The Florida Venture Forum, the Gulf Coast Venture Forum and  the EDC of Sarasota are proud to present  <ul><li>MARK G. HEE...
Thank you to our sponsors
State of the Venture Capital Industry October 2009 Mark G. Heesen President
Global Insight Study <ul><li>In 2008, venture backed companies: </li></ul><ul><ul><li>Provided 12.05 million US jobs </li>...
Fundraising & Resources
Capital under mgt & # firms peaked; Industry capital now $197B Source: NVCA 2008 Yearbook prepared by Thomson Reuters
VC Fundraising Matches Investment -  Late 2008’s Denominator Effect Killed Fundraising  (Less than $2B in 3Q 2009 Source: ...
Investment Marches On - Rumors that the Venture Industry has stopped investing are exaggerated
VC Investment Peaked in 2000;  2008 Was Down 8%; 1H09 was $6.8B   Source: PricewaterhouseCoopers/National Venture Capital ...
Investment Started Slowing Considerably in 3Q08 from a 5-year Steady Slow Growth Source: PricewaterhouseCoopers/National V...
Clean Technology investment grows significantly 2008: $4B in 286 Deals Source: PricewaterhouseCoopers/National Venture Cap...
Despite the recession Q4, VCs funded 1,202 new companies in 2008; Very slow YTD …. Source: PricewaterhouseCoopers/National...
Florida is currently ranked 17 th  for overall venture capital investment.  Venture Capital Investment In Billions 2008 St...
Venture-backed companies are a critical engine of economic growth for  Florida. <ul><li>From 1970 – 2008 venture capitalis...
Annual average venture capital investment in Florida from 2003-2008 was $400 million. $ Billions * 2000 numbers reflect te...
Florida venture-backed companies receiving top funding in 2008 represent a broad range of industries.  Top venture-funded ...
The highest venture funded industries in Florida are software, telecom, and energy. VC Investment in FL - Industry Breakou...
93% of venture capital investment into FL companies comes from out of state. In 2008, venture capital dollars invested in ...
The Exit Scene -  the importance of acquisitions has become clear over the past several years
IPO Levels Were Good in 2004 and Okay in 2007; Awful Now   Source: Thomson Reuters/National Venture Capital Association
What’s in the IPO Pipeline? Dismal Short Term… Don’t confuse “uptick” with “recovery”… Source: Thomson Reuters/National Ve...
VB Acquisition Counts Were Steady; Down Now – Quality Varies Source: Thomson Reuters/National Venture Capital Association
M&A Exits Aren’t Providing Much Liquidity Either Source: Thomson Reuters/National Venture Capital Association
Those Few Acquisitions Which Do Happen Are Not Great Source: Thomson Reuters/National Venture Capital Association – Undisc...
Venture Exit Counts- IPOs and M&A  by  Year Source: Thomson Reuters/National Venture Capital Association
Performance
Venture Capital Returns: Still Around 20% over the long haul net to the LPs Through Q2 2009 Except * through Q1 2009 Sourc...
Public Policy and The Venture Industry Some Wins; Many Challenges …
American competitiveness  ...   <ul><li>More people will graduate in the US [in 2006] with sports-exercise degrees than el...
Key US VC building blocks ... Our Ecosystem! <ul><li>Capital formation </li></ul><ul><ul><li>Prudent man rule – enabled pe...
