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John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
John Gabbert's Presentation
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John Gabbert's Presentation

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Transcript

  • 1. The State of Venture Capital
    • March 2, 2002
    • John Gabbert
    • Sr. Director, Worldwide Research
    • VentureOne Corporation
  • 2. Three Key Elements for a Robust Venture Industry
    • Fundraising
    • Investment
    • Liquidity
  • 3. Fundraising
  • 4. Venture Capital Fundraising Healthy in 2001 Commitments to Venture Capital Funds Funds Raised ($B) Source: VentureOne
  • 5. But Momentum is Slowing Commitments to Venture Capital Funds Funds Raised ($B) Source: VentureOne
  • 6. Fundraising Far Outpaces Investment in 2001 Fundraising vs. Amount Invested Amount Invested ($B) Source: VentureOne
  • 7. Fundraising Summary
    • Commitments to venture capital were flat in 4Q01; however, 2001 fundraising was still well above the norm.
    • Fundraising is becoming more difficult, especially for newer or unproven funds.
    • Over half of VC dollars are now in funds greater than $500 M.
    • Greatest amount of VC money in history available to invest in entrepreneurship.
  • 8. Investment: Overall
  • 9. 2001: A Sharp Contrast to 2000’s Boom Equity into Venture-Backed Companies Amount Invested ($B) Number of Deals Source: VentureOne
  • 10. Investment Levels Off at Year’s End Equity into Venture-Backed Companies Amount Invested ($B) Number of Deals Source: VentureOne
  • 11. Median Round Size Gets a Boost in 4Q’01 Median Amount Invested Per Round Median Amount Invested ($M) Source: VentureOne
  • 12. Positively Affecting Later-Stage Rounds Median Amount Invested by Round Class Median Amount Invested ($M) Source: VentureOne
  • 13. Investment Shifts to Second & Later Rounds Deal Flow by Round Class % of Deals Source: VentureOne
  • 14. IT Dominates, Healthcare Recaptures Investor Interest Equity Investment by Industry Sector % of Investment Source: VentureOne
  • 15. IT Investment Still Falling Equity Investment in Information Technology Companies Amount Invested ($B) Number of Deals Source: VentureOne
  • 16. Communications, Software Are Cornerstones of IT IT Investment by Sector % of Internet Investment Source: VentureOne
  • 17. Investment: Valuations
  • 18. 2001 Valuations Fall Below 1999 Levels Median Premoney Valuation by Year Median Premoney Valuation ($M) Source: VentureOne
  • 19. Valuations Recover Somewhat in 4Q’01 Median Premoney Valuation Median Premoney Valuation ($M) Source: VentureOne
  • 20. Later-Round Valuations Boost Overall Numbers Median Premoney Valuations by Round Class Median Premoney Valuation ($M) Source: VentureOne
  • 21. Healthcare Valuations Up Significantly Median Premoney Valuations by Industry Median Premoney Valuation ($M) Source: VentureOne
  • 22. Investment: Regions
  • 23. Texas Edges Out Boston for #3 Spot 2001 Regional Investment in the US Source: VentureOne
  • 24. Bay Area Investment Stabilizes Investment in Bay Area Venture-Backed Companies Amount Invested ($B) Source: VentureOne
  • 25. Equity Financing Summary
    • Equity financing into venture-backed companies leveled off in 4Q’01.
    • Overall equity investment in 2001 was still the third highest amount on record.
    • Valuations and median round sizes recovered slightly at year’s end.
    • Early-stage venture financing has fallen more rapidly than later-stage.
    • The time between financing rounds is expanding.
  • 26. Liquidity
  • 27. M&As Continue to Slip Transactions and Amount Paid in M & As Amount Paid ($B) Source: VentureOne Number of Transactions
  • 28. IPO Liquidity Up Marginally in 4Q01 … Deals and Amount Raised Through IPOs Amount Raised ($B) Venture-Backed IPOs Source: VentureOne
  • 29. Liquidity Summary
    • The IPO and M&A markets for venture-backed companies continued their dramatic declines from the record levels of 1999 and early 2000.
    • IPO volume in 2001 was at its lowest in years.
    • The amount paid in M&A transactions declined throughout 2001, falling to the lowest level since 1995.
    • IPO companies in 2001 were more mature, but the time from initial funding to M&A is still falling.
  • 30. Conclusions & Implications
    • The bad news:
      • Liquidity is extremely difficult
      • VCs are investing much more slowly and cautiously
      • Valuations are down across the board
      • Many VC-funded companies will fail to raise more $
    • The good news:
      • Liquidity windows open and close
      • VCs do have money to invest
      • Expectations are much more realistic
      • Those companies that succeed in raising $ will have more board involvement, better resources, lower costs and less competition
      • Truly great companies will emerge from this period
  • 31. More Information
    • For a copy of this presentation, contact corpcomm@ventureone.com or call +1 (415) 538-2658.
    • Email products@ventureone.com for:
      • VentureSource: Instant access to venture capital intelligence
      • VentureOne Publications: VentureSource News (daily) and the Venture Capital Industry Report (annual).
      • Custom Report Services: Comparable Valuation Reports and specialized queries

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