From my talk as the guest speaker at the VANJ monthly meeting on the topic of the state of early stage venture financing in NY and NJ.

1. Who’s Getting Funded and Why?
The Current State of Start-Up Funding
in the NYC Region
Frank J. Graziano
Managing Partner
January 31, 2012
Monmouth Venture Partners presents
to the

2. Helping Exceptional Companies Realize Their Full Potential 2Monmouth Venture Partners
Areas of Operation
MVP brings together a team with
more than 50 years of diverse
capital markets, strategic
transaction and operational
experience. We provide seasoned,
objective expertise and focused
execution in the areas of:
• Strategic Advisory
• Mergers & Acquisitions
• Capital Formation
• Operational Execution
Large Diversified Financial Service Companies
Business Brokers & Community Lenders
Where We Fit InMonmouth Venture Partners

3. Helping Exceptional Companies Realize Their Full Potential 3Monmouth Venture Partners
Acknowledgements

4. Helping Exceptional Companies Realize Their Full Potential 4Monmouth Venture Partners
Macro Trends

5. Helping Exceptional Companies Realize Their Full Potential 5Monmouth Venture Partners
Venture investing is back!
Source: CB Insights Venture Capital Activity Report Q4 2011

6. Helping Exceptional Companies Realize Their Full Potential 6Monmouth Venture Partners
4 Qs of more deals and $s invested
Source: CB Insights Venture Capital Activity Report Q4 2011

7. Helping Exceptional Companies Realize Their Full Potential 7Monmouth Venture Partners
$2.5 billion average per month in 2011
Source: CB Insights Venture Capital Activity Report Q4 2011

8. Helping Exceptional Companies Realize Their Full Potential 8Monmouth Venture Partners
Internet dominates, healthcare rebounds
Source: CB Insights Venture Capital Activity Report Q4 2011

9. Helping Exceptional Companies Realize Their Full Potential 9Monmouth Venture Partners
Seed deals on an up trend…
Source: CB Insights Venture Capital Activity Report Q4 2011

10. Helping Exceptional Companies Realize Their Full Potential 10Monmouth Venture Partners
… but still a small % of total funding
Source: CB Insights Venture Capital Activity Report Q4 2011

11. Helping Exceptional Companies Realize Their Full Potential 11Monmouth Venture Partners
“Super Angels” drive seed stage rebound
Source: TrueBridge Capital Partners “State of the Venture Capital Industry” Summer, 2011

12. Helping Exceptional Companies Realize Their Full Potential 12Monmouth Venture Partners
Reid Hoffman - “Super Angel” personified
• Former PayPal EVP
• Co-founder of LinkedIn
• Prolific angel investor
• Runs $20MM Discovery
Fund for Greylock
Partners

13. Helping Exceptional Companies Realize Their Full Potential 13Monmouth Venture Partners
Seed valuations holding steady
Source: TrueBridge Capital Partners “State of the Venture Capital Industry” Summer, 2011

14. Helping Exceptional Companies Realize Their Full Potential 14Monmouth Venture Partners
Regional Trends

15. Helping Exceptional Companies Realize Their Full Potential 15Monmouth Venture Partners
VC Super Bowl: Giants tie Patriots 3rd Q
Source: CB Insights Venture Capital Activity Report Q4 2011

16. Helping Exceptional Companies Realize Their Full Potential 16Monmouth Venture Partners
Giants take $ lead 3rd Q, but can’t hold it
Source: CB Insights Venture Capital Activity Report Q4 2011

17. Helping Exceptional Companies Realize Their Full Potential 17Monmouth Venture Partners
Regardless, NY is a major center for VC
Source: CB Insights Venture Capital Activity Report Q4 2011

18. Helping Exceptional Companies Realize Their Full Potential 18Monmouth Venture Partners
Where’s the New York $ going?
Source: CB Insights Venture Capital Activity Report Q4 2011

19. Helping Exceptional Companies Realize Their Full Potential 19Monmouth Venture Partners
New York #2 in Internet investing
Source: CB Insights Venture Capital Activity Report Q4 2011

20. Helping Exceptional Companies Realize Their Full Potential 20Monmouth Venture Partners
New York: Internet and not much else?
Source: CB Insights “New York Venture Capital – Is the Lack of Industry
Diversity a Positive of its Achilles Heel?”

