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PREPARED BY3 Times Square18th FloorNew York, NY 10036www.thomsonreuters.com1655 Fort Myer DriveSuite 850Arlington, VA 2220...
March 2013Dear Reader:These are interesting times characterized by economic and political uncertainty - and little forward...
2 Thomson ReutersNVCA BOARD OF DIRECTORS 2012-2013Executive CommitteeRay Rothrock Josh GreenChair Chair-ElectVenrock Assoc...
For the National Venture Capital AssociationPrepared by Thomson ReutersCopyright © 2013 Thomson ReutersThe information pre...
National Venture Capital Association1655 Fort Myer Drive, Suite 850Arlington, Virginia 22209-3114Telephone: 703-524-2549Te...
Table of ContentsWhat is Venture Capital? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...
This page is intentionally left blank.6 Thomson ReutersNational Venture Capital Association
Thomson Reuters 7Venture capital has enabled the United States to sup-port its entrepreneurial talent and appetite by turn...
Many technologies currently under development byventure capital firms are truly disruptive technologiesthat do not lend th...
Executive SummaryIntroductionThe National Venture Capital Association 2013Yearbook provides a summary of venture capitalac...
National Venture Capital Association10 Thomson Reuters05010015020025030035019851986198719881989199019911992199319941995199...
meant that there was an increase in the averageamount of capital managed by each principal. It ispossible going forward, t...
National Venture Capital Association12 Thomson ReutersFigure 7.0Venture Capital Investments in 2012Industry Sector by Doll...
acquisition markets has not enabled most firms topay out sufficient distributions to their investors tobegin raising anoth...
National Venture Capital Association14 Thomson ReutersIndustrial/Energy sector to 10.5% of the total. MedicalDevices round...
ExitsOnce successful portfolio companies mature, venturefunds generally exit their positions in those compa-nies by taking...
This page is intentionally left blank.National Venture Capital Association16 Thomson Reuters
Industry ResourcesMETHODOLOGYHistorically we have calculated industry size using a“rolling eight years of fundraising” pro...
05010015020025030035019851986198719881989199019911992199319941995199619971998199920002001200220032004200520062007200820092...
0204060801001201401600-1010-2525-5050-100100-250250-500500-10001000+155125111 112139916047Capital Under Management ($ Mill...
No. Estimated Avg MgtPrincipals Industry Per PrincipalYear Per Firm Principals ($M)2007 8.7 8,665 30.02008 8.5 7,293 28.32...
SSttaattee 11998855 11998866 11998877 11998888 11998899 11999900 11999911 11999922 11999933 11999944 11999955 11999966 119...
Life of IT Funds % ofIn Years Funds<= 10 7%11-12 20%13-14 27%15-16 22%17-18 14%>=19 10%Figure 1.08Life of IT Funds in Year...
Capital CommitmentsMethodologyAs defined by Thomson Reuters, capital commitments,also known as fundraising, are firm capit...
National Venture Capital Association24 Thomson ReutersYear Sum ($Mil) % of Total PENo.Funds Sum ($Mil) No. Funds Sum ($Mil...
2013 NVCA YearbookThomson Reuters 25State 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 ...
National Venture Capital Association26 Thomson Reuters-2040608010012014016018020022024026028019851986198719881989199019911...
InvestmentsSectorsSoftware was the leading sector in 2012, receiving 31%of the total dollars. The second largest sector wa...
California-domiciled venture capital firms madeinvestments in 39 states in 2012. Approximately 49%of all the money investe...
2013 NVCA YearbookThomson Reuters 29AmtState # Companies # Deals Invested ($Bil)California 1,280 1,532 14.1Massachusetts 3...
National Venture Capital Association30 Thomson ReutersBusiness Productsand Services 0.4%Computers andPeripherals 2%Consume...
2013 NVCA YearbookThomson Reuters 31ARNEWY8AL56CO5DE38GA2HI15KSMA57MD33MN12MO2MS1MT2ND12NH12NM44OH94TX31UT5VT9WI250AKARNEW...
National Venture Capital Association32 Thomson ReutersRReeggiioonn 11998855 11998866 11998877 11998888 11998899 11999900 1...
2013 NVCA YearbookThomson Reuters 33SSttaaggee 11998855 11998866 11998877 11998888 11998899 11999900 11999911 11999922 119...
National Venture Capital Association34 Thomson ReutersStage 1993-1Q 1993-2Q 1993-3Q 1993-4Q 1993Total 1994-1Q 1994-2Q 1994...
2013 NVCA YearbookThomson Reuters 35Stage 1989-1Q 1989-2Q 1989-3Q 1989-4Q 1989Total 1990-1Q 1990-2Q 1990-3Q 1990-4Q 1990To...
National Venture Capital Association36 Thomson ReutersIndustry 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996...
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  1. 1. PREPARED BY3 Times Square18th FloorNew York, NY 10036www.thomsonreuters.com1655 Fort Myer DriveSuite 850Arlington, VA 22209www.nvca.orgINCLUDING STATISTICS FROM THEPricewaterhouseCoopers/National Venture Capital AssociationMoneyTree™ Report based on data from Thomson ReutersNATIONALVENTURECAPITALASSOCIATIONNATIONALVENTURECAPITALASSOCIATIONYEARBOOK2013NATIONALVENTURECAPITALASSOCIATIONYEARBOOK 2013
  2. 2. March 2013Dear Reader:These are interesting times characterized by economic and political uncertainty - and little forwardmotion. And yet in the entrepreneurial section of the economy, the opportunities to create greatcompanies remain unabated. There is wide agreement among policy makers on the importance ofentrepreneurial companies to economic growth and well-being. Venture capital is a major driver ofthat entrepreneurial economy. The nation continues to look to this sector for job creation, economicdevelopment, better healthcare, cleaner technology, and a faster, better, and more secure internet.The NVCA Yearbook 2013, prepared by Thomson Reuters, is the 16th iteration of a series launchedin early 1998 by NVCA and what is now Thomson Reuters. Since then we have joined forces withPricewaterhouseCoopers to provide the best possible information on venture capital deals across all50 states. This investment information is tracked and reported by the PricewaterhouseCoopers/NVCAMoneyTreeTMReport based on data from Thomson Reuters.On behalf of the National Venture Capital Association board of directors and staff, we are pleased topresent you with the latest statistics that describe the activity of the venture capital industry in theUnited States. These statistics reflect strong survey participation by venture capital practitioners.This support has allowed us to bring appropriate transparency to a part of the economy that mostpeople are aware of but few really understand. Your comments are always welcome atresearch@nvca.org.NVCA believes that it is more important than ever to effectively tell the story of venture capital, dif-ferentiate it from other forms of alternative assets, and explain what’s needed to continue creatinggreat, leading-edge companies. We believe that a strong venture capital industry is essential toAmerica’s future and our quality of life. NVCA is proud to be funding innovation and empoweringentrepreneurs!Very truly yoursDiana Frazier Mark G. Heesen John S. TaylorFLAG Capital Management NVCA President NVCA Head of ResearchNVCA Director & Chair,NVCA Research Committee
  3. 3. 2 Thomson ReutersNVCA BOARD OF DIRECTORS 2012-2013Executive CommitteeRay Rothrock Josh GreenChair Chair-ElectVenrock Associates Mohr, Davidow VenturesMichael Greeley Jonathan LeffTreasurer At-Large & Research CommitteeFlyBridge Capital Partners Deerfield ManagementJason Mendelson Scott SandellAt-Large At-LargeFoundry Group New Enterprise AssociatesResearch CommitteeDiana Frazier Mike ElliottChair, Research Committee Noro-Moseley PartnersFLAG Capital Management, LLCAdam GrosserSilver Lake KraftwerkBoard Members At-LargeJonathan Callaghan Maria CirinoTrue Ventures .406 VenturesDavid Douglass Bruce EvansDelphi Ventures Summit PartnersClaudia Fan Munce Norm FogelsongIBM Venture Capital Group Institutional Venture PartnersVenky Ganesan Robert GoodmanMenlo Ventures Bessemer Venture PartnersMark Gorenberg Jason GreenHummer Winblad Venture Partners Emergence Capital PartnersRoss Jaffe, MD Ray LeachVersant Ventures Jumpstart, Inc.Sherrill Neff Robert NelsenQuaker BioVentures ARCH Venture PartnersDavid Lincoln James MarverElement Partners VantagePoint Capital PartnersAnne RockholdAccel Partners
  4. 4. For the National Venture Capital AssociationPrepared by Thomson ReutersCopyright © 2013 Thomson ReutersThe information presented in this report has been gathered with the utmost carefrom sources believed to be reliable, but is not guaranteed. Thomson Reuters dis-claims any liability including incidental or consequential damages arising fromerrors or omissions in this report.2013National Venture Capital AssociationYearbookThomson Reuters 3
  5. 5. National Venture Capital Association1655 Fort Myer Drive, Suite 850Arlington, Virginia 22209-3114Telephone: 703-524-2549Telephone: 703-524-3940www.nvca.orgPresidentMark G. HeesenHead of ResearchJohn S. TaylorSenior Vice PresidentMolly M. MyersSenior Vice President of Federal Policy & PoliticalAdvocacyJennifer Connell DowlingVice President of CommunicationsEmily MendellVice President of Membership & Member FirmLiaisonJanice MawsonVice President of Federal Policy & Political AdvocacyEmily A. BakerChief Marketing OfficerJeanne Lazarus MetzgerVice President of Federal Life Science PolicyKelly SloneMembership and Database ManagerTerry SammManager of Administration and MeetingsAllyson ChappellAccounting ManagerBeverley BadleyAdministrative AssistantGwendolyn TaylorResearch LabMavis Moulterd, Thea ShepherdThomson Reuters3 Times Square, 18th FloorNew York, NY 10036Telephone: 646-223-4431Fax: 646-223-4470www.thomsonreuters.comGlobal Head of Deals & Private EquityStephen N. Case IIVice President, Deals and Private Equity OperationsShariq KajijiGlobal Business Manager – Private EquityJim BeecherEditor-in-ChargeDavid TollGlobal Private Equity Operations ManagerAnna Aquino-ChavezPress ManagementMatthew TooleProduct ManagerLori Ann SilvaContent SpecialistPaul PantallaData SpecialistFrancis BaseResearch EditorEamon BeltranSenior Art DirectorDavid CookeSales Manager – Publications (Buyouts, VCJ, peHUB)Greg Winterton (646-223-6787)ThomsonONE.com Sales:Dave Sharma (646-223-4048)4 Thomson ReutersNational Venture Capital Association 2013 Yearbook
  6. 6. Table of ContentsWhat is Venture Capital? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Industry Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 11Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Exits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 15Industry Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 17Capital Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Investments.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Exits: IPOs and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Appendix A: Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61Appendix B: MoneyTree Report Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Appendix C: MoneyTree Geographical Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Appendix D: Industry Codes (VEICs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83Appendix E: Industry Sector VEIC Ranges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95Appendix F: Stage Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Appendix G: Data Sources and Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99Appendix H: International Convergence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Appendix I: US Accounting Rulemaking and Valuation Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105Appendix J: Non-US Private Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Thomson Reuters 5
  7. 7. This page is intentionally left blank.6 Thomson ReutersNational Venture Capital Association
