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State of the VC Industry Source: PWC NVCA Report Q1 ‘06 $0 $100 $80 $60 $40 $20 Total Investment in Billions Investment # of Deals 1999 - 8000 6000 4000 2000 Q1 2006 Investment of $5.6B for 761 deals 2000 2001 2002 2003 2004 2005 Investment reaches a state of equilibrium
State of the VC industry Life Sciences $1.5B $5.6B, 716 deals in Q1 06 Software $1.2B Internet $0.8B Telecom $0.6B Media & Entt $0.4B $1.3B, 215 first-time financing deals Source: PWC NVCA Report Q1 ‘06
Stages of funding Financing is provided for a company expected to "go public“ within six months to a year. Later Funds are provided for the major expansion of a company which has increasing sales volume. Third Working capital is provided for the expansion of a company to support growing accounts receivable and inventories . Second Growth & Expansion Funding Stages Financing is provided to companies that require funds to initiate commercial-scale manufacturing and sales . First Financing is provided to newly formed companies for use in completing product development and in initial marketing . Seed A small amount of capital is provided to entrepreneur to prove a concept for a potentially profitable business opportunity. Pre-Seed Initial Funding Stages
Investment Criteria Source: Ten3 Coach Expected rate of return Track record of the entrepreneur Quality of product Investor liked entrepreneur (s) upon meeting Perceived financial rewards Growth potential of the market Sales potential of the product Expertise of the entrepreneur (s) Enthusiasm of the entrepreneur (s) Trustworthiness of the entrepreneur (s) Criteria 7 10 8 9 10 7 9 5 4 8 6 6 5 3 2 4 3 1 1 2 Ranking by VCs Ranking by Angels