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Soup to Nuts Presentation March 3, 2001 <ul><li>Presented by: </li></ul><ul><li>John Gabbert </li></ul><ul><li>Director of...
VentureOne Research <ul><li>VentureOne tracks companies from their initial round of venture financing until they achieve l...
Three Key Elements for a Robust Venture Industry <ul><li>Fundraising </li></ul><ul><li>Investment </li></ul><ul><li>Liquid...
Fundraising
Contributions to Venture Capital ($B) VC Fundraising Dollars Double  From 1999
Contributions to Venture Capital ($B) Fundraising Continues at Historical  Highs Through 2000
Median VC Fund Size ($M)* Median VC Fund Size Stable in 2000 * Funds greater than $20M
Majority of VC $ Are Now  in Large Funds VC Funds Under Management by Size ($M)
Fundraising Summary <ul><li>New commitments to venture capital are at record levels. </li></ul><ul><li>Over half of VC dol...
Investment
2000 Investment Far Ahead of 1999’s Record Deals and Amount Invested
Investment Declines  Throughout 2000 Deals and Amount Raised
Internet Investment in 2000 Exceeds 1999 Total Deals and Amount Invested in Internet Companies
Lower Internet Investment Contributes to Overall Decline Deals and Amount Raised by Internet Companies
Internet Steadily Declines in 2000 as Percentage of Overall Investment  Percentage of Investment Dedicated to Internet
Median Amount Invested Per Round ($M) More Money Placed in the Hands  of Entrepreneurs
Median Amount Raised  Leveling Off Across Round Classes Median Amount Raised by Round Class ($M)
Shipping-Stage Companies Raise Bulk of Venture Investment Total Amount Raised by Development Stage ($M)
Median Premoney Valuation by Year ($M) Valuations Rise Substantially in 2000
Median Premoney Valuation by Quarter ($M) Despite Investor Caution, Valuations Remain High Through 4Q
Predominance of Internet Companies Affects Overall Valuations Median Premoney Valuation ($M)
Median Pre-Money Valuations  Remain Relatively Stable Median Pre-Money Valuations ($M)
Valuations Differ Markedly  by Industry Median Premoney Valuation by Industry ($M)
Products & Services Investment Continues Decline in 4Q’00 Venture Commitments by Industry Sector, Quarterly
Infrastructure Rises as E-Commerce Falls in 2000 Percentage of Internet Investment by Dimension
Infrastructure, Software Hold Steady as Other Internet Sectors Shrink Quarterly Internet Investment by Dimension ($M)
Early-Stage Investment Decreases  in Late 2000 Investment in Early vs. Later-Stage Companies
Percentage of Venture Deals Involving Corporations  Corporate Involvement in Venture Deals Accelerates
Despite Year-End Deceleration, 2000 is a Banner Year  Venture Commitments by Industry Sector ($B)
Regional Investment
Regional Venture Capital Investment in the U.S. *“Hot Spots” include Austin, Boston, New York, Potomac, Research Triangle,...
VC Investment in the Bay Area Number of Deals and Amount Raised
Bay Area Investment Summary <ul><li>Investment in the Bay Area fell 26% during the fourth quarter. Deal flow fell 12%. </l...
Financing Summary <ul><li>Despite quarterly declines, VC investment in 2000 nearly doubled 1999’s record. </li></ul><ul><l...
Liquidity
Venture-Backed Liquidity Shifts Toward M&As M & As vs. IPOs
M&As Decline in the Fourth Quarter Deals and Amount Paid in M & As
Despite a 4Q Decline,  M&A Dollars  More Than Double in 2000 Deals and Amount Paid in M & As
IPO Volume Falls Sharply in 4Q’00 Deals and Amount Raised Through IPOs
Despite 4Q’00 Shortfalls, IPO Activity for 2000 Is Strong  Deals and Amount Raised Through IPOs
Healthcare Continues to Increase as Percentage of Overall IPOs Percentage of IPOs by Industry
Internet IPOs Lose Ground  as Percentage of Total in 2000 IPOs, Internet vs. Non-Internet
Median Amount Raised at IPO ($M) Median Amount Raised at IPO Reaches Record High in 2000
Median Venture-Backed Pre-IPO Valuation ($M) Pre-IPO Valuations Continue to  Climb in 2000
Median Venture-Backed Pre-IPO Valuations ($M) Pre-IPO Valuations Remain Stable in 4Q’00
Younger Companies IPO Since Mid-90s Time (Years) From Initial VC Funding to IPO
Liquidity Summary <ul><li>Both the IPO and M & A markets for venture-backed companies saw substantial decreases in 4Q’00. ...
Conclusions <ul><li>Despite caution, continued liquidity and high valuations will drive VC returns and should continue to ...