  8. 8. Thomson Reuters 7Venture capital has enabled the United States to sup-port its entrepreneurial talent and appetite by turningideas and basic science into products and servicesthat are the envy of the world. Venture capital fundsbuild companies from the simplest form – perhapsjust the entrepreneur and an idea expressed as a busi-ness plan – to freestanding, mature organizations.Risk Capital for BusinessVenture capital firms are professional, institutionalmanagers of risk capital that enables and supports themost innovative and promising companies. Thismoney funds new ideas that could not be financedwith traditional bank financing, that threaten estab-lished products and services in a corporation, and thattypically require five to eight years to be launched.Venture capital is quite unique as an institutionalinvestor asset class. When an investment is made in acompany, it is an equity investment in a companywhose stock is essentially illiquid and worthless until acompany matures five to eight years down the road.Follow-on investment provides additional funding asthe company grows. These “rounds,” typically occur-ring every year or two, are also equity investment, withthe shares allocated among the investors and manage-ment team based on an agreed “valuation.” But, unlessa company is acquired or goes public, there is littleactual value. Venture capital is a long-term investment.More Than MoneyThe U.S. venture industry provides the capital to cre-ate some of the most innovative and successful com-panies. But venture capital is more than money.Venture capital partners become actively engagedwith a company, typically taking a board seat. With astartup, daily interaction with the management team iscommon. This limits the number of startups in whichany one fund can invest. Few entrepreneurs approach-ing venture capital firms for money are aware thatthey essentially are asking for 1/6 of a person!Yet that active engagement is critical to the success ofthe fledgling company. Many one- and two-personcompanies have received funding but no one- or two-person company has ever gone public! Along the way,talent must be recruited and the company scaled up.Ask any venture capitalist who has had an ultra-suc-cessful investment and he or she will tell you that thecompany that broke through the gravity evolved fromthe original business plan concept with the carefulinput of an experienced hand.Deal Flows — Where The Buys AreFor every 100 business plans that come to a venturecapital firm for funding, usually only 10 or so get aserious look, and only one ends up being funded. Theventure capital firm looks at the management team,the concept, the marketplace, fit to the fund’s objec-tives, the value-added potential for the firm, and thecapital needed to build a successful business. A busyventure capital professional’s most precious asset istime. These days, a business concept needs to addressworld markets, have superb scalability, be made suc-cessful in a reasonable timeframe, and be truly inno-vative. A concept that promises a 10 or 20 percentimprovement on something that already exists is notlikely to get a close look.What is Venture Capital?Venture Capital Backed CompaniesKnown for Innovative Business ModelsEmployment at IPO and NowCompany As of IPO Current # ChangeThe Home Depot 650 331,000 330,350Starbucks Corporation 2,521 160,000 157,479Staples 1,693 89,019 87,326Whole Foods Market, Inc. 2,350 69,500 67,150eBay 138 31,500 31,362Venture Capital Backed CompaniesKnown for Innovative Technology and ProductsEmployment at IPO and NowCompany As of IPO Current # ChangeMicrosoft 1,153 94,000 92,847Intel Corporation 460 100,100 99,640Medtronic, Inc. 1,287 45,000 43,713Apple Inc. 1,015 76,100 75,085Google 3,021 53,861 50,840JetBlue 4,011 12,070 8,059Source: Global Insight; Updated from ThomsonOne 2/2013
  9. 9. Many technologies currently under development byventure capital firms are truly disruptive technologiesthat do not lend themselves to being embraced bylarger companies whose current products could becannibalized by this. Also, with the increased empha-sis on public company quarterly results, many largerorganizations tend to reduce spending on research anddevelopment and product development when thingsget tight. Many talented teams have come to the ven-ture capital process when their projects were turneddown by their companies.Common Structure — Unique ResultsWhile the legal and economic structures used to cre-ate a venture capital fund are similar to those used byother alternative investment asset classes, venture cap-ital itself is unique. Typically, a venture capital firmwill create a Limited Partnership with the investors asLPs and the firm itself as the General Partner. Each“fund,” or portfolio, is a separate partnership. A newfund is established when the venture capital firmobtains necessary commitments from its investors, say$100 million. The money is taken from investors asthe investments are made. Typically, an initial fundingof a company will cause the venture fund to reservethree or four times that first investment for follow-onfinancing. Over the next three to eight or so years, theventure firm works with the founding entrepreneur togrow the company. The payoff comes after the compa-ny is acquired or goes public. Although the investorhas high hopes for any company getting funded, onlyone in six ever goes public and one in three isacquired.Economic Alignment of all Stakeholders —An American Success StoryVenture capital is rare among asset classes in that suc-cess is truly shared. It is not driven by quick returns ortransaction fees. Economic success occurs when thestock price increases above the purchase price. Whena company is successful and has a strong public stockoffering, or is acquired, the stock price of the compa-ny reflects its success. The entrepreneur benefits fromappreciated stock and stock options. The rank and fileemployees throughout the organization historicallyalso do well with their stock options. The venture cap-ital fund and its investors split the capital gains per apre-agreed formula. Many college endowments, pen-sion funds, charities, individuals, and corporationshave benefited far beyond the risk-adjusted returns ofthe public markets.Beyond the IPOMany of the most exciting venture capital backedcompanies left the venture portfolios after they wentpublic. Far from being a destination, the IPO processprovides needed growth capital for a growing compa-ny. A 2009 analysis by IHS Global Insight shows thatmore than 90% of the jobs at today’s venture backedpublic companies were created after it went public.That is, these companies on average are 10% of theirmature size at the time they go public.What’s AheadMuch of venture capital’s success has come from theentrepreneurial spirit pervasive in the American culture,financial recognition of success, access to good science,and fair and open capital markets. It is dependent upona good flow of science, motivated entrepreneurs, protec-tion of intellectual property, and a skilled workforce.The nascent deployment of venture capital in othercountries is gated by a country’s or region’s cultur-al fit, tolerance for failure, services infrastructurethat supports developing companies, intellectualproperty protection, efficient capital markets, andthe willingness of big business to purchase fromsmall companies.The Exit FunnelOutcomes of the 11,686 CompaniesFirst Funded 1991 to 2000Went/Going Public14%Acquired33%Known Failed18%Still Privateor Unknown*35%*Of these, most have quietly failed8 Thomson ReutersNational Venture Capital Association
  10. 10. Executive SummaryIntroductionThe National Venture Capital Association 2013Yearbook provides a summary of venture capitalactivity in the United States. This ranges from invest-ments into portfolio companies to capital managedby general partners to fundraising from limited part-ners to exits of the investments by either IPOs ormergers and acquisitions. The statistics for this pub-lication were assembled primarily from theMoneyTree™ Report by PricewaterhouseCoopersand the National Venture Capital Association, basedon data from Thomson Reuters and analyzed throughthe ThomsonONE.com (formerly VentureXpert)database of Thomson Reuters, which has beenendorsed by the NVCA as the official industry activ-ity database. Subscribers to ThomsonONE can recre-ate most of the charts in this publication and reportindividual deal detail and more granular statisticsthan provided herein.Industry ResourcesThe activity level of the U.S. venture capital industryis roughly half of what it was at the 2000-era peak.For example, in 2000, 1053 firms each invested $5million or more during the year. In 2012, the countwas less than half that at 522.Venture capital under management in the UnitedStates by the end of 2012 decreased to $199.2 billionas calculated using the methodology describedbelow. However, looking behind the numbers, weknow that the industry continues to contract from thecirca 2000 bubble high of $261.2 billionThe slight downtick in number of firms and capitalmanaged in 2012 perhaps understates a consolidat-ing trend. The average venture capital firm shrunk to7.0 principals per firm from 7.4 in 2011. The corre-sponding drop in headcount to under 6,000 princi-pals is almost one-third lower than 2007 levels. ThisDuring 2012, many of the metrics describing the venture capital industry in the United States were similar tothose of the prior two years. The decline in the number of firms and capital managed was expected but not aslarge as some were anticipating. Venture investment focused on companies in the seed and early stages, withmany later-stage companies continuing to await a helpful IPO environment. Investment in early-stage life sci-ence companies continues to soften.Fundraising remained very challenging for the majority of venture firms, largely because of a dearth of healthyexits that would distribute yet-unrealized returns to current fund investors. The number of initial public offer-ings in 2012 fell slightly from 2011 levels, but the proceeds and IPO valuation tally were both up significant-ly, largely as a result of one huge IPO and a handful of large ones.A healthy venture capital ecosystem requires its metrics to be in balance. And while the quality of new businessopportunities, known as deal flow, remains very high and the best opportunities are getting funded, stressesremain.Thomson Reuters 911999922 22000022 22001122No. of VC Firms in Existence 358 1,089 841No. of VC Funds in Existence 616 2,119 1,269No. of Principals 4,996 14,541 5,887No. of First Time VC Funds Raised 13 25 43No. of VC Funds Raising Money This Year 78 176 162VC Capital Raised This Year ($B) 4.9 15.7 20.1VC Capital Under Management ($B) 28.7 272.1 199.2Avg VC Capital Under Mgt per Firm ($M) 80.2 249.9 236.9Avg VC Fund Size to Date ($M) 39.1 94.4 110.6Avg VC Fund Size Raised This Year ($M) 62.8 89.2 124.1Largest VC Fund Raised to Date ($M) 1,775.0 6,300.0 6,300.0Figure 1.0Venture Capital Under ManagementSummary Statistics
  11. 11. National Venture Capital Association10 Thomson Reuters0501001502002503003501985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)YearFigure 2.0Capital Under ManagementU.S. Venture Funds ($ Billions)1985 to 2012Figure 3.0Capital Commitments toU.S. Venture Funds ($ Billions)1985 to 20120204060801001201985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)Year
  12. 12. meant that there was an increase in the averageamount of capital managed by each principal. It ispossible going forward, that the number of principalsper firm will increase as the number of firmsdecreases. This is because the bulk of the moneybeing raised today is being raised by larger, special-ty, and boutique firms.CommitmentsNew commitments to venture capital funds in theUnited States increased for the second year in a row,which follows four years of declines. In 2012, com-mitments totaling $20.1 billion were made to 183funds. This is roughly two-thirds of the annual levelsseen in 2005-2007 and approximately one-fifth of theannual amount raised at the bubble peak.When you look behind the 2012 capital commitmentsat the specific funds being raised, the 10 largest fundsrepresent 48% of the capital raised, with 173 fundsraising the other 52%.This is the sixth consecutive year in which moremoney was invested by the industry than raised innew commitments. That has been the case in 11 ofthe past 13 years. While this is not a true apples-to-apples comparison, it does explain the industry’sstrong interest in raising additional funds in 2013and beyond. The narrow success of recent IPO and2013 NVCA YearbookThomson Reuters 11Figure 4.0Investments inPortfolio Companies ($ Billions)1985 to 2012Investment InvestmentIndustry Group # Companies # Deals Amt ($Bil) # Companies # Deals Amt ($Bil)Information Technology 2,130 2,480 16.5 870 870 3.0Medical/Health/Life Science 649 818 6.8 148 148 0.7Non-High Technology 364 425 3.4 156 156 0.4Total 3,143 3,723 26.7 1,174 1,174 4.1All Investments Initial InvestmentsFigure 5.0Venture Capital Investments in 2012By Industry Group0204060801001201985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)Year
