Hughes Media Law Group Presents: Venture Funding in Today's Market

Venture Capital Funding in Today’s MarketplaceApril 26, 2010

About Cascadia Capital
2

Investment Bank Serving Emerging Growth & Middle Market Companies
Cornerstones of Cascadia Capital
Services Offered
Corporate Finance
Mergers & Acquisitions
Strategic Advisory
Industry Focuses
Emerging Growth
Communications
Internet New Media
IT
Sustainable Industries
Middle Market
Business Services
Consumer
Distribution
Industrial
3

Full Service Firm
Representative Services
Select Recent Transactions
Mergers &
Acquisitions
Sell-side representation
Buy-side representation
Minority & majority recapitalizations
Management buyouts
Over $660m of recent transactions
Corporate
Finance
Private equity placements
Debt financings
Public company capital raises
Strategic financings
Over $500m of recent transactions
Strategic
Advisory
Services
Restructurings
Shareholder value analysis
Corporate valuations & fairness opinions
Public company takeover defense services
4

Information Technology Practice Overview
Cascadia’s Information Technology Practice operates a Thematic Business Model that allows the firm to uniquely deliver technology domain expertise making up the Information Technology landscape
Cloud Storage
Data Center Automation
IT Performance Management
IT Security
Governance, Risk and Compliance (GRC)
Virtualization
E-Commerce Infrastructure
Enterprise and Web Content Management
Internet and New Media
Broadcast Technology
Legal Technology
The Thematic Business Model drives the four fundamental aspects that are all critical to the successful operation of Cascadia’s Information Technology Practice:
Strong Domain Expertise
Comprehensive Understanding of Technology Market Dynamics
Deep and Broad Relationships with Technology Strategic Buyers and Financial Sponsors
Extensive Technology Deal-making Experience

Market Overview
6

The Markets Are Recovering
The financial and economic downturn of 2008 caused a hiatus in both M&A and Financing markets throughout most of 2009
Large acquirers focused on controlling internal costs
Venture Capitalists focused on making sure that current portfolio companies remain afloat and were hesitant to put money to work in new ventures until the economic situation stabilized
The markets have been improving since Q4 of 2009
Market reached it’s bottom in Q3 of 2009 and a rebound is underway
Pickup in both M&A and Capital Raising activity
However, activity is still below 2006 and 2007 highs

Technology M&A
Technology M&A activity has begun to rebound but still below 2006 levels
Source: The 451 Group

Technology M&A by Industry, LTM 3/31/10
Internet, IT Services and Application Software lead the way as the most active sectors within IT
Source: The 451 Group

Venture Capital Fundraising
Venture Capital fundraising has declined as Limited Partners reallocate their portfolios
However, plenty of dry-powder remains on the sidelines
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

Venture Capital Returns vs. Stock Market Indices
Venture capital returns have outpaced stock market indices over the long term
Venture capital valuations move directionally with the public markets; fund managers base their valuations on a wider range of factors than just the public markets, thereby reducing the near-term volatility of VC returns relative to stock market indices
Source: Cambridge Associates LLC

Venture Capital Activity
Deal volume is increasing as the economy stabilizes and VCs regain comfort in the market
Levels still 25% below 2007 and 2008 highs

Venture Capital Activity by Stage of Development

VC Activity by Industry, LTM 3/31/10
Software, Life Sciences and Media lead the way as the most active sector within IT

Median Pre-Money Valuation by Series
Pre-money valuations have bottomed out in 2009 and there are signs that valuations are improving
Source: The Venture Financing Report, Cooley Godward Kronish LLP, February 18, 2010

Public IT Company Valuations are Increasing
Source: CapitalIQ

Selected Software M&A Activity
Source: CapitalIQ; The 451 Group

Selected Software Equity Private Placement Activity
Source: CapitalIQ

Hughes Media Law Group Presents: Venture Funding in Today's Market

by Waldo Finn on Apr 27, 2010

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