VentureOne Products & Services <ul><li>Online Databases </li></ul><ul><li>VentureSource Online database of venture capital...
VentureOne Products & Services <ul><li>Venture Capital Conferences </li></ul><ul><li>The Summit  (Spring, San Francisco) B...
VentureOne Products & Services <ul><li>Industry Publications </li></ul><ul><li>VentureEdge  (quarterly) </li></ul><ul><li>...
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Current Trends in the Venture Industry - Fundraising

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Transcript of "Current Trends in the Venture Industry - Fundraising"

  1. 1. Soup to Nuts Presentation March 3, 2001 <ul><li>Presented by: </li></ul><ul><li>John Gabbert </li></ul><ul><li>Director of Research </li></ul><ul><li>VentureOne </li></ul>
  2. 2. VentureOne Research <ul><li>VentureOne tracks companies from their initial round of venture financing until they achieve liquidity, become profitable with no plans for future financing, or go out of business. </li></ul>
  3. 3. Three Key Elements for a Robust Venture Industry <ul><li>Fundraising </li></ul><ul><li>Investment </li></ul><ul><li>Liquidity </li></ul>
  4. 4. Fundraising
  5. 5. Contributions to Venture Capital ($B) VC Fundraising Dollars Double From 1999
  6. 6. Contributions to Venture Capital ($B) Fundraising Continues at Historical Highs Through 2000
  7. 7. Median VC Fund Size ($M)* Median VC Fund Size Stable in 2000 * Funds greater than $20M
  8. 8. Majority of VC $ Are Now in Large Funds VC Funds Under Management by Size ($M)
  9. 9. Fundraising Summary <ul><li>New commitments to venture capital are at record levels. </li></ul><ul><li>Over half of VC dollars are in funds greater than $500 million. </li></ul><ul><li>Capital under management per VC partnership continues to rise. </li></ul><ul><li>Greatest amount of VC money in history available to invest in entrepreneurship. </li></ul>
  10. 10. Investment
  11. 11. 2000 Investment Far Ahead of 1999’s Record Deals and Amount Invested
  12. 12. Investment Declines Throughout 2000 Deals and Amount Raised
  13. 13. Internet Investment in 2000 Exceeds 1999 Total Deals and Amount Invested in Internet Companies
  14. 14. Lower Internet Investment Contributes to Overall Decline Deals and Amount Raised by Internet Companies
  15. 15. Internet Steadily Declines in 2000 as Percentage of Overall Investment Percentage of Investment Dedicated to Internet
  16. 16. Median Amount Invested Per Round ($M) More Money Placed in the Hands of Entrepreneurs
  17. 17. Median Amount Raised Leveling Off Across Round Classes Median Amount Raised by Round Class ($M)
  18. 18. Shipping-Stage Companies Raise Bulk of Venture Investment Total Amount Raised by Development Stage ($M)
  19. 19. Median Premoney Valuation by Year ($M) Valuations Rise Substantially in 2000
  20. 20. Median Premoney Valuation by Quarter ($M) Despite Investor Caution, Valuations Remain High Through 4Q
  21. 21. Predominance of Internet Companies Affects Overall Valuations Median Premoney Valuation ($M)
  22. 22. Median Pre-Money Valuations Remain Relatively Stable Median Pre-Money Valuations ($M)
  23. 23. Valuations Differ Markedly by Industry Median Premoney Valuation by Industry ($M)
  24. 24. Products & Services Investment Continues Decline in 4Q’00 Venture Commitments by Industry Sector, Quarterly
  25. 25. Infrastructure Rises as E-Commerce Falls in 2000 Percentage of Internet Investment by Dimension
  26. 26. Infrastructure, Software Hold Steady as Other Internet Sectors Shrink Quarterly Internet Investment by Dimension ($M)
  27. 27. Early-Stage Investment Decreases in Late 2000 Investment in Early vs. Later-Stage Companies
  28. 28. Percentage of Venture Deals Involving Corporations Corporate Involvement in Venture Deals Accelerates
  29. 29. Despite Year-End Deceleration, 2000 is a Banner Year Venture Commitments by Industry Sector ($B)
  30. 30. Regional Investment
  31. 31. Regional Venture Capital Investment in the U.S. *“Hot Spots” include Austin, Boston, New York, Potomac, Research Triangle, and Southern California Venture Capital Concentrated in Bay Area and Key Regional Hot Spots*
  32. 32. VC Investment in the Bay Area Number of Deals and Amount Raised
  33. 33. Bay Area Investment Summary <ul><li>Investment in the Bay Area fell 26% during the fourth quarter. Deal flow fell 12%. </li></ul><ul><li>In 2000 as a whole, Bay Area investment is ahead of 1999’s total by 68%. Investment was at its peak during 3Q’00. </li></ul><ul><li>Due to a sharp decline in consumer and business services, investment in communications companies now leads, followed by software. </li></ul>