  13. 13. National Venture Capital Association12 Thomson ReutersFigure 7.0Venture Capital Investments in 2012Industry Sector by Dollars InvestedBusiness Productsand Services 0.4%Computers andPeripherals 2%Consumer Productsand Services 5%Electronics/Instrumentation 1%Biotechnology15%Financial Services 1%Healthcare Services 1%Industrial/Energy 10%IT Services 7%Media andEntertainment 7%Medical Devicesand Equipment 9%Networking andEquipment 1%Retailing/Distribution 2%Semiconductors3%Telecommunications 2%Software 31%Other0.2%Seed 3%Early Stage 30%Expansion 35%Later Stage 32%Figure 6.0Venture Capital Investments in 2012Stage by Dollars Invested
  14. 14. acquisition markets has not enabled most firms topay out sufficient distributions to their investors tobegin raising another fund. For the vast majority offirms, raising additional capital right now is verydifficult.InvestmentsMeasuring industry activity with the total dollarsinvested in a given year shows that the industry hasremained generally in the $20 billion to $30 billionrange since 2002. In 2012, $26.7 billion was invested in3,143 companies. This is less than 2011 totals andgreater than 2010 totals.The number of first-time fund-ings likewise was less than 2011 and greater than 2010.Further parsing the data shows an increasing portion ofthe investment dollars going to California companies.Software was the leading sector in 2012, receiving31% of the total dollars. The second largest sector wasBiotechnology which fell to roughly half that amountat 15.4% of total investment The continued interest inClean Technology investing brought the2013 NVCA YearbookThomson Reuters 13Figure 8.02012 InvestmentsBy StateYear1985 48 763 13 16 1,991 32 47 3 41986 104 2,414 14 23 166,260 53 1889 4 41987 86 2,125 17 25 10,790 46 150 4 41988 43 769 15 18 20,523 51 555 3 41989 42 873 16 21 5,479 51 166 4 41990 47 1,108 20 24 5,886 60 178 4 41991 120 3,726 27 31 14,151 78 168 5 51992 150 5,431 24 36 15,759 68 147 5 51993 175 6,141 24 35 14,430 75 129 5 61994 140 4,004 24 29 9,854 67 91 5 51995 184 7,859 36 43 17,046 103 136 4 51996 256 12,666 35 49 40,360 111 191 3 41997 141 5,831 33 41 17,784 99 146 3 61998 79 4,221 43 53 9,649 149 214 3 31999 280 24,005 70 86 86,669 294 425 3 32000 238 27,443 83 115 63,610 336 464 3 42001 37 4,130 80 112 15,545 304 576 4 42002 24 2,333 89 97 8,322 266 347 3 52003 26 2,024 71 78 7,412 252 285 5 62004 82 10,032 70 122 50,268 254 613 6 62005 59 5,113 68 87 39,702 202 673 5 52006 68 7,127 85 105 71,467 293 1067 5 62007 92 12,365 97 134 68,282 361 742 6 62008 7 765 83 109 3,645 278 521 7 72009 13 1,980 123 152 9,192 548 707 6 72010 68 7,609 93 112 111,386 431 1662 5 62011 51 10,690 106 210 94,987 606 1862 6 72012 49 21,451 89 438 122,264 371 2495 7 8Mean Age@ IPO (yrs)Num of IPOsOfferAmount($Mil)Med OfferAmt ($Mil)Mean OfferAmt ($Mil)Post OfferValue ($Mil)Med PostValue ($Mil)Mean PostValue ($Mil)Median Age@ IPO (yrs)Figure 9.0Venture-Backed IPOsNumber of Pct of Investment Pct ofState Companies Total ($ Millions) TotalCalifornia 1,280 41% 14,128.8 53%Massachusetts 326 10% 3,067.9 12%New York 287 9% 1,856.7 7%Washington 101 3% 931.5 3%Texas 134 4% 930.5 3%Illinois 76 2% 570.4 2%Colorado 85 3% 564.2 2%Pennsylvania 154 5% 517.8 2%New Jersey 49 2% 429.3 2%Virginia 62 2% 372.3 1%All Others 589 19% 3,282.8 12%Total 3,143 26,652.4
  15. 15. National Venture Capital Association14 Thomson ReutersIndustrial/Energy sector to 10.5% of the total. MedicalDevices rounded out the top four sectors at 9.4%.The life sciences share of the venture capital invest-ment dollars decreased in 2012 to its lowest levelsince 2002. In 2012, 15.4% of the money went intoBiotechnology, 9.4% into Medical Devices, and 1.2%into Healthcare Services, totaling 26.0%. This isdown from the 33.1% combined share in 2009.As has been the case for several years, attention hasbeen focused on the two ends of the spectrum.Looking at deal counts, 2012 actually saw the highestpercentage of seed- and early-stage deals since at least1985 (51.8% of total deals). This certainly wouldchallenge the suggestion that the industry’s attentionis single-focused on later-stage companies. That said,the 22.4% of deals going to later-stage companies isalso toward the top end of the historical range. Thereremains a record number of companies in portfoliosin the later stage of development that in most otherpositions in the business cycle would have alreadygone public or otherwise been acquired.With the rule of thumb that a healthy venture capitalindustry invests in 1,000-1,300 new companies eachyear, the 1,174 first fundings in 2012 is very much inthat range. Not surprisingly, 81% of those first roundinvestments were made at the seed- and early-stagelevels.The year 2012 provided an interesting contrast in geo-graphic dispersion. While 53% of all the investmentdollars went to California-based portfolio companies,a record for MoneyTree™, companies in 48 states andDC received financing, also a MoneyTree™ recordhigh.Number Number ($ Millions)Year Total Known Price Average1985 6 3 300.2 100.11986 8 1 63.4 9.11987 10 4 667.2 111.21988 17 9 920.7 115.11989 20 10 746.9 74.71990 19 7 120.3 10.01991 16 4 190.5 15.91992 69 43 2,119.1 81.51993 59 36 1,332.9 58.01994 82 56 3,207.1 123.41995 92 58 3,801.8 111.81996 107 76 8,230.8 265.51997 143 99 7,743.6 176.01998 189 113 8,002.0 105.31999 227 154 38,688.0 530.02000 379 245 79,996.4 597.02001 384 175 25,115.6 120.22002 363 165 11,913.2 60.22003 323 134 8,240.8 43.62004 402 199 28,846.1 142.12005 443 198 19,600.2 80.02006 485 207 24,288.5 87.42007 488 200 30,745.5 106.82008 416 134 16,236.9 57.62009 350 108 12,364.9 51.12010 521 149 17,700.3 47.62011 488 169 24,093.2 75.52012 449 121 21,516.2 65.6Figure 10.0Venture-Backed M&A Exits
  16. 16. ExitsOnce successful portfolio companies mature, venturefunds generally exit their positions in those compa-nies by taking them public through an initial publicoffering (IPO) or by selling them to presumably larg-er organizations (acquisition, or trade sale). This thenlets the venture fund distribute the proceeds toinvestors, raise a new fund for future investment, andinvest in the next generation of companies. This chap-ter considers each type of exit separately.IPOs in 2012 were a mixed bag at best. On the onehand, the number of venture-backed companies goingpublic actually fell from 2011 from 51 to 49. But thedollars raised in those initial public offerings morethan doubled from $10.7 billion to $21.5 billion. Butlooking behind the numbers, we see that Facebookitself raised $16.0 billion of that $21.5 billion, with afew other high-profile IPOs looming large in theremainder. This meant that many companies attempt-ing or seeking to go public were not able to do so.On the market valuation placed on these IPOs at theoffer price, 2012 was a very good year. The 49 IPOshad a valuation of $122.3 billion. This is the highestamount since 1986. What is quite striking (Fig 5.03),is the huge gap between median and mean (average)valuation of almost seven times! This suggests a hugeoutlier effect created by the very large IPOs that suc-ceeded.In 2012, the acquisition market weakened. There wasa slight decrease in the number of acquisitions, ortrade sales, of venture-backed companies. We tracked449 acquisitions, of which we had disclosed dealamounts for 121 of them. The sum of the disclosedvalues was also down at $21.5 billion. Just over one-fifth of them were acquired at 10 times or greater thanthe cumulative venture capital investment in thosecompanies. We tracked four acquisitions at more than$1 billion.2013 NVCA YearbookThomson Reuters 15
  17. 17. This page is intentionally left blank.National Venture Capital Association16 Thomson Reuters
  18. 18. Industry ResourcesMETHODOLOGYHistorically we have calculated industry size using a“rolling eight years of fundraising” proxy for capitalmanaged, number of funds, number of firms, etc. Thenumber of firms in existence will vary on a rollingeight-year basis as firms raise new funds or do notraise funds for more than eight years. Currently, weknow the industry is consolidating, but the eight- yearmodel now includes fund vintage years 2005-2012.However, through 2012, the rolling eight yearmethodology belies this contraction because the veryslow fundraising years of 2002-2004 were rolling outof the calculation.Under this methodology, we estimate that there arecurrently 841 firms with limited partnerships “inexistence.” To clarify, this is actually stating that thereare 841 firms that have raised a venture capital fundin the last eight years. In reality, fewer firms are actu-ally making new investments in 2012.To better report the actual number of active firms, weadded a column to the table to report the number ofindependent and corporate venture groups actuallyinvesting $5 million or more in a given year. These522 firms are less than half the level of 2000. Weexpect this statistic to fall further going forward.For this publication, we are primarily counting thenumber of firms with limited partnerships and areexcluding other types of investment vehicles. Fromthat description, it may appear that the statistics fortotal industry resources may be underestimated.However, this must be balanced with the fact that cap-ital under management by captive and evergreenfunds is difficult to compare equitably to typical lim-ited partnerships with fixed lives. For this analysisonly, the firms counted for capital under managementinclude firms with fixed-life partnerships and venturecapital funds they raised. If a firm raised both buyoutand venture capital funds, only the venture fundswould be counted in the calculation of venture capitalunder management.The activity level of the U.S. venture capital industry is roughly half of what it was at the 2000-era peak. Forexample, in 2000, 1053 firms each invested $5 million or more during the year. In 2012, the count was less thanhalf that at 522.Venture capital under management in the United States by the end of 2012 decreased to $199.2 billion as cal-culated using the methodology described below. However, looking behind the numbers, we know that the indus-try continues to contract from the circa 2000 bubble high of $261.2 billionThe slight downtick in firms and capital managed in 2012 perhaps understates a consolidating trend. The aver-age venture capital firm shrunk to 7.0 principals per firm from 7.4 in 2011. The corresponding drop in head-count to under 6,000 principals is almost one-third lower than 2007 levels. This meant that there was anincrease in the average amount of capital managed by each principal. It is possible going forward, that thenumber of principals per firm will increase as the number of firms decreases. This is because the bulk of themoney being raised today is being raised by larger, specialty, and boutique firms. For our purposes here, wedefine a principal to be someone who goes to portfolio company board meetings. That is, deal partners wouldbe included and firm CFOs would not be included.Geographic location of the largest venture firms is quite concentrated. California domiciled firms manage47.1% of the industry’s capital although these firms may be actively investing in other states and countries. Thisconcentration has been consistent for several years and may increase going forward, given the movement ofsome east coast funds westward. Taken together, the top five states (California, Massachusetts, New York,Connecticut, and Illinois) hold 81.4% of total venture capital in this country.Thomson Reuters 17
