of deals in 2010 to $5.3 billion in
1,147 deals. Early Stage companies attracted 24 percentof dollars and 35 percent of deals in 2010 compared to
25 percent of dollars and 31 percent of deals in 2009.
Expansion Stage investments increased in 2010 by 47 percent
in dollars and 21 percent in deals with $8.5 billion goinginto 1,021 deals. Expansion Stage companies attracted 39
percent of dollars and 31 percent of deals in 2010 comparedto 32 percent of dollars and 29 percent of deals in 2009. In2010, $6.3 billion was invested into 746 Later Stage deals, a
3 percent increase in dollars and a 9 percent decrease in dealsfor the year. Later Stage companies attracted 29 percent of
dollars and 23 percent of deals in 2010 compared to34 percent of dollars and 28 percent of deals in 2009.
For the fourth quarter, venture capitalists invested $243
million into 80 seed stage companies, a 14 percent decreasein dollars and a 7 percent decline in deals compared to
the third quarter of the year. Fourth quarter Early Stagedeals increased with $1.4 billion going into 285 deals, a7 percent increase in dollars and 4 percent increase in
deals from Q3.
Expansion funding rose in the fourth quarter, increasing
32 percent from the prior quarter to $2.2 billion. The num-ber of deals also increased during the quarter, improving
7 percent to 245. Fourth quarter Later Stage fundingdecreased 29 percent in terms of dollars and a 22 percentin terms of deals from the third quarter of 2010.
# ofDeals
($ in millions) All results rounded
203198155
255230245
305275285
1018680
Later Stage
Expansion
Early Stage
Startup/Seed
$1,648$1,721
$1,701
$2,162$1,635
$1,641$1,307
$1,393
0 1,000 2,000 3,000 4,000 6,0005,000# of
Deals864789765
$5,384
$5,017
($ in millions) All results rounded
Grand Total
$394$282
$243
0 500 1,000 2,000 2,500
Q4 10
Q3 10
Q4 09
$4,945
$1,219
Investments by stage of developmentQ4 2009, Q3 2010 and Q4 2010
Denitions of the Stage of Development categories can be found on MoneyTree™ web site at www.pwcmoneytree.com
First-time nancings in 2010 jumped 29 percent both in
terms of dollars and deals from the prior year, rising to$4.3 billion going into 999 companies. Industries receiving
the most dollars in rst-time nancings in 2010 wereSoftware, Biotechnology, and Industrial/Energy. Industries with the most rst-time deals in 2010 were Software,
Biotechnology, and Media/Entertainment.
Fifty-one percent of rst-time deals in 2010 were in the
Early Stage of development followed by the Seed Stageof development at 24 percent, Expansion Stage companies
at 17 percent and Later Stage companies at 8 percent.
In contrast to 2010 investment trends, the dollar level and
number of companies receiving venture capital for the rsttime decreased in the fourth quarter by 32 and 8 percent,
respectively, over the third quarter, dropping to $836million into 235 companies. The fourth quarter of 2010 was the rst time since the third quarter of 2007 in which
rst-time nancings did not exceed one billion dollars.
# ofDeals
($ in millions) All results rounded
255255235
295233249
194187183
120114
98
First
Second & Third
Fourth, Fifth, & Sixth
Seventh & Beyond
$1,112$1,224
0 1,000 2,000 3,000 4,000 6,0005,000# of
Deals864789765
$5,384
($ in millions) All results rounded
Grand Total
Q4 10
Q3 10
Q4 09
0 500 1,000 1,500 2,000
$4,945$5,017
$836
$1,640$1,513
$1,745
$1,614
$1,619$1,304
$1,019$904
$818
Investments by sequence of nancing Q4 2009, Q3 2010 and Q4 2010
Half of the top ten regions to attract venture-backed
funding in 2010 recorded an increase in funding over theprior year. The Midwest reported the greatest jump in 2010
investment with a 77 percent increase in funding followedby Colorado with a 51 percent increase.
Silicon Valley was the top region for the year attracting
40 percent of total US venture capital dollars and 30percent of total US deals. New England was a distant second
at 11 percent of total US funding and 12 percent of totaldeals. Taken together, the top three regions — Silicon Valley, New England, and New York Metro — accounted
for 61 percent of venture-backed funding and 53 percentof deals reported in 2010.
In the fourth quarter, seven of the top ten regions saw an
increase in funding compared to third quarter 2010. Half of the top ten regions reported an increase in funding com-
pared to investment the same time last year. Funding goingto Silicon Valley was up nine percent from the third quarterbut down ve percent compared to the fourth quarter 2009.
New England deals were up two percent compared to third
quarter 2010 but down 23 percent from the fourth quarter2009. Silicon Valley, New England and New York Metro
were the top regions for the quarter and accounted for61 percent of dollars and 53 percent of the deals reportedin the fourth quarter 2010.