“ Buy low… sell high” is easier if you really buy low! Source: PricewaterhouseCoopers/National Venture Capital Association...
www.nvca.org
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State of the Venture Capital Industry - Mark G. Heesen

  1. 1. The Florida Venture Forum, the Gulf Coast Venture Forum and the EDC of Sarasota are proud to present <ul><li>MARK G. HEESEN </li></ul><ul><li>State of the Venture Capital Industry </li></ul><ul><li>October 14, 2009 </li></ul><ul><li>Sarasota, Florida </li></ul>
  2. 2. Thank you to our sponsors
  3. 3. State of the Venture Capital Industry October 2009 Mark G. Heesen President
  4. 4. Global Insight Study <ul><li>In 2008, venture backed companies: </li></ul><ul><ul><li>Provided 12.05 million US jobs </li></ul></ul><ul><ul><li>Had sales of $2.3 trillion </li></ul></ul><ul><ul><ul><li>Represents 20.5% of GDP </li></ul></ul></ul><ul><ul><li>Still dominated venture-created sectors </li></ul></ul><ul><ul><ul><li>74% of telecommunications jobs </li></ul></ul></ul><ul><ul><ul><li>81% of software jobs </li></ul></ul></ul><ul><ul><ul><li>55% of semiconductor revenue </li></ul></ul></ul><ul><ul><ul><li>67% of electronics/instrumentation revenue </li></ul></ul></ul>Source: Venture Impact 2009 by Global Insight
  5. 5. Fundraising & Resources
  6. 6. Capital under mgt & # firms peaked; Industry capital now $197B Source: NVCA 2008 Yearbook prepared by Thomson Reuters
  7. 7. VC Fundraising Matches Investment - Late 2008’s Denominator Effect Killed Fundraising (Less than $2B in 3Q 2009 Source: Thomson Reuters/NVCA Does not include Corporate Venture groups.
  8. 8. Investment Marches On - Rumors that the Venture Industry has stopped investing are exaggerated
  9. 9. VC Investment Peaked in 2000; 2008 Was Down 8%; 1H09 was $6.8B Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters $103B $28B $7B
  10. 10. Investment Started Slowing Considerably in 3Q08 from a 5-year Steady Slow Growth Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters
  11. 11. Clean Technology investment grows significantly 2008: $4B in 286 Deals Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters
  12. 12. Despite the recession Q4, VCs funded 1,202 new companies in 2008; Very slow YTD …. Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters
  13. 13. Florida is currently ranked 17 th for overall venture capital investment. Venture Capital Investment In Billions 2008 State Ranking Rank State VC $ 1 California $14.1 2 Massachusetts 3.0 3 New York 1.3 4 Texas 1.3 5 Washington .93 6 Colorado .85 7 New Jersey .70 8 Pennsylvania .68 9 Minnesota .50 16 Michigan .243 17 Florida .235 18 Arizona .208
  14. 14. Venture-backed companies are a critical engine of economic growth for Florida. <ul><li>From 1970 – 2008 venture capitalists invested $10.2 billion in 639 companies in FL. </li></ul><ul><li>Public companies headquartered in FL that were once venture-backed account for 242,074 jobs and $76 billion in revenue.* </li></ul><ul><li>FL ranks #11 in jobs and #9 in revenues at venture-backed companies headquartered in the state.* </li></ul><ul><li>One U.S. job was created for every $42,135 of venture capital dollars invested in the state of Florida. </li></ul>* According to 2009 Global Insight study
  15. 15. Annual average venture capital investment in Florida from 2003-2008 was $400 million. $ Billions * 2000 numbers reflect technology bubble * # Companies