  19. 19. 0501001502002503003501985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)YearFigure 1.01Capital Under ManagementU.S. Venture Funds ($ Billions)1985 to 201218 Thomson ReutersVenture capital under management can be a complexstatistic to estimate. Indeed, capital under manage-ment reported by firms can differ from firm to firm asthere’s not one singular definition. For example, somefirms include only cumulative committed capital, oth-ers may include committed capital plus capital gains,and still other firms define it as committed capitalafter subtracting liquidations. To complicate matters,it is difficult to compare these totals to European pri-vate equity firms, which include capital gains as partof their capital under management measurements.For purposes of the analysis in this publication, wehave tried to clarify the industry definition of capitalunder management as the cumulative total of commit-ted capital less liquidated funds or those funds thathave completed their life cycle. Typically, venturecapital firms have a stated 10-year fixed life span,except for life science funds, which are often estab-lished as 12-year funds. Figure 1.08 shows the realityof fund life. Thomson Reuters calculates capital undermanagement as the cumulative amount committed tofunds on a rolling eight-year basis. Current capitalunder management is calculated by taking the capitalunder management calculation from the previousyear, adding in the current year’s funds’commitments,and subtracting the capital raised eight years prior.For this analysis, Thomson Reuters classifies venturecapital firms using four distinct types: private inde-pendent firms, financial institutions, corporations,and other entities. ‘Private independent’ firms areNational Venture Capital Association
  20. 20. 0204060801001201401600-1010-2525-5050-100100-250250-500500-10001000+155125111 112139916047Capital Under Management ($ Millions)This chart shows capital committed to U.S. venture firms in active funds. While much of the capital is managedby larger firms, of the 841 firms at the end of 2012, roughly 60% of them (504) managed $100 million or less. Bycomparison, just 47 firms managed active funds totaling more than $1 billion.Figure 1.03Distribution of FirmsBy Capital Managed 20121985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997PrivateIndependent 11,636 14,574 17,299 18,607 22,112 22,632 21,805 22,557 25,199 28,528 33,417 40,235 51,877FinancialInstitutions 3,368 3,508 3,442 3,178 2,714 2,802 2,392 2,220 2,484 2,924 3,758 5,123 7,209Corporations 1,739 1,709 2,062 2,148 2,095 2,142 2,086 2,211 1,526 1,573 1,345 2,032 2,348 3Other 857 909 897 867 779 725 618 313 191 275 380 409 665Total 17,600 20,700 23,700 24,800 27,700 28,300 26,900 27,300 29,400 33,300 38,900 47,800 62,100Figure 1.02Total Capital Under ManagementBy Firm Type 1985 to 2012 ($ Millions)Thomson Reuters 19made up of independent private and public firmsincluding both institutionally and non-institutionallyfunded firms and family groups. ‘Financial institu-tions’ refers to firms that are affiliates and/or sub-sidiaries of investment banks and non-investmentbank financial entities, including commercial banksand insurance companies. The ‘corporations’ classifi-cation includes venture capital subsidiaries and affili-ates of industrial corporations. In 2013, we will mod-ify the methodology to reflect virtually all direct cor-porate investment because many of the corporate ven-ture investors do not operate out of a separate fund orgroup. The capital under management statisticsreported in this section consist primarily of venturecapital firms investing through limited partnershipswith fixed commitment levels and fixed lives and donot include non-vintage “evergreen funds” or truecaptive corporate industrial investment groups with-out fixed commitment levels. The term ‘evergreenfunds’ refers to funds that have a continuous infusionof capital from a parent organization, as opposed tothe fixed life and commitment level of a closed-endventure capital fund.1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012P 76,398 120,221 187,475 221,105 221,634 225,208 233,976 242,466 255,714 238,766 194,698 171,713 175,980 183,482 180,93610,382 15,466 23,454 24,975 24,453 23,558 22,277 21,634 18,991 14,384 6,263 4,865 5,266 9,541 9,6703,245 6,797 11,604 12,787 12,766 12,717 12,245 12,044 11,964 8,828 4,171 2,979 3,458 4,483 4,497875 1,116 1,467 2,134 2,347 2,317 2,302 2,055 2,031 1,822 1,469 843 3,997 3,995 4,09890,900 143,600 224,000 261,000 261,200 263,800 270,800 278,200 288,700 263,800 206,600 180,400 188,700 201,500 199,2002013 NVCA Yearbook
  21. 21. No. Estimated Avg MgtPrincipals Industry Per PrincipalYear Per Firm Principals ($M)2007 8.7 8,665 30.02008 8.5 7,293 28.32009 8.6 6,760 26.42010 8.0 6,328 25.72011 7.4 6,231 28.62012 7.0 5,887 33.8Figure 1.05Principals InformationState ($ Millions)CA 93,814.8MA 34,482.3NY 21,378.0CT 8,051.2IL 4,369.0Total* 162,095.4*Total includes above 5 states onlyFigure 1.06Top 5 StatesBy Capital Under Management 2012*Total includes above 5 states onlyThe correct interpretation of this chart is that at year end 2012, there were 5,887principals (people who go to board meetings) in the industry. A principal on aver-age manages $33.8 million and the average firm is made up of 7.0 principals, downfrom 7.4 principals a year earlier.Fund Total Total Total Firms That Raised Capital Avg Avg FirmsVintage Cumulative Cumulative Cumulative Existing Funds in the Last Managed Fund Size Firm Size ActivelyYear Funds Firms Capital ($B) Funds 8 Vintage Years ($B) ($M) ($M) Investing1985 631 323 20 532 294 17.6 33.1 59.9 921986 707 353 23.4 590 324 20.7 35.1 63.9 1131987 810 388 27.4 670 353 23.7 35.4 67.1 1121988 887 406 30.8 700 365 24.8 35.4 67.9 1181989 979 435 35.8 727 380 27.7 38.1 72.9 1151990 1,037 451 38.3 716 383 28.3 39.5 73.9 1001991 1,075 458 40.5 639 360 26.9 42.1 74.7 801992 1,147 478 44.1 601 352 27.3 45.4 77.6 1041993 1,244 509 49.4 613 370 29.4 48.0 79.5 931994 1,342 542 56.7 635 385 33.3 52.4 86.5 1101995 1,497 607 66.2 687 424 38.9 56.6 91.7 1851996 1,647 668 78.6 760 469 47.8 62.9 101.9 2491997 1,859 760 97.9 880 541 62.1 70.6 114.8 3421998 2,096 839 129.2 1,059 613 90.9 85.8 148.3 4081999 2,433 966 184.1 1,358 733 143.6 105.7 195.9 7132000 2,849 1,109 268.2 1,702 864 224 131.6 259.3 10532001 3,092 1,191 310.4 1,848 920 261 141.2 283.7 7592002 3,174 1,208 318 1,832 918 261.2 142.6 284.5 5342003 3,282 1,260 330 1,785 948 263.8 147.8 278.3 5052004 3,447 1,328 349.4 1,800 984 270.8 150.4 275.2 5752005 3,622 1,398 376.2 1,763 1009 278.2 157.8 275.7 5582006 3,805 1,474 417.9 1,709 1019 288.7 168.9 283.3 5702007 4,019 1,558 447.9 1,586 1010 263.8 166.3 261.2 6272008 4,205 1,621 474.8 1,356 879 206.6 152.4 235 6032009 4,313 1,664 490.7 1,221 818 180.4 147.7 220.5 4622010 4,439 1,725 506.7 1,265 844 188.7 149.2 223.6 5092011 4,599 1,787 531.5 1,317 868 201.5 153.0 232.1 5452012 4,716 1,828 548.6 1,269 841 199.2 157.0 236.9 522Figure 1.04Fund and Firm AnalysisThe correct interpretation of this chart is that since the beginning of the industry to the end of 2012, 1,828 firms had been founded and 4,716 funds hadbeen raised. Those funds totaled $548.6 billion. At the end of 2012, 841 firms as calculated using our eight-year methodology managed 1,269 individualfunds, with each fund typically being a separate limited partnership. Capital under management, again calculated using a rolling eight years of fundrais-ing, by those firms at the end of 2012 was $199.2 billion. However, only 522 independent and corporate venture groups invested at least $5 million inMoneyTree™ deals in 2012.20 Thomson ReutersNational Venture Capital Association
  22. 22. SSttaattee 11998855 11998866 11998877 11998888 11998899 11999900 11999911 11999922 11999933 11999944 11999955 11999966 11999977 11999988CA 4,875 5,836 6,493 6,727 7,987 7,620 7,732 7,728 8,562 9,315 11,524 14,797 19,349 26,799MA 2,331 2,646 3,533 3,886 4,292 4,414 4,070 4,944 5,136 5,645 6,881 7,339 10,436 15,737NY 3,382 4,421 4,369 4,158 5,589 5,810 5,460 5,314 5,911 6,977 8,268 9,952 10,286 19,646CT 1,285 1,432 1,917 1,979 1,821 1,984 1,840 1,937 2,268 2,430 2,282 2,397 3,677 4,684IL 470 490 720 848 804 818 783 886 1,148 1,220 1,361 1,312 1,989 2,245PA 444 518 548 562 731 772 774 770 570 739 822 1,324 1,743 2,100 3DC 3 4 4 3 4 4 4 1 20 20 123 1,670 2,325 2,450TX 454 488 722 720 792 835 773 805 936 1,143 1,145 1,225 1,681 2,994NJ 610 707 746 734 730 950 880 546 512 695 958 1,480 1,557 2,171MD 93 97 123 116 158 163 98 115 374 784 914 1,514 2,004 2,642 3WA 313 406 384 422 395 383 198 241 227 178 299 460 677 1,078VA 72 78 78 84 104 91 56 42 35 32 48 73 251 506MN 198 294 338 672 743 882 810 764 842 896 877 511 616 713NC 34 54 87 89 124 113 109 110 108 146 128 298 618 804 1,007 1,36CO 361 428 396 513 613 572 554 528 617 566 475 549 863 1,162MO 557 581 614 591 599 655 653 642 107 137 119 124 147 111UT 9 19 19 15 15 16 15 10 10 25 31 31 94 96MI 111 119 125 122 123 38 14 14 13 10 41 41 66 76FL 124 131 172 192 194 132 110 97 151 223 321 303 378 688TN 102 127 191 183 215 259 276 270 200 292 306 453 463 743GA 88 94 175 257 261 275 262 262 434 432 434 359 762 1,074DE 39 40 40 38 47 41 41 14 41 51 100 121 114 116OH 852 889 969 831 254 257 273 303 427 470 447 375 689 764AL 125 131 131 127 134 136 136 137 6 6 6 6 5 24IN 45 55 56 77 96 88 80 96 99 109 111 192 176 191AZ 40 43 43 73 74 75 75 34 44 43 44 10 9 38LA 7 7 7 7 7 5 2 11 22 31 49 89 275 366KY 15 16 16 16 0 0 0 0 0 7 21 21 21 21WI 181 99 98 95 104 104 78 78 81 163 168 195 180 204 1NM 71 100 135 132 168 255 243 230 205 179 154 151 120 12ID 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1ME 1 1 20 25 26 26 26 28 29 98 89 86 88 89OK 1 29 29 28 37 38 37 37 38 9 10 32 23 67SD 0 0 0 0 0 0 0 0 0 0 0 10 10 85HI 2 2 2 2 2 2 2 0 0 0 2 2 2 2 1IA 49 51 104 101 80 82 61 62 54 55 5 5 16 17OR 168 176 203 239 242 246 228 116 74 74 77 30 30 40VT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1NH 24 25 25 49 50 51 50 50 27 27 47 19 66 67ND 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1KS 0 0 0 0 0 13 13 13 14 14 37 37 56 43SC 1 1 1 1 15 15 15 15 15 15 29 52 37 37NE 0 0 0 1 1 1 1 1 11 11 105 136 138 141MS 0 0 0 0 0 0 0 0 0 0 11 11 11 11PR 0 0 0 0 0 9 9 9 9 9 9 9 49 40WY 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1RI 15 16 16 36 36 37 36 36 22 22 23 0 2 2 2 2 2NV 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2WV 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2AR 2 2 2 2 2 2 2 0 0 0 0 0 0 0 1MT 0 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0UN 46 48 48 46 31 31 21 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0AK 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0TToottaall 1177,,660000 2200,,770000 2233,,770000 2244,,880000 2277,,770000 2288,,330000 2266,,990000 2277,,330000 2299,,440000 3333,,330000 3388,,990000 4477,,880000 6622,,110000 9900,,99000022000000 22000011 22000022 22000033 22000044 22000055 22000066 22000077 22000088 22000099 22001100 22001111 2200112283,652 102,032 102,065 105,008 110,920 116,533 125,205 113,611 97,099 85,072 88,085 93,952 93,81538,137 47,762 49,004 48,678 49,187 50,675 55,598 52,312 38,586 32,397 32,001 31,836 34,48238,221 39,225 37,658 37,086 36,655 36,182 29,295 25,621 14,104 13,156 18,116 22,380 21,3788,913 11,878 11,710 11,682 13,333 13,525 14,879 13,251 12,165 8,498 9,263 10,076 8,0514,393 4,805 5,258 5,616 5,690 5,168 5,289 4,235 3,590 3,278 3,060 4,564 4,3696,233 6,338 6,231 6,523 6,100 6,506 7,033 7,063 4,564 4,399 4,408 4,123 4,1833,847 4,122 4,686 4,584 3,373 3,582 4,640 5,046 4,835 4,631 4,043 4,510 4,1656,871 7,994 7,922 7,799 8,259 8,448 8,203 6,550 5,431 4,203 4,061 4,164 3,8383,628 4,311 4,226 4,440 4,083 4,073 5,159 5,021 4,137 3,916 3,959 3,554 3,3555,112 5,378 5,159 5,043 4,811 4,762 4,743 4,432 2,936 3,005 2,912 2,891 