281217231
108101
88
688483
695962
454048
251924
323026
325133
343733
483323
334134
303330
211114
95
18
21168
454
12-
13-
864789765
Silicon Valley
New England
NY Metro
Midwest
LA/Orange County
Colorado
San Diego
Southeast
Northwest
DC/Metroplex
Texas
Philadelphia Metro
North Central
South Central
SouthWest
Upstate NY
AK/HI/PR
Sacramento/N.Cal
Grand total
0 500 1,000 1,500 2,000 2,500 3,000# of
Deals
0 3,000 6,000
($ in millions) All results rounded
($ in millions) All results rounded
5,0004,0001,000 2,000
$2,075$ 1,833
$2,001
Unknown region totals not included
$692$526$536
$486$341
$513
$213$258
$378$284
$229$305
$168$88
$254
$344$223
$193$166
$265$191$185$194
$160
$209$259
$143
$215
$138$152$148
$85$130
$99$46
$2$5
$34
$53$72
$31
$6$4$2
$0$50
$3$50
$5,384
$ 5,017
$389
$4,945
Q4 09
Q3 10
Q4 10
Investments by regionQ4 2009, Q3 2010 and Q4 2010
Denitions of the Region categories can be found on MoneyTree™ web site at www.pwcmoneytree.com
California was the top state to receive funding in 2010,
with 50 percent of total US venture-backed investment forthe third consecutive year. Massachusetts was in second
place, capturing 11 percent of total US dollars. New York and Texas attracted 6 percent and 4 percent of total dollars,respectively. All but one of the top ten states reported an
increase in 2010 funding when compared to full year 2009.
The most active US venture rms closed 21 or more deals in
2010. Kleiner Perkins Caueld & Byers topped the list of mostactive venture rms, completing a total of 76 deals in 2010.
First Round Capital and New Enterprise Associates, roundout the top three rms. For the year, the most active rmsinvested in 25 percent of total deals completed in 2010.
Most active venture investorsFull-year 2010
Firm City # of deals
Kleiner Perkins Caueld & Byers Menlo Park, CA 76
First Round CapitalWest Conshohocken,PA
69
New Enterprise Associates, Inc. Menlo Park, CA 67
Draper Fisher Jurvetson Menlo Park, CA 58
North Bridge Venture Partners San Mateo, CA 55
Polaris Venture Partners Waltham, MA 53
Sequoia Capital Menlo Park, CA 47
Venrock Associates Palo Alto, CA 46
Canaan Partners Westport, CT 42
Domain Associates LLC Princeton, NJ 39
Accel Partners Palo Alto, CA 38
Menlo Ventures Menlo Park, CA 38
U.S. Venture Partners Menlo Park, CA 38
Austin Ventures, L.P. Austin, Texas 37Intel Capital Santa Clara, CA 36
Rho Capital Partners, Inc. New York, NY 36
Foundation Capital Menlo Park, CA 35
Khosla Ventures Menlo Park, CA 35
Bessemer Venture Partners Larchmont, NY 34
Redpoint Ventures Menlo Park, CA 34
Ben Franklin Technology Partners Southeastern PA
Philadelphia, PA 33
True Ventures Palo Alto, CA 33
Benchmark Capital Menlo Park, CA 32
Kansas Technology EnterpriseCorporation
Topeka, KS 32
ARCH Venture Partners Chicago, IL 30
Flagship Ventures Cambridge, MA 30
Highland Capital Partners LLC Lexington, MA 30
InterWest Partners Menlo Park, CA 30
Oak Investment Partners Westport, CT 30
Firm City # of deals
Norwest Venture Partners Palo Alto, CA 29
Sigma Partners Menlo Park, CA 29
Battery Ventures, L.P. Waltham, MA 27
Connecticut Innovations, Inc. Rocky Hill, CT 27
Lightspeed Venture Partners Menlo Park, CA 26
OVP Venture Partners Kirkland, WA 26
Alloy Ventures Palo Alto, CA 25
Frazier Healthcare andTechnology Ventures
Seattle, WA 25
Innovation Works, Inc. Pittsburgh, PA 25
Adams Street Partners LLC Chicago, IL 24
Advanced Technology Ventures Waltham, MA 24
Charles River Ventures Waltham, MA 24
Alta Partners San Francisco, CA 23Greycroft Partners New York, NY 23
The tally of venture-backed IPOs completed in the fourth
quarter of 2010 was more than double the number reportedin the third quarter. The year also ended on a high note
with 72 exits valued at $7,017.5 million. In contrast, there were 12 venture-backed IPOs 2009 and only 6 completedin 2008.
Venture-backed initial public offerings (IPO)2008 to 2010
QuarterNumber of IPOs
Q4(0)
Q3(1)
Q2(0)
Q1(5)
Q4(4)
Q3(3)
Q2(5)
Q1(0)
Q4(32)
Q3(14)
Q2(17)
Q1(9)
$ in millions
`08 `09 `10
0
1,000
2,000
3,000
4,000
$283 $188
$572
$0 $0
$1,275
$1,249
$3.557
$936
$349
$721
$0
Source: Thomson Reuters & National Venture Capital AssociationIncludes all companies with at least one US VC investor that trade on US exchanges, regardless of domicile.Data current as of January 03, 2011