PricewaterhouseCoopers/ National PricewaterhouseCoopers/ National Venture Capital Association Venture Capital Association MoneyTree™ Report MoneyTree™ Report based on data from Thomson based on data from Thomson Financial Financial Shaking the MoneyTree ™ ™ Raleigh, NC Raleigh, NC May 2007 May 2007 Q1 2007 Update May 2007
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PricewaterhouseCoopers/ National Venture PricewaterhouseCoopers/ National Venture Capital Association MoneyTree™ ReportCapital Association MoneyTree™ Reportbased on data from Thomson Financialbased on data from Thomson Financial
Shaking the MoneyTree™™
Raleigh, NCRaleigh, NCMay 2007May 2007
Q1 2007 UpdateMay 2007
Slide 2PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Today’s program
The MoneyTree Report – Q1 2007 Analysis• presented by Laura Hoke, PricewaterhouseCoopers LLP
Venture Capital Panel• Michael Elliott, Noro-Moseley• Steve Nelson, Wakefield Group
Question and Answer Session
1)
2)
3)
Slide 3PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Speaker Bios
Slide 4PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Laura Hoke
Laura is a senior manager in the Raleigh office of PricewaterhouseCoopers ("PwC"), where she
is responsible for providing a range of audit, business advisory and consulting services. She
has extensive experience in the software industry, as well as other technology-backed
industries including biotech, pharmaceutical and professional services. In addition to her audit
and business advisory services, Laura has significant SEC experience, including several initial
public offerings. She has been involved in numerous Sarbanes Oxley projects and has led the
404 implementation efforts at several organizations. Laura rejoined PwC’s Raleigh office after
serving as the Corporate Controller for a global software company, where she was responsible
for the domestic and international accounting functions, as well as the development,
implementation and maintenance of the internal control structure. Laura has extensive
experience in mergers and acquisitions and was responsible for the integration of acquisitions
for a global distribution and manufacturing company.
Laura’s primary client is Lenovo Group, Limited although she participates on several other
technology-backed engagements throughout the Carolinas. Laura graduated with a B.S. from
Virginia Tech, is a member of the AICPA and the North Carolina Association of Certified Public
Accountants. She also serves on the Board of Directors of Artspace, a nonprofit visual arts
center in downtown Raleigh.
Slide 5PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Mike Elliott
Mike Elliott joined NMP in early 2005 with 21 years of successful venture capital investment experience. Mike spent the last eight years as a Managing Director of The Wakefield Group, a private venture firm based in Charlotte, North Carolina with an investment focus similar to that of NMP. Mike invested primarily in technology and business services companies, at early and growth stages of development, and will continue that focus in his deployment of Fund VI. Several of The Wakefield Group’s investments were syndicated co-investments with several of the Prior Funds.
Prior to his service at The Wakefield Group, Mike was a Managing Director of NationsBank Capital (now Bank of America Capital Investors), Bank of America’s private equity investment arm, where he managed large financings of later-stage growth companies. He began his venture investment career as a founding partner of NCNB Venture Co., L.P., the venture investment arm of NCNB, the predecessor of Bank of America. During his venture career, Mike has been an active board member and sponsor of several highly successful ventures, including Affiliated Managers (NYSE: AMG), Redgate Communications (sold to AOL), Medic Computer Systems (sold to Misys), OpenSite Technologies (sold to Siebel Systems), SciQuest (Nasdaq: SQST) and Serologicals (Nasdaq: SERO).
During his nine years as a partner at NCNB Ventures starting in 1985, Mike returned 3.4x capital, generating a 29% gross IRR for investments he sponsored. During his three years as a Managing Director at NationsBank Capital, he led growth company financings generating a 25% gross IRR and returning 2.1x capital. While at The Wakefield Group, he sponsored transactions generating a 37% gross IRR, returning 1.5x capital. Mike’s experience and known culture fit with the NMP team make him an ideal addition to the Firm and the Fund VI team.
Mike is extensively involved in North Carolina’s entrepreneurial community, having served in many leadership roles, including the Executive Committee of the NASBIC Board of Governors and as a board member of the Council for Entrepreneurial Development in Research Triangle Park. Mike received a BS in mathematics and an MBA from the University of North Carolina, where he was both a Morehead Scholar and Maurice Lee Fellow.
Slide 6PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Steve Nelson
Steve Nelson joined Wakefield Group in October 1999 as Managing Director and Partner. He established the venture capital firm’s Research Triangle Park, NC office.