3,0102,799 3,684 3,687 3,566 4,630 4,591 4,597 5,173 4,627 3,720 3,684 3,693 2,7492,520 2,636 2,649 2,819 2,868 3,338 3,367 3,013 1,802 2,225 2,267 2,073 1,9992,235 2,187 2,363 2,357 2,361 2,441 2,593 2,472 1,640 1,657 1,317 1,763 1,862N 1,365 1,446 1,577 1,776 1,618 1,447 1,657 1,542 1,190 1,216 1,696 1,614 1,6334,775 5,288 5,432 5,412 5,229 4,882 4,663 3,010 1,604 974 1,137 1,144 1,399307 449 417 407 504 1,232 1,293 1,384 1,318 1,182 1,187 1,188 1,315268 475 448 559 589 546 651 1,251 1,328 1,136 1,199 1,314 1,296587 591 589 631 859 912 946 685 919 976 1,051 1,244 1,0221,782 1,749 1,682 1,591 1,577 1,802 1,525 1,283 558 801 864 819 8181,235 1,280 1,161 1,150 1,043 1,089 840 669 576 565 775 802 7632,308 2,158 2,151 2,075 2,109 1,835 1,697 1,686 558 530 533 646 605113 80 69 28 15 15 15 251 256 394 396 445 544O 1,847 1,872 1,873 1,853 1,986 1,805 1,721 1,329 714 565 521 570 439107 107 107 155 173 225 224 216 357 361 362 387 369662 662 650 683 593 595 608 617 136 342 343 308 335101 104 145 180 180 199 171 173 130 118 263 260 309476 651 648 631 663 502 430 353 336 196 263 279 21421 21 14 14 14 18 216 218 223 225 226 212 212W 245 245 152 152 133 105 205 213 141 143 170 194 19912 12 12 33 35 69 74 77 79 80 114 84 8214 14 14 14 14 14 84 85 72 73 73 73 73202 290 218 219 214 215 276 160 164 73 73 69 69140 139 139 139 117 117 111 121 47 47 47 47 48178 177 177 177 175 175 103 113 32 32 48 48 4011 11 11 9 16 16 16 7 14 14 43 43 3616 60 60 55 65 53 60 67 69 39 39 39 29100 100 112 83 85 85 76 78 34 40 29 29 2716 43 43 43 43 43 43 57 41 14 19 19 1965 65 84 65 65 19 30 30 31 31 11 11 160 0 0 0 0 0 0 0 13 13 14 14 1442 42 42 19 19 0 0 0 0 0 8 8 8S 36 37 71 58 35 41 41 41 42 41 5 5 5N 175 164 164 71 38 38 38 38 0 0 2 2 3M 11 39 39 28 28 28 29 30 30 1 1 1 1P 39 68 68 68 68 29 29 30 31 1 1 1 1W 117 117 117 117 117 118 118 119 0 0 0 0 0R 2 26 26 35 35 33 33 33 34 10 10 0 0N 23 23 32 32 33 33 33 9 10 10 0 0 0W 21 21 21 21 21 21 21 21 0 0 0 0 0A 19 19 19 19 19 19 19 0 0 0 0 0 0M 0 0 0 0 0 0 0 0 0 0 0 0 0U 0 0 0 0 0 0 0 0 0 0 0 0 0A 0 0 0 0 0 0 0 0 0 0 0 0 0T 222244,,0000 226611,,330000 226611,,220000 226633,,880000 227700,,880000 227788,,220000 228888,,770000 226633,,880000 220066,,660000 118800,,440000 118888,,770000 220011,,550000 119999,,220000Figure 1.07Capital Under Management By State 1985 to 2012 ($ Millions)Thomson Reuters 212013 NVCA Yearbook
  23. 23. Life of IT Funds % ofIn Years Funds<= 10 7%11-12 20%13-14 27%15-16 22%17-18 14%>=19 10%Figure 1.08Life of IT Funds in YearsSource: Adams Street Partners, based on 2010 analysis of dissolved funds.This chart tracks the year in which a 10-year fund is, in fact, dissolved.These later periods are referred to as “out years.” Historically, after the 10th year, only a few companies remain in the portfolios that typically do not havehuge upside potential. But the slow pace of exits in recent years has resulted in a number of good, mature companies remaining in portfolios well pastthe nominal 10-year mark. Life science funds tend to have lives two years longer than typical technology funds. In preparing this chart, partial years arerounded to the nearest whole year. So 10.4 years would round to 10 years, and 10.5 years would round up to 11 years. The median life span of a fund inthis analysis is 14.17 years.National Venture Capital Association22 Thomson Reuters
  24. 24. Capital CommitmentsMethodologyAs defined by Thomson Reuters, capital commitments,also known as fundraising, are firm capital commit-ments to private equity/venture capital limited partner-ships by outside investors. For purposes of these statis-tics, the terms “capital commitments,” “fundraising,”and “fund closes” are used interchangeably. There arethree data sources for tracking capital commitments:(1) SEC filings that are regularly monitored by ourresearch staff, (2) surveys of the industry routinely con-ducted by Thomson Reuters, and (3) verified industrypress and press releases from venture firms.Capital commitments are stated on either (1) a calen-dar-year basis when committed (for example, through-out this chapter) or (2) a vintage-year basis which isdesignated once the fund starts investing (for example,figure 1.04). The data in this chapter is by calendaryear and incrementally measures how much in newcommitments funds raised during the calendar year.Consider, for example, a venture capital firm thatannounces a $200 million fund in late 2010, raises$75 million in 2011, and subsequently raises theremaining $125 million in 2012. In this chapter, noth-ing would be reflected in 2010, $75 million would becounted in 2011, and $125 million would be countedin 2012. Assuming it started investing and made itsfirst capital call in 2012, the entire fund would then beconsidered to be a 2012 vintage year fund.Note that fund commitments presented in this publica-tion do not include those corporate captive venture cap-ital funds that are funded by a corporate parent, whichdo not typically raise capital from outside investors.New commitments to venture capital funds in the United States increased for the second year in a row, whichfollows four years of declines. In 2012, commitments totaling $20.1 billion were made to 183 funds. This isroughly two-thirds of the annual levels seen in 2005-2007 and approximately one-fifth of the annual amountraised at the bubble peak.When you look behind the 2012 capital commitments at the specific funds being raised, the 10 largest fundsrepresent 48% of the capital raised, with 173 funds raising the other 52%.This is the sixth consecutive year in which more money was invested by the industry than raised in new com-mitments. That has been the case in 11 of the past 13 years. While this is not a true apples-to-apples compar-ison, it does explain the industry’s strong interest in raising additional funds in 2013 and beyond. The narrowsuccess of recent IPO and acquisition markets has not enabled most firms to pay out sufficient distributions totheir investors to begin raising another fund. For the vast majority of firms, raising additional capital right nowis very difficult.For the seventh year in a row, the top fundraising states were California and Massachusetts. This year,Connecticut replaces New York in the third position. California, with its venture firms raising $13.7 billion,holds the top spot for the tenth year in a row. Firms domiciled in the top five fundraising states in 2012 gath-ered 88% of the dollars, compared with 91% in 2011, 88% in 2010 and 82% in 2009.Please note that the state of fund domicile matters less than has been true historically. Much of the money ismanaged by large, national funds that tend to be domiciled in any of several states with a broad geographicinvesting footprint. Readers should not interpret capital available to entrepreneurs in a given state as beinglimited to the capital raised in that state.Venture capital fundraising typically makes up 20-25% of private equity fundraising. But in 2012, it represent-ed 16% of total, down from 22% in 2011.Thomson Reuters 23
  25. 25. National Venture Capital Association24 Thomson ReutersYear Sum ($Mil) % of Total PENo.Funds Sum ($Mil) No. Funds Sum ($Mil)No.Funds1985 3,727.9 56% 116 2,971.8 21 6,699.7 1371986 3,584.5 42% 101 5,043.7 32 8,628.2 1331987 4,379.1 21% 116 16,234.6 47 20,613.6 1631988 4,209.7 28% 104 10,946.4 54 15,156.1 1581989 4,918.8 29% 106 12,068.5 78 16,987.3 1841990 3,222.7 27% 86 8,831.5 64 12,054.3 1501991 1,900.3 31% 40 4,242.1 27 6,142.4 671992 5,223.1 33% 80 10,752.5 58 15,975.6 1381993 4,489.2 21% 93 16,961.7 81 21,451.0 1741994 7,636.7 27% 136 20,457.0 100 28,093.7 2361995 9,387.3 26% 161 27,040.7 108 36,428.0 2691996 11,550.0 26% 168 32,981.4 104 44,531.3 2721997 17,741.9 29% 242 42,803.0 136 60,544.9 3781998 30,641.7 33% 290 62,023.7 173 92,665.4 4631999 53,597.8 50% 430 53,720.7 166 107,318.5 5962000 101,417.9 56% 634 80,614.8 171 182,032.7 8052001 38,923.4 43% 324 52,523.0 137 91,446.4 4612002 11,867.3 25% 202 35,076.8 124 46,944.0 3262003 10,586.7 23% 161 35,913.4 121 46,500.1 2822004 18,137.1 23% 212 59,878.5 158 78,015.6 3702005 30,627.3 22% 234 108,249.8 205 138,877.1 4392006 31,371.7 17% 236 152,566.2 216 183,937.9 4522007 29,378.1 11% 235 243,264.2 264 272,642.3 4992008 25,577.2 12% 215 180,923.9 231 206,501.1 4462009 16,194.4 25% 162 49,871.5 148 66,065.9 3102010 13,519.8 21% 175 51,674.8 173 65,194.6 3482011 19,296.2 22% 188 70,103.5 207 89,399.6 3952012 20,065.9 16% 183 106,249.9 217 126,315.7 400Venture Capital Buyouts and Mezzanine Capital Total Private EquityFigure 2.02Capital Commitments To Private Equity Funds 1985-20120204060801001201985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)YearFigure 2.01Capital CommitmentsTo U.S. Venture Funds ($ Billions)1985 to 2012
  26. 26. 2013 NVCA YearbookThomson Reuters 25State 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012CA 1,250 969 1,159 936 1,519 831 549 1,311 1,333 1,764 3,107 3,724 5,463 8,456 21,891 43,485MA 534 356 973 582 339 675 180 1,051 368 1,158 1,955 1,871 2,602 5,176 7,659 16,692CT 282 156 420 352 66 290 150 300 473 388 260 425 1,324 1,068 2,843 2,313 4NY 202 1,460 547 279 2,260 490 474 494 940 1,860 2,364 1,516 3,609 9,346 8,945 15,400NC 7 7 31 23 38 1 0 0 0 63 10 184 349 174 180 613WA 25 126 37 60 0 0 5 48 40 37 129 239 180 409 640 1,175CO 32 71 32 70 80 0 0 0 114 0 19 216 253 433 1,942 2,414TN 20 23 73 0 34 0 0 40 0 116 84 149 109 266 267 262FL 10 0 36 11 29 0 35 0 59 105 106 0 78 250 326 955PA 54 73 55 12 118 45 167 30 110 182 114 264 784 177 1,241 2,751UT 0 11 1 0 0 0 0 0 0 27 0 0 17 50 62 126MO 644 0 33 0 0 53 0 0 64 0 11 6 45 25 80 65MN 14 110 51 418 20 162 16 946 66 164 7 36 208 217 107 1,827IL 51 47 325 158 26 57 94 247 278 183 230 295 575 466 1,304 964 1,10NJ 254 61 120 0 125 243 75 110 177 401 213 606 118 1,002 570 1,041 6AZ 0 0 0 37 0 0 0 0 10 0 0 0 0 0 29 60VA 0 4 10 13 15 2 0 17 5 0 7 20 165 226 884 2,212 1WI 0 0 0 0 0 0 0 0 0 40 0 31 30 0 17 66IN 0 10 0 27 16 5 0 49 0 20 0 116 0 13 20 103OH 3 0 87 75 0 30 0 67 4 86 10 0 358 58 659 662TX 37 33 231 41 161 143 50 381 137 283 179 326 394 1,330 1,803 3,615MI 5 0 7 33 0 0 0 0 3 14 0 26 11 0 321 241MD 4 7 24 0 49 14 50 0 225 479 67 439 145 768 840 1,990AL 150 0 0 0 0 0 0 0 0 0 0 0 5 30 0 137GA 0 0 15 65 0 14 0 0 56 0 74 34 41 181 30 918NH 49 0 0 40 0 0 15 0 0 0 20 0 50 0 0 0 0 1NE 0 0 0 0 0 0 0 0 0 0 111 36 0 0 0 41DE 39 0 0 5 0 0 0 0 0 0 130 820 668 392 360 778ND 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1OK 0 32 0 0 10 0 0 0 0 0 0 24 0 45 0 110 0 0 0 0 1AR 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20DC 0 0 0 0 0 0 0 0 0 25 31 65 0 0 28 0HI 0 0 0 0 0 0 0 0 0 0 3 0 0 0 10 0ID 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15IA 11 0 60 0 0 0 0 56 0 0 5 0 11 2 5 21KS 0 0 0 0 0 0 0 0 0 0 0 0 20 0 0 0 0 0 0 0 0 0 1KY 0 0 0 0 0 0 0 0 14 7 15 0 42 0 0 0 1LA 0 0 0 0 0 0 0 11 14 169 18 24 88 51 373 70ME 0 0 22 948 0 0 0 2 0 59 0 22 0 0 127 0MS 0 0 0 0 0 0 0 0 0 0 12 0 0 0 0 30NV 0 0 0 0 0 0 0 0 0 0 50 25 0 0 25 0NM 36 28 0 2 0 155 40 0 0 6 2 0 0 0 0 0 0 0 1OR 0 0 30 0 0 0 0 0 0 0 32 0 0 10 0 65PR 0 0 0 0 0 10 0 0 0 0 0 0 0 0 0 0 3RI 17 0 0 25 0 0 0 0 0 0 0 0 0 0 0 0 2SC 0 0 0 0 13 5 0 0 0 0 14 0 0 0 0 0 0 3SD 0 0 0 0 0 0 0 0 0 0 0 11 0 22 14 131VT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20WV 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 4 1WY 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 26Total 3,728 3,584 4,379 4,210 4,919 3,223 1,900 5,161 4,489 7,637 9,387 11,550 17,742 30,642 53,598 101,4182001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012C 13,452 154 4,830 8,645 12,869 13,621 12,016 14,053 8,635 6,337 9,790 13,6659,783 1,397 1,597 1,485 9,151 4,366 5,122 2,486 3,574 2,779 2,503 1,4104,164 24 165 1,926 1,143 3,136 904 766 158 1,035 149 1,3882,986 7,704 1,233 2,149 1,736 2,512 4,310 1,826 1,652 1,259 4,096 758105 55 237 17 108 401 185 103 5 456 130 472888 43 1 955 281 563 1,376 492 5 0 0 399513 118 94 84 69 132 358 221 3 262 6 280T 82 22 101 16 84 62 100 134 89 42 161 27826 8 56 1 313 10 109 25 32 75 2 268537 54 388 451 688 794 746 963 233 205 126 183232 0 34 40 24 170 213 569 33 16 160 159286 0 0 80 829 40 210 54 0 72 0 15517 276 26 50 295 473 275 325 22 0 0 1501,103 478 657 432 80 422 545 258 216 238 215 120652 392 561 197 204 1,812 235 53 504 112 100 6321 43 41 0 19 0 0 20 0 0 222 54119 37 196 72 419 555 582 105 14 121 36 4514 0 0 11 0 78 102 15 9 27 0 400 10 36 17 6 24 1 29 1 28 0 39330 102 5 210 558 152 81 83 4 30 79 322,232 106 76 589 570 314 316 1,038 78 83 210 318 0 65 63 122 23 49 256 84 177 192 20340 381 105 162 433 472 783 369 484 68 544 1916 11 49 19 70 19 0 118 101 2 58 1919 0 0 55 104 103 203 19 31 31 26 130 11 9 0 0 5 7 0 0 0 0 5N 0 0 0 0 0 0 0 0 0 2 0 1D 622 315 0 299 393 896 315 1,123 204 0 475 00 0 0 0 0 0 0 13 0 0 0 0O 0 0 0 0 12 38 11 0 0 0 0 0A 0 0 0 0 0 0 0 0 0 0 0 0D 0 22 0 10 0 0 0 0 0 0 0 0H 0 3 0 8 0 0 0 6 0 0 0 0I 27 0 0 0 0 0 75 0 0 0 0 0I 26 0 0 10 0 43 0 0 15 0 0 0K 0 0 0 0 0 0 10 20 0 0 8 0K 135 8 2 0 5 65 98 12 0 0 0 0L 27 8 0 73 4 12 0 0 0 0 0 0M 76 16 3 0 0 46 19 0 0 0 6 0M 0 0 0 0 0 1 0 0 0 0 0 0N 0 10 0 0 0 0 0 0 0 0 0 0N 0 0 18 4 34 5 7 0 0 35 1 0O 0 14 0 2 0 0 2 5 6 12 2 0P 31 0 0 0 0 0 1 0 0 0 0 0R 25 0 0 0 0 0 0 0 0 0 0 0S 0 35 2 0 6 0 0 0 0 0 0 0S 1 0 0 5 0 3 0 14 0 16 0 0V 25 0 0 0 0 0 11 3 0 0 0 0W 4 13 0 0 0 0 0 0 0 0 0 0W 0 0 0 0 0 0 0 0 0 0 0 0T 38,923 11,867 10,587 18,137 30,627 31,372 29,378 25,577 16,194 13,520 19,296 20,066Figure 2.03Venture Capital Fund Commitments1985 to 2012 ($ Millions)
