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Thomson Reuters
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*** THE INFORMATION IN THIS RELEASE IS EMBARGOED UNTIL 12:01 A.M
EASTERN TIME ON JULY 1, 2008 ***
NO VENTURE-BACKED IPO’S ISSUED IN THE SECOND QUARTER OF 2008
IPO Drought Creates Capital Market Crisis for Start-Up Community
New York, New York, July 1, 2008 – For the first time since 1978, there were no venture-
backed Initial Public Offerings (IPOs) in the second quarter of 2008 according to the Exit
Poll report by the National Venture Capital Association (NVCA) and Thomson Reuters.
The absence of any offerings this quarter follows an exceptionally slow first quarter when
only 5 venture-backed companies went public. This number is a fraction of the first half of
2007 when 43 companies went public. According to the NVCA, the situation is concerning
enough to be characterized as a capital markets crisis for the start-up community.
“Venture-backed companies that successfully enter the public markets represent a critical
job creation engine for the United States economy, and that engine has completely shut
down,” said Mark Heesen, president of the NVCA. “We need to put regulators, legislators,
presidential candidates, and the private sector on notice that this situation represents a
serious problem that will have long reaching economic implications if not addressed. We
view this quarter as the ‘the canary in the coal mine’.”
During the week of June 23, the NVCA surveyed its membership on the current IPO
drought. The 660 plus responses that were received from venture capitalists across the
country reinforced the concerns of the association, specifically:

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July 1, 2008
• 81 percent of venture capitalists do not see the IPO window opening in 2008.
• Two-thirds of venture capitalists believe that venture-backed companies are less
likely to want to go public today than they were 3 years ago.
• The three largest factors to which venture capitalists attribute the current IPO
drought are:
o Skittish investors (77 percent)
o Credit crunch/mortgage crisis (64 percent)
o Sarbanes Oxley regulation (57 percent)
• Only 8 percent of venture capitalists characterize the current IPO drought as “not
critical” to the future health of the venture capital and entrepreneurial communities.
Dixon Doll, co-founder of Menlo Park based DCM and current NVCA chairman remarked,
“While we clearly recognize that the IPO drought is being driven largely by a weak
economy, there are other systemic factors that are making the IPO exit less attractive for
high quality venture-backed companies. Our government and the private sector should be
doing all that it can to encourage these innovative, high quality companies to enter the
public markets and grow from there. The acquisition will always be an attractive and viable
exit path for venture-backed companies, but the public offerings create visible, long term
economic growth. Imagine the implications if Genentech, Google, or Intel decided to forgo
a public offering and become acquired because the public market option was unappealing.
The “next Genentech or Google” may be making that decision right now. The best choice
for that company should also be the best choice for our capital markets system and our
economy.”
Companies that were once venture-backed but are now public account for 10.3 million jobs
and 18 percent of US GDP, according to a 2007 Global Insight Report.
The NVCA has been advocating for Sarbanes Oxley reform for several years as the cost
for small companies to go public has risen dramatically under the law. This cost, coupled
with a decreased market appetite for smaller cap companies, a lack of analyst coverage,
and a lower investor appetite for technology stocks, has raised the bar considerably for
venture-backed companies hoping to go public. The median age of a venture-backed
company from founding date to IPO hit a 27 year high in 2007 at 8.6 years.
As of 6/30/2008, there were 42 venture-backed companies that have filed for an initial
public offering with the SEC and are currently “in registration.” This number is down 40
percent from its 3-year high of 72 companies in Q3 2007.