Steve joined Wakefield after 19 years of executive and general management experience in technology, software and Internet-based businesses. During the last three years of his career before starting in venture capital, Steve was at Quokka Sports, a digital media company, in several executive capacities. Quokka raised over $140m in capital and successfully completed an IPO in July, 1999. Steve served as chief executive of a joint venture company between NBC Sports and Quokka Sports, NBC/Quokka Ventures, LLC.
Prior to Quokka, Steve served as a Vice President with Informix Software, based in Menlo Park, CA. His first business experience was 14-plus years at IBM, ultimately as Vice President and General Manager in San Francisco where he had executive and P&L responsibility for all customers in the eleven western states, all IBM products and services, 800 employees, $2.2B in revenues and several hundred million dollars in profit.
Steve is a member of the board of directors and the executive committee at Motricity. He is also Wakefield’s board representative for Liquidia Technologies where he is also interim CEO, Integrian, Constella Group, Near-Time, rPath, APEX Analytix, and BlueCross BlueShield of North Carolina. He was a past Chairman of North Carolina’s Council for Entrepreneurial Development (CED), and is a member of the Investment Advisory Committee for the State Treasurer of North Carolina and helps oversee their $74B portfolio.
Steve received his B.S. degree in Business from Wake Forest University.
Slide 7PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
About The Report
• PricewaterhouseCoopers and the National Venture Capital Association produce the MoneyTree Report™ based on data from Thomson Financial
• ‘Core’ measure of equity investments in venture-backed companies in the United States
• Companies have received at least one round of financing involving a professional VC firm or equivalent
• Captures: tranches, not term sheets, foreign VCs, qualified private placement
Slide 30PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Q1 2007 – Most Active Venture Investors
Venture Capital Firm LocationTotal Deals
Alta Partners San Francisco, California 18
New Enterprise Associates Baltimore, Maryland 18
Draper Fisher Jurvetson Menlo Park, California 17
Canaan Partners Westport, Connecticut 16
Intel Capital Santa Clara, California 15
Menlo Ventures Menlo Park, California 15
Sequoia Capital Menlo Park, California 15
ARCH Venture Partners Chicago, Illinois 14
Venrock Associates New York, New York 14
Slide 31PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Thomson FinancialU.S. Private Equity Performance Index (PEPI)
Fund Type 1 Year 3 Year 5 Year 10 Year 20 Year
Early/Seed VC 9.9 6.5 -3.0 36.4 20.5
Balanced VC 20.5 11.7 4.1 17.6 14.6
Later Stage VC 25.2 9.4 3.7 9.0 14.0
All Venture 16.4 9.1 1.0 20.3 16.6
All Buyouts 24.5 14.6 10.4 8.5 12.9
Mezzanine 12.6 5.0 4.1 6.1 8.5
All Private Equity 23.3 12.7 7.5 11.0 13.9
NASDAQ 4.7 6.2 4.3 6.4 10.1
S&P 500 10.8 8.2 4.2 6.6 9.2
(Investment Horizon Performance as of 12/31/2006)
Source: Thomson Financial/National Venture Capital Association *Data as of 4/13/2007--The Private Equity Performance Index (PEPI) is based on the latest quarterly statistics from the Thomson Financial Private Equity Performance Database analyzing the cashflows and returns for over 1860 US venture capital and private equity partnerships with a capitalization of $679 billion. Sources are financial documents and schedules from Limited Partners investors and General Partners. All returns are calculated by Thomson Financial from the underlying financial cashflows. Returns are net to investors after management fees and carried interest.