  27. 27. National Venture Capital Association26 Thomson Reuters-204060801001201401601802002202402602801985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)YearVenture Capital Buyout and Mezzannine CapitalFigure 2.05Private EquityAnnual Commitment ($ Billions)1985 to 2012NNoo.. ooff CCoommmmiitttteeddSSttaattee FFuunnddss (($$MMiill))California 64 13,665.3Massachusetts 17 1,409.7Connecticut 4 1,388.0New York 21 757.7North Carolina 5 472.0SSuubb--TToottaall 111111 1177,,669922..77RReemmaaiinniinngg SSttaatteess 72 2,373.1TToottaall 118833 2200,,006655..99Figure 2.04Top 5 StatesBy Venture Capital Committed 2012
  28. 28. InvestmentsSectorsSoftware was the leading sector in 2012, receiving 31%of the total dollars. The second largest sector wasBiotechnology which fell to roughly half that amount at15.4% of total investment The continued interest inClean Technology investing brought the Industrial/-Energy sector to 10.5% of the total. Medical Devicesrounded out the top four sectors at 9.4%.The life sciences share of the venture capital invest-ment dollars decreased in 2012 to its lowest levelsince 2002. In 2012, 15.4% of the money went intoBiotechnology, 9.4% into Medical Devices, and 1.2%into Healthcare Services, totaling 26.0%. This isdown from the 33.1% combined share in 2009.This recent downward life sciences trend is very visi-ble when just looking at first fundings. In 2012, only149 life science (the three sectors combined) compa-nies received first funding. This is 12.7% of the total.As recently as 2006, the 294 first fundings of life sci-ence companies made up 23.0% of total first fundings.Among first fundings, Software led the way with 441companies getting their initial venture capital rounds.This is more than one-third of the total number of firstfundings. The nearest sector to Software was Mediaand Entertainment with 174 first fundings.Stages and First-Time FundingsSeed stage companies received 3% of total dollars in2012, with early stage, expansion, and later stagecompanies roughly splitting the remaining share.More than one-third of the capital went to expansion-stage companies. But it is worth looking more close-ly at those statistics.As has been the case for several years, attention hasbeen focused on the two ends of the spectrum.Looking at deal counts, 2012 actually saw the highestpercentage of seed- and early-stage deals since at least1985 (51.8% of total deals). This certainly wouldchallenge the suggestion that the industry’s attentionis single-focused on later-stage companies. That said,the 22.4% of deals going to later-stage companies isalso toward the top end of the historical range. Thereremains a record number of companies in portfoliosin the later stage of development that in most otherpositions in the business cycle would have alreadygone public or otherwise been acquired.With the rule of thumb that a healthy venture capitalindustry invests in 1,000-1,300 new companies eachyear, the 1,174 first fundings in 2012 is very much inthat range. Not surprisingly, 81% of those first roundinvestments were made at the seed and early stage.Geographical Spread Across the UnitedStatesThe year 2012 provided an interesting contrast in geo-graphic dispersion. While 53% of all the investmentdollars went to California-based portfolio companies,a record for MoneyTree™, companies in 48 states andDC received financing, also a MoneyTree™ recordhigh. That said, the five largest states (California,Massachusetts, New York, Washington and Texas)received 78% of all the dollars invested nationally.This compares to 2011, when California companiesreceived a then-record 51.2% of the dollars. That year,companies in a record 47 states and DC received ven-ture capital funding. Together, the top five states(California, Massachusetts, New York, Texas, andIllinois) received 77% of the total dollars.Measuring industry activity with the total dollars invested in a given year shows that the industryhas remained generally in the $20 billion to $30 billion range since 2002. In 2012, $26.7 billion wasinvested in 3,143 companies. This is less than 2011 totals and greater than 2010 totals. The numberof first-time fundings likewise was less than 2011 and greater than 2010. Further parsing the datashows an increasing portion of the investment dollars going to California companies.Thomson Reuters 27
  29. 29. California-domiciled venture capital firms madeinvestments in 39 states in 2012. Approximately 49%of all the money invested in California came fromCalifornia-domiciled firms. Conversely, California-based firms concentrated 71% of their investmentpower within the state.Corporate Venture Group InvolvementThe number and reach of corporate venture capitalgroups increased in 2012. These groups provided8.2% of the venture capital invested by all venturegroups. They were involved in 15.2% of the deals -the highest level in four years. Going forward, allsigns suggest that these groups are becoming moreinvolved alongside traditional venture firms in deals,as well as initiating corporate venture group syndi-cates to do deals in lieu of, or in advance of, invest-ment rounds by traditional venture firms.MethodologyAs calculated by Thomson Reuters, venture capitalinvestment data are derived from several sources.Primarily, survey information is obtained from thequarterly survey that drives the MoneyTree Report™from PricewaterhouseCoopers and the NationalVenture Capital Association based on data fromThomson Reuters. This is the official industry databaseof venture capital investment. Secondly, ThomsonReuters obtains data from SEC filings that are regular-ly monitored by our research staff. Finally, publiclyavailable sources such as press releases and trade pub-lications are used.For detailed information on which transactions quali-fy as MoneyTree deals and are therefore counted inthis chapter, please refer to Appendix B.National Venture Capital Association28 Thomson Reuters
  30. 30. 2013 NVCA YearbookThomson Reuters 29AmtState # Companies # Deals Invested ($Bil)California 1,280 1,532 14.1Massachusetts 326 414 3.1New York 287 331 1.9Washington 101 117 0.9Texas 134 159 0.9Total* 2,128 2,553 20.9Figure 3.03Venture Capital InvestmentsTop 5 States in 2012Investment InvestmentIndustry Group # Companies # Deals Amt ($Bil) # Companies # Deals Amt ($Bil)Information Technology 2,130 2,480 16.5 870 870 3.0Medical/Health/Life Science 649 818 6.8 148 148 0.7Non-High Technology 364 425 3.4 156 156 0.4Total 3,143 3,723 26.7 1,174 1,174 4.1All Investments Initial Investments020406080100120 1985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012($Billions)YearFigure 3.02Venture Capital Investments in 2012By Industry GroupFigure 3.01Venture Capital Investments ($ Billions)1985 to 2012*Total includes top 5 states only
  31. 31. National Venture Capital Association30 Thomson ReutersBusiness Productsand Services 0.4%Computers andPeripherals 2%Consumer Productsand Services 5%Electronics/Instrumentation 1%Biotechnology15%Financial Services 1%Healthcare Services 1%Industrial/Energy 10%IT Services 7%Media andEntertainment 7%Medical Devicesand Equipment 9%Networking andEquipment 1%Retailing/Distribution 2%Semiconductors3%Telecommunications 2%Software 31%Other0.2%Figure 3.04Venture Capital Investments in 2012Industry Sector by Dollars InvestedSeed 3%Early Stage 30%Expansion 35%Later Stage 32%Figure 3.05Venture Capital Investments in 2012Stage By Dollars Invested
  32. 32. 2013 NVCA YearbookThomson Reuters 31ARNEWY8AL56CO5DE38GA2HI15KSMA57MD33MN12MO2MS1MT2ND12NH12NM44OH94TX31UT5VT9WI250AKARNEWY43AL111AZ468CO18DE302GA7HI84IA15ID8KS277MD263MN24MO0MS15MT7ND7NM15NV101OR645TX178UT574WA23WIFigure 3.06Amount of Capital Invested By State in 2012($ Millions)Figure 3.07Number of Companies Invested in By State in 20126MT15ID WY564CO304UT7NV14,129CA212AZ35NM931TX2ND0SD11NE46KS34OK243MN95WI 232MI1,857NY4VT61NH13ME3,068 MA85 RI158 CT429 NJ9 DE280 MD169 NC87 TN10MS23AL265GA203FLPRVIGU5IA570IL84IN286OH372 VA15VW23KY21MO5AR11LA1HIAKAK24OR3MT1ND26MN4ID1SD1,280CA4NV37UT85CO5NE9KS1IA12WI 41MI8MO76IL14IN51OH5KY30 TN154PA62VA5ME8NH4VT287NY25DC1AR7OK134TX3HI4LA3MS6AL44GA31FL1 PRVIGU12NM13AZWY518PA6 DC39SC5SC50MD6DE49 NJ38 CT12 RI326 MA2WV33 NC932WA124OR101WA
  33. 33. National Venture Capital Association32 Thomson ReutersRReeggiioonn 11998855 11998866 11998877 11998888 11998899 11999900 11999911 11999922 11999933 11999944 11999955 11999966SiliconValley 758.8 1,016.3 849.9 985.9 916.5 914.1 780.5 1,119.5 903.2 1,074.4 1,807.8 3,417.7NewEngland 435.4 436.6 525.1 496.9 404.7 425.0 287.0 417.0 358.4 440.4 796.6 1,159.4NYMetro 221.2 211.0 273.9 308.0 360.4 190.1 181.5 239.0 222.3 283.3 509.7 743.2LA/OrangeCounty 196.5 186.9 276.9 222.5 242.1 174.7 119.4 179.4 176.4 198.4 1,004.1 702.9Midwest 157.5 139.9 198.4 132.3 183.2 155.9 181.4 165.2 276.9 432.6 470.3 743.3SanDiego 99.6 95.4 107.8 149.8 145.5 113.3 115.7 111.2 133.0 220.5 276.8 485.2Northwest 142.2 142.9 153.3 141.2 118.0 88.2 59.9 252.1 118.4 165.7 379.7 557.6Texas 249.0 228.4 211.0 240.7 228.3 141.0 161.4 149.6 240.7 311.8 479.2 553.4Southeast 166.4 234.2 271.0 266.5 224.4 145.9 109.4 346.6 405.8 362.3 876.6 1,165.0DC/Metroplex 99.1 61.1 111.8 129.9 139.5 96.9 51.3 65.8 384.1 137.8 420.2 586.3Colorado 77.0 113.8 111.4 107.8 157.8 93.7 54.2 129.7 135.0 197.4 325.1 321.2SouthWest 40.1 82.5 57.5 59.7 50.7 30.3 49.0 98.4 49.7 38.0 113.1 184.6PhiladelphiaMetro 52.6 63.3 79.2 71.8 65.3 105.9 34.7 168.9 108.3 137.6 220.9 349.9NorthCentral 37.0 44.5 73.6 41.6 51.2 92.2 44.9 89.1 109.6 87.4 223.8 208.5SouthCentral 13.7 11.4 19.8 11.7 14.5 11.6 4.2 6.5 8.6 15.2 45.2 81.1UpstateNY 14.2 10.7 10.2 5.3 7.3 11.1 3.4 9.1 5.7 0.7 35.5 22.7Unknown - - 0.5 0.8 6.1 13.0 0.2 30.8 0.8 0.1 0.3 2.2Sacramento/N.Cal 16.0 45.5 32.0 33.6 4.2 19.5 15.7 8.5 19.1 20.0 20.0 28.6AK/HI/PR - - - - - - 0.3 0.0 1.0 22.0 7.8 28.7TToottaall 22,,777766..44 33,,112244..55 33,,336633..66 33,,440066..00 33,,331199..66 22,,882222..44 22,,225544..00 33,,558866..33 33,,665566..88 44,,115577..66 88,,001122..66 1111,,334411..5511999977 11999988 11999999 22000000 22000011 22000022 22000033 22000044 22000055 22000066 22000077 22000088 220000994,632.3 5,878.3 17,801.6 33,452.0 12,599.3 7,242.9 6,755.6 7,999.3 8,116.3 9,816.8 11,554.7 11,436.4 8,220.51,606.7 2,353.4 5,641.6 12,019.9 5,431.2 2,992.3 2,990.4 3,345.5 2,967.1 3,310.8 3,964.5 3,788.3 2,577.61,289.4 1,817.6 4,532.3 10,300.4 3,512.8 1,569.4 1,422.0 1,648.2 1,998.5 2,185.5 1,902.8 2,148.7 1,737.3875.2 1,250.6 3,596.9 6,808.1 2,285.8 1,286.8 1,069.4 1,319.8 1,506.1 1,902.7 1,906.3 2,041.1 1,060.1919.6 1,653.5 2,729.2 5,776.7 2,182.4 976.9 913.6 712.5 918.0 1,010.1 1,167.9 1,364.6 952.8516.0 669.1 1,429.5 2,302.3 1,579.1 996.2 825.8 