  16. 16. Florida venture-backed companies receiving top funding in 2008 represent a broad range of industries. Top venture-funded FL companies - 2008 Highwinds Network Group, Inc Develops infrastructure software and provides wholesale hosting services Lehigh Technologies, LLC Manufactures and distributes industrial polymers SkyCross, Inc. Provides antenna-centric radio-frequency (RF) solutions Pentaho Corporation Develops Open Source Business Intelligence (BI) software Persystent Technology Corporation Provides software for the automatic repair and security of PCs Renal CarePartners, Inc. Operates as a specialized kidney dialysis services company BFS Companies, Inc. Provides working capital advances to small businesses Lifestyle Family Fitness Operates a fitness club chain with nine locations in Florida LOC-AID Technologies, Inc. Develops turnkey systems and customized wireless mobile data solutions Anansi Networks, Inc. Provides wireless communication system technologies
  17. 17. The highest venture funded industries in Florida are software, telecom, and energy. VC Investment in FL - Industry Breakout - 2008
  18. 18. 93% of venture capital investment into FL companies comes from out of state. In 2008, venture capital dollars invested in FL companies came from venture firms headquartered in:
  19. 19. The Exit Scene - the importance of acquisitions has become clear over the past several years
  20. 20. IPO Levels Were Good in 2004 and Okay in 2007; Awful Now Source: Thomson Reuters/National Venture Capital Association
  21. 21. What’s in the IPO Pipeline? Dismal Short Term… Don’t confuse “uptick” with “recovery”… Source: Thomson Reuters/National Venture Capital Association
  22. 22. VB Acquisition Counts Were Steady; Down Now – Quality Varies Source: Thomson Reuters/National Venture Capital Association
  23. 23. M&A Exits Aren’t Providing Much Liquidity Either Source: Thomson Reuters/National Venture Capital Association
  24. 24. Those Few Acquisitions Which Do Happen Are Not Great Source: Thomson Reuters/National Venture Capital Association – Undisclosed txns are prorated
  25. 25. Venture Exit Counts- IPOs and M&A by Year Source: Thomson Reuters/National Venture Capital Association
  26. 26. Performance
  27. 27. Venture Capital Returns: Still Around 20% over the long haul net to the LPs Through Q2 2009 Except * through Q1 2009 Source: Cambridge Associates U.S Venture Capital Index ®, the performance benchmark of the National Venture Capital Association Period Ending 1 Qtr 1 Year 10 Year 20 Year 06/30/2009 (Current) 0.2% -17.1% 14.3% 22.7% 03/31/2009 (Last Qtr) -2.9% -17.5% 26.2% 22.5% 12/31/2008 (Prior) -12.5% -16.5% 35.0% 22.3% DJIA 11.0% -23.0% -2.6% 8.8%* NASDAQ Composite 20.0% -20.0% -3.7% 6.8%* S&P 500 15.2% -26.2% -3.9% 7.4%*
  28. 28. Public Policy and The Venture Industry Some Wins; Many Challenges …
  29. 29. American competitiveness ... <ul><li>More people will graduate in the US [in 2006] with sports-exercise degrees than electrical engineering degrees. </li></ul><ul><li>So if we want to be the massage capital of the world, we’re well on our way … </li></ul><ul><li>Jeffrey Immelt </li></ul><ul><li>CEO of GE in a </li></ul><ul><li>2006 Globalist interview </li></ul>
  30. 30. Key US VC building blocks ... Our Ecosystem! <ul><li>Capital formation </li></ul><ul><ul><li>Prudent man rule – enabled pension investment </li></ul></ul><ul><ul><li>LP laws </li></ul></ul><ul><ul><li>Capital gains tax reduction </li></ul></ul><ul><li>Empowered entrepreneurs </li></ul><ul><ul><li>Capital gains tax reductions </li></ul></ul><ul><ul><li>Stock options/team building tools </li></ul></ul><ul><ul><li>Reasonable bankruptcy laws </li></ul></ul><ul><li>Protect companies – IP laws </li></ul><ul><li>Abundant customers willing to do business with SMEs </li></ul><ul><li>Exit markets – the NASDAQ </li></ul><ul><li>Face-to-face investing/proximity </li></ul><ul><li>Cultural acceptance </li></ul>
  31. 31. “ Buy low… sell high” is easier if you really buy low! Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters Company Total Venture Investment $M Recent Market Cap/ Acq Price $M [1/2009] Cisco 3 89,760 eBay 7 16,460 Amazon.com 8 20,550 Apple 9 71,450 YouTube 12 1,650 Google 40 90,610 JetBlue 173 1,710 WebVan 441 0
  32. 32. www.nvca.org
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