Data presented by Bobby Franklin, President of NVCA

1. Venture Capital Outlook
2014
San Diego Venture Group
January 23, 2014
Bobby Franklin
NVCA President & CEO

2. The Number of U.S. Venture Firms:
Back to Rational Levels
Year
Number of
Active Firms
Capital
Managed
1970
28
$1B
1980
87
$4B
1990
96
$28B
2000
1,022
$220B
2010
462
$177B
2013
382
$203B

3. VC Raised $17B in 2013: Down but
hardly out
Year
Number of
Funds
VC Dollars
Raised
2009
159
$16.1B
2010
173
$13.2B
2011
186
$18.9B
2012
208
$19.5B
2013
186
$16.7B

4. VC Investment by Year
$120
$100
$105
B
$32
B
$60
$29.
4B
$40
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
4
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
$0
1989
$20
1988
$ Billion Invested
$80

5. VC Fundraising vs. Investment in
2013
Six consecutive years with a considerable gap
between venture capital fundraising and
dollars invested.
Is it an issue?

6. 100%
80%
25%
60%
37
%
15
%
19%
40%
20%
Software
2013
2011
2009
2007
2005
2003
2001
1999
1997
0%
1995
% of Total VC Investment $
IT Software Attracting Most VC
Dollars
Biotech
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
6

7. Seed stage slowing, Early stage
increasing
7

8. San Diego Metro VC Investment
300
2.4
2.297
250
1.9
1.846
1.579
150
100
1.4
1.197 1.203 1.23
1.209
0.997
235
1.156
0.939
0.825
0.881 0.927
0.9
0.757
169
156
114
125
132
143
130
0.4
135
134
114
Billions Invested
# of Deals
200
114
105
97
50
-0.1
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
8

9. 2013 San Diego Metro VC Investment
by Industry
$ Funded
7%
4%
9%
51%
12%
17%
Biotech
Medical Devices
Software
Industrial/Energy
IT Services
Other
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
9

10. 2013: More Life Sciences IPOs
than the prior 5 years combined
Source: Thomson Reuters/National Venture Capital Association
10

11. M&A Exits are Down
600
500
# Deals
400
300
200
543
499488
485488
443
423
402
380384363
360
323
377
227
189
143
100
0
1997 1999 2001 2003 2005 2007 2009 2011 2013
Source: Thomson Reuters/National Venture Capital Association
11

12. The future of venture capital
• Today, capital is essential to grow a company,
not necessarily to start it
• Tomorrow, better fund performance and returns
to LPs
• Venture Capital continues to fuel innovation in a
way unlike any other asset class

13. The Washington Environment
• Gridlock: Last year, Congress passed only 57
bills that got the President’s signature and
became law – lowest in history
• The obvious right thing to do is often widely
supported by elected officials, but it gets tangled
with other issues
• Immigration
• Tax Reform
• NVCA can and does make a difference

14. In Summary...
• Venture capital had a great 2013 and 2014 will
likely be even better
• Venture capital continues to play an important
role in the entrepreneurial ecosystem
• Washington is messy but necessary for the
innovation economy

15. nvca.org
nvcaccess.nvca.org