1,197.8 1,203.9 1,223.6 1,844.4 1,209.4 949.0564.4 820.3 2,877.6 3,603.4 1,426.8 746.4 643.5 993.3 1,011.3 1,318.2 1,636.2 1,134.7 678.7908.7 1,205.6 3,162.7 6,262.9 3,104.3 1,187.6 1,221.0 1,215.1 1,189.4 1,519.7 1,496.9 1,122.6 665.51,366.1 1,794.8 4,831.0 7,976.1 2,684.7 1,772.7 1,117.9 1,439.2 1,101.3 1,228.2 1,812.4 1,389.3 1,045.0515.1 1,148.5 2,395.1 5,785.3 2,103.1 1,095.6 794.6 1,086.6 1,220.4 1,361.6 1,443.5 1,145.8 678.4405.0 838.9 1,845.8 4,091.9 1,244.4 588.0 644.8 363.2 653.4 688.8 686.3 872.3 623.2303.1 411.2 843.1 1,387.5 515.1 393.8 220.5 393.6 524.8 526.6 577.7 490.1 277.5534.2 703.9 1,732.6 2,591.5 1,073.3 607.8 555.1 768.4 597.8 845.5 953.6 861.9 433.7341.6 429.6 770.0 1,426.7 669.4 431.5 268.5 464.1 367.0 382.1 535.7 644.6 400.367.4 196.7 360.1 446.9 110.4 69.3 65.5 130.1 96.1 64.3 152.8 91.3 25.090.3 195.4 212.4 293.9 159.1 104.5 122.7 104.8 60.1 156.2 136.5 92.3 26.94.4 39.1 2.4 50.4 14.3 - - - - - - - 0.521.4 86.8 119.1 375.3 203.0 65.4 32.2 38.4 37.7 29.4 82.0 71.3 18.814.0 5.5 17.4 248.6 69.8 4.9 17.9 15.1 43.3 47.1 20.9 21.3 7.41144,,997744..99 2211,,448899..99 5544,,990000..33 110055,,220000..00 4400,,996688..33 2222,,113322..33 1199,,668811..11 2233,,223355..11 2233,,661122..55 2277,,661177..22 3311,,887711..55 2299,,992255..99 2200,,337788..3322001100 22001111 220011229,302.8 11,656.8 10,907.42,604.3 3,318.1 3,237.41,886.2 2,859.8 2,334.61,704.5 2,080.4 2,067.21,340.0 1,769.2 1,386.7896.9 926.6 1,116.7774.9 796.6 1,076.01,070.9 1,580.2 930.51,109.4 1,210.2 796.2967.2 987.2 727.4447.9 615.7 564.2263.8 543.1 558.4444.7 458.9 399.0343.3 392.5 355.877.7 106.2 95.744.8 106.7 48.7- - 29.522.5 88.3 20.114.0 0.6 0.72233,,331155..77 2299,,449977..22 2266,,665522..44Figure 3.08Venture Capital Investments in 1985 to 2012By Region ($ Millions)RReeggiioonn 11998855 11998866 11998877 11998888 11998899 11999900 11999911 11999922 11999933 11999944 11999955 11999966 11999977 11999988SiliconValley 323 340 343 362 394 398 337 421 316 336 509 771 867 1,043NewEngland 235 214 257 231 222 217 170 159 149 146 232 333 383 469NYMetro 89 100 131 108 121 90 89 81 80 85 135 158 240 274Midwest 98 116 133 101 127 103 99 93 85 83 132 192 239 250LA/OrangeCounty 90 101 114 106 112 97 89 97 63 55 92 134 166 217Southeast 91 117 134 115 113 130 112 108 117 112 181 226 294 308DC/Metroplex 45 45 65 59 51 62 54 48 41 47 72 113 135 162Texas 106 93 106 105 91 85 70 70 71 69 101 135 172 197Northwest 47 49 62 70 64 48 41 50 49 50 84 112 134 132PhiladelphiaMetro 38 35 54 44 41 48 43 65 47 46 78 91 142 138SanDiego 43 35 54 56 56 47 43 46 49 61 77 109 100 123Colorado 43 58 62 63 53 49 35 53 48 53 58 83 98 127SouthWest 20 30 42 26 32 22 30 34 30 29 37 55 71 88NorthCentral 37 50 54 52 39 44 40 39 38 37 70 69 116 106UpstateNY 17 10 10 10 12 6 4 9 10 5 8 9 21 31SouthCentral 11 10 12 6 7 5 4 5 6 9 15 22 25 27Sacramento/N.Cal 11 18 12 10 6 10 9 9 8 10 7 9 7 17AK/HI/PR 1 - - - - - 3 3 1 2 4 9 6 5Unknown - - 1 2 3 1 1 2 4 2 2 7 7 14TToottaall 11,,334455 11,,442211 11,,664466 11,,552266 11,,554444 11,,446622 11,,227733 11,,339922 11,,221122 11,,223377 11,,889944 22,,663377 33,,222233 33,,77228811999999 22000000 22000011 22000022 22000033 22000044 22000055 22000066 22000077 22000088 22000099 22001100 22001111 220011221,685 2,159 1,103 817 874 958 1,006 1,236 1,305 1,290 990 1,092 1,248 1,160663 904 597 457 446 427 440 458 521 510 387 411 448 452491 818 448 232 193 227 192 294 296 342 287 393 415 396311 515 276 243 174 178 181 230 272 304 252 272 311 300356 518 251 164 149 150 178 219 234 243 170 227 233 264454 665 391 270 247 246 198 238 246 227 159 216 211 171272 510 261 199 183 187 222 220 220 208 139 152 162 163318 484 341 173 173 177 181 201 188 161 123 165 167 159264 329 192 140 108 148 160 184 216 205 129 161 167 154145 231 142 102 88 105 97 116 138 153 97 124 119 118161 236 156 114 125 132 143 128 169 134 115 134 113 101162 222 115 91 74 72 93 110 114 116 94 86 107 100116 146 89 68 55 58 84 93 106 84 71 59 84 77114 151 125 75 71 77 67 73 95 88 68 58 70 5031 36 29 24 22 29 28 39 33 31 13 21 21 2430 50 28 24 21 31 11 26 31 40 32 42 58 2219 36 27 7 11 9 11 8 18 20 9 8 8 55 15 10 3 8 6 8 14 10 9 3 4 3 43 16 8 - - - - - 1 - 1 1 1 355,,660000 88,,004411 44,,558899 33,,220033 33,,002222 33,,221177 33,,330000 33,,888877 44,,221133 44,,116655 33,,113399 33,,662266 33,,994466 33,,772233Figure 3.08bVenture Capital Investments in 1985 to 2012By Region (Number of Deals)
  34. 34. 2013 NVCA YearbookThomson Reuters 33SSttaaggee 11998855 11998866 11998877 11998888 11998899 11999900 11999911 11999922 11999933 11999944 11999955 11999966 11999977 11999988Seed 357 388 387 371 355 258 193 252 290 332 431 504 542 670EarlyStage 290 333 412 359 338 370 278 291 184 256 519 754 896 1,019Expansion 525 504 616 614 664 603 544 606 515 429 706 1,045 1,402 1,572LaterStage 173 196 231 182 187 231 258 243 223 220 238 334 383 467TToottaall 11,,334455 11,,442211 11,,664466 11,,552266 11,,554444 11,,446622 11,,227733 11,,339922 11,,221122 11,,223377 11,,889944 22,,663377 33,,222233 33,,77228811999999 22000000 22000011 22000022 22000033 22000044 22000055 22000066 22000077 22000088 22000099 22001100 22001111 22001122811 703 279 181 216 234 264 396 524 537 375 409 445 2801,735 2,855 1,299 875 799 899 859 1,001 1,129 1,137 973 1,271 1,562 1,6472,445 3,703 2,392 1,585 1,355 1,201 1,116 1,380 1,277 1,242 888 1,074 1,021 962609 780 619 562 652 883 1,061 1,110 1,283 1,249 903 872 918 83455,,660000 88,,004411 44,,558899 33,,220033 33,,002222 33,,221177 33,,330000 33,,888877 44,,221133 44,,116655 33,,113399 33,,662266 33,,994466 33,,772233Figure 3.09bVenture Capital Investments1985 to 2012 By Stage (Number of Deals)Stage 1985-1Q 1985-2Q 1985-3Q 1985-4Q 1985Total 1986-1Q 1986-2Q 1986-3Q 1986-4Q 1986Total 1987-1Q 1987-2Q 1987-3Q 1987-4QSeed 153.0 146.5 93.7 133.0 526.2 185.6 270.0 114.7 189.4 759.7 145.7 199.4 142.0 136.3EarlyStage 96.3 185.3 106.3 129.9 517.8 129.6 135.3 176.6 178.7 620.3 170.7 183.9 205.1 190.8Expansion 219.5 319.6 312.8 393.7 1,245.7 270.0 381.4 252.6 294.8 1,198.8 423.3 354.2 402.5 315.1LaterStage 154.4 89.4 164.4 78.5 486.8 125.3 93.2 180.4 146.7 545.7 100.1 164.9 118.9 110.7Total 623.1 740.8 677.2 735.1 2,776.4 710.5 879.9 724.4 809.6 3,124.5 839.7 902.4 868.5 752.91986 198719851987Total 1988-1Q 1988-2Q 1988-3Q 1988-4Q 1988Total623.4 164.7 150.0 240.6 115.2 670.5750.5 144.0 216.6 184.7 169.4 714.61,495.1 314.5 497.1 320.2 431.4 1,563.2494.6 135.3 105.0 151.4 66.0 457.73,363.6 758.5 968.6 896.9 781.9 3,406.01988Figure 3.09c-1Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)Stage 1989-1Q 1989-2Q 1989-3Q 1989-4Q 1989Total 1990-1Q 1990-2Q 1990-3Q 1990-4Q 1990Total 1991-1QSeed 138.1 174.6 115.4 130.3 558.4 81.9 116.7 114.8 83.8 397.1 45.8EarlyStage 255.9 127.7 163.1 190.9 737.6 139.7 199.1 133.1 212.5 684.4 137.9Expansion 399.6 434.1 305.5 456.6 1,595.8 307.2 356.1 208.0 397.9 1,269.2 249.5LaterStage 95.5 97.7 78.3 156.4 427.8 123.1 105.5 126.3 116.7 471.7 89.5Total 889.1 834.1 662.2 934.2 3,319.6 651.9 777.4 582.2 810.9 2,822.4 522.81989 19901991-2Q 1991-3Q 1991-4Q 1991Total 1992-1Q 1992-2Q 1992-3Q 1992-4Q 1992Total84.6 53.4 58.0 241.8 67.6 210.2 71.8 206.8 556.5130.3 140.4 140.0 548.7 123.0 187.6 102.7 153.4 566.8276.2 262.9 311.7 1,100.2 496.3 434.8 352.2 495.4 1,778.7115.8 57.9 100.1 363.3 203.2 175.3 107.0 198.8 684.3606.9 514.5 609.9 2,254.0 890.2 1,007.9 633.8 1,054.5 3,586.31991 1992Figure 3.09c-2Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)Stage 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996Seed 526.2 759.7 623.4 670.5 558.4 397.1 241.8 556.5 629.6 781.2 1,272.9 1,271.7EarlyStage 517.8 620.3 750.5 714.6 737.6 684.4 548.7 566.8 575.8 839.7 1,733.4 2,640.5Expansion 1,245.7 1,198.8 1,495.1 1,563.2 1,595.8 1,269.2 1,100.2 1,778.7 1,866.0 1,539.1 3,564.2 5,540.4LaterStage 486.8 545.7 494.6 457.7 427.8 471.7 363.3 684.3 585.4 985.7 1,442.2 1,888.9Total 2,776.4 3,124.5 3,363.6 3,406.0 3,319.6 2,822.4 2,254.0 3,586.3 3,656.8 4,145.7 8,012.6 11,341.51997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012S 1,374.2 1,766.2 3,666.2 3,156.1 800.7 340.2 365.7 951.6 1,006.3 1,293.6 1,819.6 1,917.3 1,870.73,420.5 5,460.1 11,360.2 25,335.4 8,606.3 3,935.3 3,608.5 4,045.9 4,056.3 4,727.4 6,081.5 5,731.0 4,906.97,588.6 10,367.0 29,406.8 59,121.5 22,911.7 12,135.5 9,805.5 9,046.2 8,607.9 11,154.8 11,091.8 10,857.4 6,824.22,591.6 3,905.5 10,467.0 17,587.0 8,649.6 5,721.1 5,901.4 9,191.5 9,942.0 10,441.5 12,882.2 11,420.1 6,776.514,974.9 21,498.9 54,900.3 105,200.0 40,968.3 22,132.0 19,681.1 23,235.1 23,612.5 27,617.2 31,875.1 29,925.9 20,378.32010 2011 2012S 1,661.3 1,052.6 726.45,867.0 8,794.4 7,876.38,702.0 9,830.5 9,376.47,085.4 9,819.7 8,673.323,315.7 29,497.2 26,652.4Figure 3.09Venture Capital Investments1985 to 2012 By Stage ($ Millions)
  35. 35. National Venture Capital Association34 Thomson ReutersStage 1993-1Q 1993-2Q 1993-3Q 1993-4Q 1993Total 1994-1Q 1994-2Q 1994-3Q 1994-4Q 1994Total 1995-1QSeed 139.7 144.1 164.3 181.5 629.6 190.0 225.8 160.2 205.1 781.2 316.6EarlyStage 164.3 136.8 106.6 168.0 575.8 177.6 196.4 157.8 307.9 839.7 408.8Expansion 355.0 412.3 461.3 637.3 1,866.0 325.3 390.5 344.2 479.1 1,539.1 620.0LaterStage 189.2 111.2 116.8 168.3 585.4 186.6 190.5 262.0 346.6 985.7 344.5Total 848.3 804.4 849.0 1,155.2 3,656.8 879.5 1,003.3 924.2 1,338.7 4,145.7 1,689.91993 19941995-2Q 1995-3Q 1995-4Q 1995Total 1996-1Q 1996-2Q 1996-3Q 1996-4Q 1996Total396.6 229.9 329.8 1,272.9 322.7 431.9 200.6 316.5 1,271.7393.6 366.8 564.1 1,733.4 597.8 714.0 574.6 754.1 2,640.51,328.2 800.4 815.7 3,564.2 1,151.9 1,509.9 1,277.0 1,601.6 5,540.4428.0 308.7 361.1 1,442.2 346.4 460.3 545.4 536.8 1,888.92,546.4 1,705.8 2,070.6 8,012.6 2,418.8 3,116.1 2,597.6 3,208.9 11,341.51995 1996Figure 3.09c-3Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)Stage 1997-1Q 1997-2Q 1997-3Q 1997-4Q 1997Total 1998-1Q 1998-2Q 1998-3Q 1998-4Q 1998Total 1999-1QSeed 400.6 330.8 323.3 319.5 1,374.2 402.6 426.4 459.9 477.3 1,766.2 591.5EarlyStage 769.5 846.8 760.1 1,044.1 3,420.5 1,164.7 1,014.5 1,290.4 1,990.6 5,460.1 1,215.0Expansion 1,358.4 1,958.5 1,970.6 2,301.0 7,588.6 1,753.9 3,359.1 2,716.0 2,538.0 10,367.0 3,210.3LaterStage 594.7 531.6 669.3 795.9 2,591.6 854.6 973.6 949.5 1,127.9 3,905.5 1,605.2Total 3,123.3 3,667.8 3,723.3 4,460.5 14,974.9 4,175.7 5,773.5 5,415.7 6,133.9 21,498.9 6,622.01997 19981999-2Q 1999-3Q 1999-4Q 1999Total 2000-1Q 2000-2Q 2000-3Q 2000-4Q 2000Total840.4 989.7 1,244.5 3,666.2 807.0 984.1 878.3 486.8 3,156.11,993.7 2,661.8 5,489.7 11,360.2 7,138.2 6,937.9 5,912.3 5,347.0 25,335.45,498.5 7,348.1 13,350.0 29,406.8 16,113.3 15,761.4 15,263.6 11,983.2 59,121.52,999.2 2,597.5 3,265.1 10,467.0 4,382.9 4,343.2 4,572.9 4,288.1 17,587.011,331.8 13,597.1 23,349.3 54,900.3 28,441.3 28,026.6 26,627.0 22,105.1 105,200.01999 2000Figure 3.09c-4Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)Stage 2001-1Q 2001-2Q 2001-3Q 2001-4Q 2001Total 2002-1Q 2002-2Q 2002-3Q 2002-4Q 2002Total 2003-1QSeed 256.6 265.3 128.5 150.3 800.7 76.4 93.5 84.2 86.1 340.2 84.5EarlyStage 3,459.5 2,102.1 1,712.2 1,332.5 8,606.3 1,182.2 1,134.1 827.7 791.4 3,935.3 690.0Expansion 6,939.3 6,622.1 4,563.8 4,786.5 22,911.7 3,804.8 3,544.3 2,462.6 2,323.8 12,135.5 2,468.7LaterStage 2,447.6 2,513.1 1,802.4 1,886.5 8,649.6 1,927.7 1,339.6 1,094.4 1,359.4 5,721.1 1,159.6Total 13,103.0 11,502.5 8,206.9 8,155.9 40,968.3 6,991.1 6,111.4 4,468.8 4,560.7 22,132.0 4,402.82001 20022003-2Q 2003-3Q 2003-4Q 2003Total 2004-1Q 2004-2Q 2004-3Q 2004-4Q 2004Total95.2 100.3 85.8 365.7 104.8 124.3 168.0 554.5 951.61,015.7 806.8 1,096.0 3,608.5 904.9 1,030.3 1,028.6 1,082.0 4,045.92,513.9 2,202.5 2,620.3 9,805.5 2,063.3 2,680.0 2,043.1 2,259.7 9,046.21,368.7 1,520.5 1,852.6 5,901.4 2,312.6 2,481.9 1,856.6 2,540.4 9,191.54,993.4 4,630.1 5,654.7 19,681.1 5,385.6 6,316.6 5,096.3 6,436.6 23,235.120042003Figure 3.09c-5Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)Stage 2005-1Q 2005-2Q 2005-3Q 2005-4Q 2005Total 2006-1Q 2006-2Q 2006-3Q 2006-4Q 2006Total 2007-1QSeed 148.5 530.5 165.0 162.2 1,006.3 246.7 374.0 366.6 306.2 1,293.6 319.3EarlyStage 867.8 1,001.6 1,192.0 994.8 