21. Helping Exceptional Companies Realize Their Full Potential 21Monmouth Venture Partners
What to make of lack of diversification?
Source: CB Insights “New York Venture Capital – Is the Lack of Industry
Diversity a Positive or its Achilles Heel?”

22. Helping Exceptional Companies Realize Their Full Potential 22Monmouth Venture Partners
Take the R – New York’s Silicon Subway
Sources: NYDailyNews.com “Take the R – New York’s Silicon Subway” December 4, 2011
Business Insider December 9, 2011

23. Helping Exceptional Companies Realize Their Full Potential 23Monmouth Venture Partners
Representative recent NY financings

24. Helping Exceptional Companies Realize Their Full Potential 24Monmouth Venture Partners
NJ in the Top 10 for VC nationally
Source: PWC MoneyTreeTM 1Q1995 – 4Q2011 Historical Trend Data

25. Helping Exceptional Companies Realize Their Full Potential 25Monmouth Venture Partners
NJ Venture Investing Readout
0
50
100
150
200
250
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
$MMs
Deals
Source: PWC MoneyTreeTM 1Q1995 – 4Q2011 Historical Trend Data

26. Helping Exceptional Companies Realize Their Full Potential 26Monmouth Venture Partners
NJ versus NY - # of deals
0
10
20
30
40
50
60
70
80
90
100
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
NJ
NY
Source: PWC MoneyTreeTM 1Q1995 – 4Q2011 Historical Trend Data

27. Helping Exceptional Companies Realize Their Full Potential 27Monmouth Venture Partners
NJ versus NY – $ invested
0
100
200
300
400
500
600
700
800
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
NJ
NY
Source: PWC MoneyTreeTM 1Q1995 – 4Q2011 Historical Trend Data

28. Helping Exceptional Companies Realize Their Full Potential 28Monmouth Venture Partners
New Jersey among leaders in healthcare
Source: CB Insights Venture Capital Activity Report Q4 2011

29. Helping Exceptional Companies Realize Their Full Potential 29Monmouth Venture Partners
Where’s the Healthcare $ going?
Source: CB Insights Venture Capital Activity Report Q4 2011

30. Helping Exceptional Companies Realize Their Full Potential 30Monmouth Venture Partners
NJ early stage venture ecosystem
Trien Rosenberg
NJEN

31. Helping Exceptional Companies Realize Their Full Potential 31Monmouth Venture Partners
Representative recent NJ financings

32. Helping Exceptional Companies Realize Their Full Potential 32Monmouth Venture Partners
Some Conclusions & Discussion Points
• VC industry is alive and well in the U.S.
• “Super Angels” and Seed Investing are growing trends
• Despite this “frenzy”, seed valuations remain steady
• Start an Internet company if you want to raise $ from NY
VCs
• NY is either vulnerable or superbly positioned depending on
Internet sector future direction
• NY’s early stage ecosystem very well developed due to
unique circumstances of geography and resource
concentration
• NJ punches above its weight class in early stage investing
• NJ has potential to be a national leader in healthcare VC
• Components of a robust ecosystem exist, but remain
diffused and uncoordinated in NJ

33. Helping Exceptional Companies Realize Their Full Potential 33Monmouth Venture Partners
Discussion, Debate and Q & A

34. Helping Exceptional Companies Realize Their Full Potential 34Monmouth Venture Partners
Thank You
Frank J. Graziano
Managing Partner
Monmouth Venture Partners, LLC
(732) 930-0161
frank@fjgraziano.com