  34. 34. Financing Summary <ul><li>Despite quarterly declines, VC investment in 2000 nearly doubled 1999’s record. </li></ul><ul><li>Internet investment declined from its record high in 1Q’00, but still comprised 83% of overall investment in 2000. </li></ul><ul><li>The drop off in consumer and business services investment drove the decline; investment in Internet infrastructure and software/database companies remains strong. </li></ul><ul><li>IT receives the most VC investment of any industry. Products & Services absorbed the brunt of the Internet decline, while healthcare investment is at a record high. </li></ul><ul><li>The Bay Area still sees bulk of investment, but capital is also concentrated in select “hot spots.” </li></ul>
  35. 35. Liquidity
  36. 36. Venture-Backed Liquidity Shifts Toward M&As M & As vs. IPOs
  37. 37. M&As Decline in the Fourth Quarter Deals and Amount Paid in M & As
  38. 38. Despite a 4Q Decline, M&A Dollars More Than Double in 2000 Deals and Amount Paid in M & As
  39. 39. IPO Volume Falls Sharply in 4Q’00 Deals and Amount Raised Through IPOs
  40. 40. Despite 4Q’00 Shortfalls, IPO Activity for 2000 Is Strong Deals and Amount Raised Through IPOs
  41. 41. Healthcare Continues to Increase as Percentage of Overall IPOs Percentage of IPOs by Industry
  42. 42. Internet IPOs Lose Ground as Percentage of Total in 2000 IPOs, Internet vs. Non-Internet
  43. 43. Median Amount Raised at IPO ($M) Median Amount Raised at IPO Reaches Record High in 2000
  44. 44. Median Venture-Backed Pre-IPO Valuation ($M) Pre-IPO Valuations Continue to Climb in 2000
  45. 45. Median Venture-Backed Pre-IPO Valuations ($M) Pre-IPO Valuations Remain Stable in 4Q’00
  46. 46. Younger Companies IPO Since Mid-90s Time (Years) From Initial VC Funding to IPO
  47. 47. Liquidity Summary <ul><li>Both the IPO and M & A markets for venture-backed companies saw substantial decreases in 4Q’00. </li></ul><ul><li>IPO volume in 4Q was at its lowest since 4Q’98. Strong activity earlier in 2000, however, kept annual totals high. </li></ul><ul><li>Due to strong interest in biopharmaceuticals, healthcare IPOs raised a record amount in 2000 and saw the largest number of offerings since 1996. </li></ul><ul><li>Despite the 4Q’00 decline, 2000 was a record year for M & As. Much of the increase is due to the high number of multi-billion-dollar transactions that took place during the year. </li></ul>
  48. 48. Conclusions <ul><li>Despite caution, continued liquidity and high valuations will drive VC returns and should continue to fuel an overall healthy VC/entrepreneurship climate in the United States. Overall is not all . </li></ul><ul><li>Investors in the US, Europe, and Israel are increasingly pursuing opportunities outside their own borders--opportunities which include co-partnering as well as independent investment. </li></ul><ul><li>For more information or details, please contact corpcomm@ventureone.com. </li></ul>
  49. 49. VentureOne Products & Services <ul><li>Online Databases </li></ul><ul><li>VentureSource Online database of venture capital information with more than 11,000 venture-backed companies, nearly 4,000 investors—including more than 1,100 traditional and corporate venture firms with over 2,200 funds—and nearly 31,000 financing transactions and 80,000 key executives. </li></ul><ul><li>CompensationPro Online salary, bonus, and equity consultant with compensation information from over 800 venture-backed companies. </li></ul>
  50. 50. VentureOne Products & Services <ul><li>Venture Capital Conferences </li></ul><ul><li>The Summit (Spring, San Francisco) Best of breed in venture capital </li></ul><ul><li>The Exchange (Summer, Boston) Outstanding East Coast companies </li></ul><ul><li>The Premiere (Fall, Washington DC & San Jose) The nation’s best seed-stage companies </li></ul><ul><li>Venture Capital Europe (Spring, Paris & Winter, London) Strategies for Europe’s private equity community </li></ul>
  51. 51. VentureOne Products & Services <ul><li>Industry Publications </li></ul><ul><li>VentureEdge (quarterly) </li></ul><ul><li>VentureMail news (weekly) </li></ul><ul><li>Venture Capital Industry Report (annual) </li></ul><ul><li>Venture Capital Sourcebook (annual) </li></ul><ul><li>Executive Compensation at Privately Held Startup Companies (semi-annual) </li></ul><ul><li>Customized Research </li></ul><ul><li>Comparable Valuation Reports To help determine a company’s relative value </li></ul><ul><li>Custom report services To address specific business challenges </li></ul>
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