4,056.3 930.1 1,018.4 1,112.3 1,666.6 4,727.4 1,337.9Expansion 2,132.9 2,367.4 1,759.6 2,348.1 8,607.9 2,604.7 3,211.1 2,881.2 2,457.7 11,154.8 2,646.9LaterStage 2,082.1 2,551.8 2,972.5 2,335.5 9,942.0 2,847.4 2,793.3 2,529.5 2,271.4 10,441.5 3,108.6Total 5,231.3 6,451.3 6,089.1 5,840.7 23,612.5 6,629.0 7,396.8 6,889.6 6,701.9 27,617.2 7,412.62005 20062007-2Q 2007-3Q 2007-4Q 2007Total 2008-1Q 2008-2Q 2008-3Q 2008-4Q 2008Total489.2 455.0 556.0 1,819.6 459.3 535.3 557.9 364.9 1,917.31,700.5 1,263.1 1,780.0 6,081.5 1,376.9 1,524.3 1,372.6 1,457.2 5,731.02,353.2 3,104.8 2,986.9 11,091.8 3,427.7 2,697.9 2,556.8 2,175.0 10,857.43,289.9 3,389.9 3,093.8 12,882.2 2,813.0 3,272.5 3,137.7 2,197.1 11,420.17,832.8 8,213.0 8,416.7 31,875.1 8,076.8 8,030.0 7,625.0 6,194.1 29,925.92007 2008Figure 3.09c-6Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)Stage 2009-1Q 2009-2Q 2009-3Q 2009-4Q 2009Total 2010-1Q 2010-2Q 2010-3Q 2010-4Q 2010Total 2011-1QSeed 319.7 672.4 511.0 367.6 1,870.7 407.9 687.8 332.5 233.1 1,661.3 225.2EarlyStage 767.3 1,179.6 1,213.6 1,746.5 4,906.9 1,147.8 1,740.3 1,410.4 1,568.5 5,867.0 1,830.3Expansion 1,223.8 1,770.3 1,824.4 2,005.7 6,824.2 1,788.9 2,796.5 1,685.3 2,431.3 8,702.0 2,257.4LaterStage 1,531.5 1,606.8 1,844.7 1,793.6 6,776.5 1,723.4 1,925.7 1,999.1 1,437.1 7,085.4 2,220.8Total 3,842.2 5,229.1 5,393.7 5,913.3 20,378.3 5,067.9 7,150.2 5,427.4 5,670.2 23,315.7 6,533.72009 20102011-2Q 2011-3Q 2011-4Q 2011Total 2012-1Q 2012-2Q 2012-3Q 2012-4Q 2012Total413.4 221.7 192.4 1,052.6 157.9 230.6 181.0 156.9 726.42,272.4 2,233.2 2,458.5 8,794.4 1,933.7 2,190.2 1,824.0 1,928.3 7,876.32,418.9 2,545.3 2,608.9 9,830.5 1,789.2 2,715.7 2,614.1 2,257.5 9,376.43,037.1 2,426.3 2,135.5 9,819.7 2,355.8 2,187.7 1,983.2 2,146.6 8,673.38,141.7 7,426.5 7,395.3 29,497.2 6,236.6 7,324.2 6,602.3 6,489.4 26,652.420122011Figure 3.09c-7Quarterly Venture Capital Investments1985 to 2012 By Stage ($ Millions)
  36. 36. 2013 NVCA YearbookThomson Reuters 35Stage 1989-1Q 1989-2Q 1989-3Q 1989-4Q 1989Total 1990-1Q 1990-2Q 1990-3Q 1990-4Q 1990TotalSeed 106 100 77 72 355 60 69 59 70 258EarlyStage 101 65 84 88 338 87 97 73 113 370Expansion 215 160 127 162 664 148 153 145 157 603LaterStage 52 33 38 64 187 55 57 48 71 231Total 474 358 326 386 1,544 350 376 325 411 1,4621989 19901991-1Q 1991-2Q 1991-3Q 1991-4Q 1991Total 1992-1Q 1992-2Q 1992-3Q 1992-4Q 1992Total51 49 42 51 193 49 68 49 86 25279 69 60 70 278 73 86 52 80 291137 127 126 154 544 156 160 104 186 60649 69 54 86 258 74 47 44 78 243316 314 282 361 1,273 352 361 249 430 1,39219921991Figure 3.09d-2Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)Stage 1993-1Q 1993-2Q 1993-3Q 1993-4Q 1993Total 1994-1Q 1994-2Q 1994-3Q 1994-4Q 1994Total 1995-1QSeed 69 68 66 87 290 91 67 83 91 332 125EarlyStage 41 49 38 56 184 64 61 54 77 256 130Expansion 145 121 116 133 515 105 111 98 115 429 187LaterStage 67 53 52 51 223 50 69 43 58 220 61Total 322 291 272 327 1,212 310 308 278 341 1,237 5031993 19941995-2Q 1995-3Q 1995-4Q 1995Total 1996-1Q 1996-2Q 1996-3Q 1996-4Q 1996Total95 95 116 431 130 140 97 137 504136 116 137 519 148 206 175 225 754179 164 176 706 235 247 245 318 1,04555 58 64 238 71 82 85 96 334465 433 493 1,894 584 675 602 776 2,6371995 1996Figure 3.09d-3Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)Stage 1997-1Q 1997-2Q 1997-3Q 1997-4Q 1997Total 1998-1Q 1998-2Q 1998-3Q 1998-4Q 1998Total 1999-1QSeed 163 120 120 139 542 152 162 164 192 670 166EarlyStage 201 208 228 259 896 242 221 243 313 1,019 245Expansion 310 361 320 411 1,402 366 407 405 394 1,572 383LaterStage 100 87 90 106 383 108 121 114 124 467 140Total 774 776 758 915 3,223 868 911 926 1,023 3,728 9341997 19981999-2Q 1999-3Q 1999-4Q 1999Total 2000-1Q 2000-2Q 2000-3Q 2000-4Q2000Total211 249 185 811 196 197 172 138 703380 448 662 1,735 763 793 680 619 2,855567 595 900 2,445 1,009 981 899 814 3,703174 150 145 609 192 172 207 209 7801,332 1,442 1,892 5,600 2,160 2,143 1,958 1,780 8,0411999 2000Figure 3.09d-4Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)Figure 3.09d-5Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)Stage 1985-1Q 1985-2Q 1985-3Q 1985-4Q 1985Total 1986-1Q 1986-2Q 1986-3Q 1986-4Q 1986Total 1987-1QSeed 110 88 61 98 357 134 107 65 82 388 116EarlyStage 88 69 60 73 290 111 70 72 80 333 131Expansion 138 122 114 151 525 166 136 96 106 504 182LaterStage 65 40 37 31 173 60 55 31 50 196 64Total 401 319 272 353 1,345 471 368 264 318 1,421 4931985 19861987-2Q 1987-3Q 1987-4Q 1987Total 1988-1Q 1988-2Q 1988-3Q 1988-4Q 1988Total101 85 85 387 120 79 88 84 37183 103 95 412 99 94 87 79 359139 158 137 616 158 182 133 141 61464 51 52 231 54 48 42 38 182387 397 369 1,646 431 403 350 342 1,5261987 1988Figure 3.09d-1Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)Stage 2001-1Q 2001-2Q 2001-3Q 2001-4Q 2001Total 2002-1Q 2002-2Q 2002-3Q 2002-4Q 2002Total 2003-1Q 2003-2QSeed 80 73 68 58 279 47 53 40 41 181 57 60EarlyStage 436 338 271 254 1,299 247 242 193 193 875 188 215Expansion 650 670 543 529 2,392 410 447 348 380 1,585 346 320LaterStage 155 156 148 160 619 160 136 128 138 562 132 160Total 1,321 1,237 1,030 1,001 4,589 864 878 709 752 3,203 723 755200220012003-3Q 2003-4Q 2003Total 2004-1Q 2004-2Q 2004-3Q 2004-4Q 2004Total44 55 216 46 75 45 68 234183 213 799 207 238 222 232 899336 353 1,355 281 349 261 310 1,201168 192 652 205 216 194 268 883731 813 3,022 739 878 722 878 3,2172003 2004
  37. 37. National Venture Capital Association36 Thomson ReutersIndustry 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996Software 612 577 519 482 457 519 463 614 459 671 1,186 2,350Biotechnology 136 223 290 369 334 314 287 581 479 585 832 1,186Industrial/Energy 201 208 290 222 345 242 183 285 278 294 527 498Medical Devices and Equipment 181 182 259 340 347 325 235 514 393 439 668 618IT Services 26 38 51 39 36 38 41 29 54 119 175 442Media and Entertainment 101 118 155 166 151 93 69 132 278 275 944 1,154Consumer Products and Services 69 135 176 153 86 159 126 123 159 176 534 510Semiconductors 253 293 255 294 165 190 90 156 93 157 214 340Telecommunications 178 174 148 161 124 128 117 200 251 463 937 1,323Retailing/Distribution 32 114 296 232 217 89 48 97 103 103 303 269Computers and Peripherals 449 473 392 370 311 245 174 205 164 178 316 363Networking and Equipment 224 164 143 137 197 174 140 250 516 250 372 631Healthcare Services 81 125 140 97 155 92 72 191 202 202 460 734Financial Services 81 96 62 209 233 63 25 120 102 123 181 323Electronics/Instrumentation 120 121 122 77 110 58 74 51 50 65 151 211Business Products and Services 29 81 64 53 52 94 77 39 70 40 176 369Other 3 3 0 6 0 33 0 6 6 37 21Total 2,776 3,125 3,364 3,406 3,320 2,822 2,254 3,586 3,657 4,146 8,013 11,3411997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012S 3,462 4,721 10,690 25,251 10,820 5,509 4,855 5,483 5,144 5,449 6,124 6,069 4,205 5,116 7,516 8,2931,368 1,551 2,101 4,270 3,480 3,312 3,745 4,388 3,930 4,816 5,713 4,970 3,972 3,903 4,825 4,115704 1,260 1,464 2,627 1,250 826 774 847 1,138 1,996 3,082 4,631 2,564 3,465 3,595 2,7921,026 1,256 1,577 2,403 2,046 1,863 1,613 1,905 2,209 2,778 3,759 3,603 2,605 2,341 2,883 2,511640 1,093 4,323 8,890 2,475 978 747 748 1,057 1,482 1,930 2,108 1,228 1,661 2,264 1,9931,056 1,873 7,408 10,598 2,370 784 662 1,410 1,200 1,888 2,166 1,796 1,371 1,572 2,258 1,976742 680 2,718 3,220 702 256 157 334 363 424 454 418 489 571 1,399 1,208597 631 1,380 3,806 2,474 1,654 1,767 2,166 1,855 2,307 2,041 1,595 773 1,046 1,345 9261,562 3,024 8,032 16,468 5,179 2,168 1,674 1,854 2,150 2,414 2,191 1,514 636 792 631 582326 769 2,810 3,209 368 139 64 217 249 189 340 222 156 165 454 498394 383 939 1,628 693 457 360 538 535 388 550 470 345 408 494 453962 1,446 4,658 11,730 5,791 2,671 1,739 1,559 1,695 1,252 1,443 756 753 678 357 316939 959 1,495 1,386 543 380 229 389 364 416 307 159 171 272 394 309385 843 2,215 4,131 1,238 331 413 530 903 528 580 464 404 408 394 284307 202 274 797 400 309 209 395 412 703 557 646 393 422 437 244434 706 2,590 4,726 1,085 478 673 460 408 586 621 475 260 491 215 9771 102 225 60 55 17 - 14 - - 18 30 56 4 37 5314,975 21,499 54,900 105,200 40,968 22,132 19,681 23,235 23,612 27,617 31,875 29,926 20,378 23,316 29,497 26,652Figure 3.10Venture Capital Investments1985 to 2012 By Industry ($ Millions)Industry 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996Software 321 323 307 280 296 302 287 296 243 253 435 686Biotechnology 73 98 138 153 138 145 138 164 136 140 176 236Media and Entertainment 56 68 92 75 71 58 54 79 82 97 138 191Medical Devices and Equipment 128 117 166 151 185 191 161 188 148 128 179 212IT Services 23 25 33 24 27 31 30 22 19 33 62 127Industrial/Energy 122 138 162 140 144 157 125 132 102 101 128 155Consumer Products and Services 43 51 72 59 52 67 48 51 54 66 114 132Semiconductors 84 72 92 91 80 78 51 60 45 38 64 74Telecommunications 86 77 94 80 81 63 67 64 73 73 141 211Retailing/Distribution 18 32 71 81 73 46 38 34 35 28 54 70Electronics/Instrumentation 77 68 70 57 60 50 47 38 27 37 49 47Computers and Peripherals 157 148 131 138 135 104 78 84 65 66 93 95Financial Services 22 28 36 43 44 25 24 24 31 31 47 61Healthcare Services 33 56 56 46 55 41 38 46 52 45 73 139Networking and Equipment 80 76 73 69 71 74 65 83 65 77 82 123Business Products and Services 20 42 51 38 32 28 20 25 32 22 50 69Other 2 2 2 1 2 2 2 3 2 9 9Total 1,345 1,421 1,646 1,526 1,544 1,462 1,273 1,392 1,212 1,237 1,894 2,6371997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012S 820 980 1,411 2,165 1,298 1,005 965 949 955 1,027 1,073 1,098 815 1,035 1,178 1,277242 274 260 355 337 326 357 400 405 483 526 530 458 493 466 463219 266 701 944 372 167 127 140 209 329 399 400 266 345 441 395272 294 288 295 257 234 248 280 286 358 399 402 345 349 370 319162 207 456 687 324 170 147 151 172 236 281 286 221 303 362 315213 186 205 254 204 131 142 158 154 225 306 365 255 307 311 243162 163 287 285 119 72 47 67 78 79 110 103 86 114 137 162116 120 148 256 209 169 214 258 218 266 224 206 132 137 136 108268 340 529 858 481 275 214 232 236 309 279 230 131 120 124 9591 121 230 282 83 49 31 38 40 40 41 42 38 33 68 5954 56 53 76 59 63 55 72 84 96 93 94 63 67 58 51115 91 104 133 81 59 57 61 65 60 70 61 54 56 61 4891 115 190 334 137 76 64 68 63 90 85 68 54 74 60 45152 155 159 165 105 70 70 64 64 51 57 51 40 45 47 43140 211 279 481 335 232 186 193 186 137 146 106 101 63 49 3894 139 279 459 177 102 97 83 83 99 113 119 72 75 61 3512 10 21 12 11 3 1 3 2 2 11 4 8 10 17 273,223 3,728 5,600 8,041 4,589 3,203 3,022 3,217 3,300 3,887 4,213 4,165 3,139 3,626 3,946 3,723Figure 3.10bVenture Capital Investments1985 to 2012 By Industry (Number of Deals)Stage 2005-1Q 2005-2Q 2005-3Q 2005-4Q 2005Total 2006-1Q 2006-2Q 2006-3Q 2006-4Q 2006Total 2007-1QSeed 52 68 68 76 264 82 93 121 100 396 90EarlyStage 212 219 214 214 859 205 241 236 319 1,001 257Expansion 275 295 242 304 1,116 328 360 345 347 1,380 277LaterStage 223 280 286 272 1,061 290 314 253 253 1,110 282Total 762 862 810 866 3,300 905 1,008 955 1,019 3,887 9062005 20062007-2Q 2007-3Q 2007-4Q 2007Total 2008-1Q 2008-2Q 2008-3Q 2008-4Q2008Total139 136 159 524 135 134 156 112 537326 257 289 1,129 265 301 284 287 1,137322 319 359 1,277 344 331 282 285 1,242326 336 339 1,283 310 338 323 278 1,2491,113 1,048 1,146 4,213 1,054 1,104 1,045 962 4,1652007 2008Figure 3.09d-6Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)Stage 2009-1Q 2009-2Q 2009-3Q 2009-4Q2009Total 2010-1Q 2010-2Q 2010-3Q 2010-4Q 2010Total 2011-1QSeed 70 87 99 119 375 93 119 99 98 409 94EarlyStage 195 213 244 321 973 268 361 308 334 1,271 344Expansion 183 217 219 269 888 252 300 244 278 1,074 225LaterStage 229 244 199 231 903 205 239 230 198 872 234Total 677 761 761 940 3,139 818 1,019 881 908 3,626 897201020092011-2Q 2011-3Q 2011-4Q 2011Total 2012-1Q 2012-2Q 2012-3Q 2012-4Q 2012Total128 114 109 445 61 78 73 68 280392 401 425 1,562 350 433 411 453 1,647275 277 244 1,021 221 250 244 247 962279 212 193 918 229 197 192 216 8341,074 1,004 971 3,946 861 958 920 984 3,72320122011Figure 3.09d-7Quarterly Venture Capital Investments1985 to 2012 By Stage (Number of Deals)
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