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July 1, 2008
Venture-Backed Liquidity Events by Year/Quarter, 2001-2008ytd
*Total
M&A Disclosed *Average Total Average
Deals with M&A M&A Offer IPO Offer
Total
Disclosed Deal Size Amount Amount
M&A Value **Number
Quarter/Year Deals Values ($M) ($M) of IPO's ($M) ($M)
2002 318 152 7,916.4 52.1 22 2,109.1 95.9
2003 290 122 7,721.1 63.3 29 2,022.7 69.8
2004 339 186 15,440.6 83.0 93 11,014.9 118.4
81 45 4,351.9 96.7 10 720.7 72.1
2005-1
81 34 4,725.0 139.0 10 714.1 71.4
2005-2
101 48 18,056.0 376.2 19 1,458.1 76.7
2005-3
87 39 2,594.0 66.5 18 1,592.1 92.2
2005-4
2005 350 166 29,727.0 179.1 57 4,485.0 78.7
107 52 5,607.5 107.8 10 540.8 54.1
2006-1
105 40 4,018.5 100.5 19 2,011.0 105.8
2006-2
94 42 3,894.8 92.7 8 934.2 116.8
2006-3
62 26 5,616.8 216.0 20 1,631.1 81.6
2006-4
2006 368 160 19,137.6 119.6 57 5,117.1 89.8
82 29 4,540.3 156.6 18 2,190.6 121.7
2007-1
87 36 3,972.3 110.3 25 4,146.8 165.9
2007-2
100 52 10,810.0 207.9 12 945.2 78.8
2007-3
86 43 9,084.1 211.3 31 3,043.8 98.2
2007-4
2007 355 160 28,406.7 177.5 86 10,326.3 120.1
70 28 3,602.4 128.7 5 282.7 56.5
2008-1
50 14 2,397.3 171.2 0 0.0 n/a
2008-2
2008 120 42 5,999.7 142.9 5 282.7 56.5
Thomson Reuters & National Venture Capital Association
*Only accounts for deals with disclosed values
**Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile.
Mergers and Acquisitions Volume Declines
In the second quarter of 2008, 50 venture-backed M&A deals were completed, 14 of which
had an aggregate deal value of $2.4 billion. M&A volume of 120 transactions in the first
half of 2008 was down 28 percent from the first half of 2007 when 169 transactions were
completed. The average disclosed deal value for the quarter was $171.2 million.
The Information Technology sector dominated the venture-backed M&A landscape, with 36
deals and a disclosed total dollar value of $1.8 billion. Within this sector, Computer
Software and Services companies accounted for the bulk of the target companies, with 15

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July 1, 2008
transactions across this sector subset. Non-High Technology saw the next highest level of
activity with 11 deals and a combined disclosed value $536.9 million. Finally, Life
Sciences deals accounted for 3 exits with disclosed value for one transaction of $53.2
million.
Venture-Backed M&A Industry Breakdown
Q2 2008
Number
of
Total
Venture-
Number Backed Disclosed
Venture-
of M&A
Backed
Venture- deals
Backed with a Deal
Value
M&A disclosed
Industry ($M)
deals value
Communications and Media 6 2 394.3
Computer Software and Services 15 3 443.0
Internet Specific 7 3 963.0
Semiconductors/Other Elect. 7 1 6.9
Computer Hardware 1 - -
Information
Technology TOTAL 36 9 1,807.2
Biotechnology 1 1 53.2
Medical/Health 2 - -
Life Sciences TOTAL 3 1 53.2
Other Products 6 2 475.5
Consumer Related 2 1 44.0
Industrial/Energy 3 1 17.4
Other TOTAL 11 4 536.9
TOTAL 50 14 2,397.3
Source: Thomson Reuters & National Venture Capital Association
The largest transaction of the quarter was the acquisition of social networking site operator
Bebo, Inc. by AOL LLC. The transaction, valued at $850 million, was completed in May.
Deals bringing in the top returns, those with disclosed values greater than four times the
venture investment, accounted for 55 percent of the total compared to 52 percent last
quarter. Those deals returning less than the amount invested accounted for 27 percent of
the quarter’s total, compared to 26 percent of the total last quarter.

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July 1, 2008
Analysis of Transaction Values versus Amount
Invested
Relationship between transaction value Q108 Q208
and investment M&A** M&A**
Deals where transaction value is less than
total venture investment 6 3
Deals where transaction value is 1-4x total
venture investment 5 2
Deals where transaction value is 4x-10x
8 4
total venture investment
Deals where transaction value is greater
than 10x venture investment 4 2
Total Disclosed Deals 23 11
Source: Thomson Reuters & National Venture Capital
Association
** Disclosed deals that do not have a disclosed total
investment amount are not included.
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About National Venture Capital Association
The National Venture Capital Association (NVCA) represents approximately 480 venture
capital and private equity firms. NVCA's mission is to foster greater understanding of the
importance of venture capital to the U.S. economy and support entrepreneurial activity and
innovation. According to a 2007 Global Insight study, venture-backed companies
accounted for 10.4 million jobs and $2.3 trillion in revenue in the United States in 2006.
The NVCA represents the public policy interests of the venture capital community, strives
to maintain high professional standards, provides reliable industry data, sponsors
professional development, and facilitates interaction among its members. For more
information about the NVCA, please visit www.nvca.org.