Slide 32PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Analysis of Venture-Backed IPO and M&A Activity*
Date Number of IPOs**
Total Venture-Backed Offering Size ($M)
Average Venture-Backed Offering Size ($M)
Number of Venture-backed M&A deals
Average M&A deal size***
2003 29 2,022.7 69.8 291 62.8
2004 93 11,014.9 118.4 339 83.0
2005 56 4,461.0 79.7 347 95.8
2006 Q1 10 540.8 54.1 104 112.2
2006 Q2 19 2,011.0 105.8 92 101.3
2006 Q3 8 934.2 116.8 87 95.6
2006 Q4 20 1,631.1 81.6 57 165.3
2006 57 5,117.1 89.8 340 113.3
2007 Q1 17 2,091.9 123.1 62 161.2
2007 17 2,091.9 123.1 62 161.2
* Q1 2007 M&A data, current as of April 2, 2007, is preliminary and subject to change** Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile***Only accounts for deals with disclosed valuesSource: Thomson Financial/ National Venture Capital Association
Slide 33PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Venture Capital Fundraising*
Year First Time Funds
Follow-On Funds
Total Number of Funds
VC Raised ($M)
2002 57 115 172 3,767.4
2003 50 97 147 10,622.3
2004 56 149 205 18,566.0
2005 55 163 218 27,957.3
2006 44 168 212 30,260.4
2007 YTD 13 43 56 4,939.8
Quarter
Q1 ‘06 17 55 72 6,640.1
Q2 ‘06 13 59 72 14,050.9
Q3 ‘06 13 52 65 5,426.0
Q4 ‘06 14 42 56 4,143.4
Q1 ‘07 13 43 56 4,939.8
Source: Thomson Financial/National Venture Capital Association
*These figures take into account the subtractive effect of downsized funds Date current as of 4/16/07
Slide 34PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
North Carolina Picture
Historical Trends
Slide 35PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
MoneyTree Total North Carolina InvestmentsMoneyTree Total North Carolina Investments2000 – Q1 20072000 – Q1 2007
Nextreme Thermal Solutions, Inc. Electronics/Instrumentation $
5,292,000
Phase Bioscience, Inc. Biotechnology $
1,250,100
Regado Biosciences, Inc. Biotechnology $
23,000,200
rPath, Inc .Software $ 1,749,900
Serenex, Inc.Biotechnology $ 13,999,800
StrikeIron, Inc.IT Services $ 5,000,000
Tranzyme Pharma, Inc. Biotechnology $
11,000,000
Unit Dose Solutions, Inc. Biotechnology $
2,500,000
XDS, Inc. IT Services IT Services $
2,274,000
$
224,816,300
North Carolina Companies Funded in Q1 2007North Carolina Companies Funded in Q1 2007
Company Name AmountIndustry
Slide 43PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
VC Funds Active in North CarolinaBancAmerica Capital Investors
BB&T Capital Partners
CapitalSouth Partners LLC
Carolina Financial Group
Carousel Capital Partners
Centura SBIC Inc.
Core Capital
Fairview Capital LLC
First Union Ventures Group
Franklin Street Partners
Frontier Capital LLC
Gardiner Capital
Glenwood Venture Partners
Golden Pine Ventures
Grotech Capital Group
Halifax Group
Hatteras BioCapital
H.I.G. Ventures
Intersouth Partners
Kodiak Venture Partners
Lovett Miller & Company, Inc.
Massey Burch
NC IDEA
New Enterprise Associates
Noro-Moseley Partners
Novak Biddle Venture Partners
Pappas Ventures
Piedmont Angel Network
Remington Capital Partners
Research Triangle Ventures
River Cities Capital Funds
SJF Ventures
Southern Capitol Ventures
Southeast Interactive Technology Funds
The Atlantis Group
The North Carolina Enterprise Fund
The Aurora Funds
The Trelys Funds
TriState Investment Group
Wachovia Capital Partners
Wakefield Group
Venture First Associates
Slide 44PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
Entrepreneurs and Venture Capital On-Line Resource ListEntrepreneurs and Venture Capital On-Line Resource Listwww.pwc.com - The PricewaterhouseCoopers Global website.
www.pwcmoneytree.com, www.nvca.org, www.ventureeconomics.com - The PricewaterhouseCoopers/National Venture Capital Association MoneyTree TM Report based on data from Thomson Financial is a quarterly study of equity investments made by the venture capital community in private companies in the U.S. The survey identifies regional and national trends, entrepreneurial developments and promising industry segments.
www.pwcnextwave.com - PricewaterhouseCoopers’ thought leadership articles for the world of private equity.
www.cfodirect.com - CFOdirect Network – PricewaterhouseCoopers’ online accounting, finance and business resource for senior financial executives.
www.pwcV2R.com - The Vision to Reality Entrepreneur Resource Center site offers proven business plan templates, financial models, technology-specific ratios, benchmarks and more.
www.pwcvc.com - The VC BestPractices site serves to provide an aggregate, comparative view of key issues and activities impacting the venture capital community, and to identify best practices.
www.barometersurveys.com - PricewaterhouseCoopers’ Trendsetter and Technology Barometers site – result & analysis of the quarterly survey of fast-growth and large company CEO’s.
www.cednc.org - The Council for Entrepreneurial Development
www.nc-tech.org - North Carolina Technologies Association
Slide 45PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial
May 2007
For more information, contact:
Jeff Barberor
Peter Coode
Carolinas Technology Industry GroupPhone 919 755-3000