The venture capital exit market remained strong in the third quarter of 2007 despite stock market volatility and concerns about subprime mortgages. There were 67 M&A deals totaling $7.7 billion, with the average deal size the highest since 2000. Additionally, there were 12 IPOs that raised $945.2 million. While exits face challenges in the coming quarters as acquisitions take longer to close and some IPOs trade below offering prices, the third quarter exit market demonstrated resilience.

1. Channa Luma, The Weiser Group for NVCA, 302-368-2345, cluma@weisergroup.com
Matthew Toole, Thomson Financial, 646-822-7560, matthew.toole@thomson.com
Sandy Anglin, Thomson Financial, 646-822-7334, sandy.anglin@thomson.com
VC EXIT MARKET NOT IMPACTED BY MARKET VOLTATILITY AND
SUB PRIME CONCERNS IN 3Q 2007
Average Disclosed M&A Transaction Value Reaches Highest Level Since 2000
New York, NY- October 1, 2007 – Sixty-seven venture-backed mergers and acquisitions were completed
in the third quarter of 2007, 34 of which had disclosed values totaling $7.7 billion, according to the Exit
Poll report by Thomson Financial and the National Venture Capital Association (NVCA). This dollar
volume represents a 104 percent increase from the same quarter last year when 41 disclosed deals
accounted for $3.8 billion in value. Additionally, the average disclosed acquisition value was at its highest
level since the fourth quarter of 2000. The venture-backed IPO market had 12 offerings for $945.2 million
in 3Q 2007, a slight increase from the same quarter last year when $934.2 million was raised from 8
offerings.
“The third quarter was marked by significant stock market volatility and growing concerns about the state
of sub-prime mortgages. Venture-backed companies navigated these hurdles well as evidenced by strong
M&A transactions and a growing pipeline of venture-backed companies in registration,” said Mark Heesen,
president of the National Venture Capital Association. “However, both exit strategies will be facing
challenges over the next several quarters. Anecdotally, we are hearing that acquisitions are taking longer to
close as corporations remain cautious in an unpredictable market. Additionally, a growing number of
venture-backed companies are trading below their offering prices, signaling potential market weakness.
Both these concerns are surmountable but will factor into the health of the overall exit market,” Heesen
added.
Venture-Backed Liquidity Events by Year/Quarter, 2001-2007ytd
*Total
M&A *Average Total Average
Disclosed
Total Deals with M&A M&A Offer IPO Offer
Disclosed Value Deal Size **Number Amount Amount
M&A
Quarter/Year Values ($M) ($M) ($M)
Deals ($M) of IPOs
2001 353 165 16,798.9 101.8 41 3,489.9 85.1
2002 318 152 7,916.4 52.1 22 2,109.1 95.9
2003 291 123 7,726.1 62.8 29 2,022.7 69.8
80 45 3,921.0 87.1 13 2,721.1 209.3
2004-1
89 48 4,514.6 94.1 29 2,077.8 71.7
2004-2
86 47 4,142.8 88.2 24 3,225.6 134.4
2004-3
84 46 2,862.2 62.2 27 2,990.4 110.8
2004-4
2004 339 186 15,440.6 83.0 93 11,014.9 118.4
82 46 4,364.9 94.9 10 720.7 72.1
2005-1
80 36 4,791.0 133.1 10 714.1 71.4
2005-2
98 47 4,374.8 93.1 19 1,458.1 76.7
2005-3
87 39 2,563.7 65.7 17 1,568.1 92.2
2005-4
2005 347 168 16,094.4 95.8 56 4,461.0 79.7

2. 104 48 5,384.4 112.2 10 540.8 54.1
2006-1
95 37 3,747.6 101.3 19 2,011.0 105.8
2006-2
90 41 3,769.8 92.0 8 934.2 116.8
2006-3
61 25 3,866.8 154.7 20 1,631.1 81.6
2006-4
2006 350 151 16,768.5 111.1 57 5,117.1 89.8
80 29 4,540.3 156.6 18 2,190.6 121.7
2007-1
81 33 3,837.8 116.3 25 4,146.8 165.9
2007-2
67 34 7,693.7 226.3 12 945.2 78.8
2007-3
2007 228 96 16,071.8 167.4 55 7,282.5 132.4
Thomson Financial & 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.
IPO Activity Overview
The Technology sector saw the majority of venture-backed companies come to the public market with 9
IPO’s raising $684.5 million during the third quarter. This activity represents a decline from the previous
quarter when there were more than twice as many issues accounting for four times the dollar volume. The
largest IPO in the Technology sector in the third quarter was Athenahealth, Inc’s $113.2 million issue,
managed by Goldman Sachs and Merrill Lynch. Athenahealth Inc. provides medical groups with
application and business services such as billing and collections, subscription services, and cost reduction
methods. Venture investors in Athenahealth include Draper Fisher Jurvetson, The Lambda Funds, Oak
Investment Partners, Venrock Associates, Cardinal Partners, Draper Richards, and Granite Global
Ventures.
The Life Sciences industry accounted for the remaining three venture-backed IPO’s during the third quarter
of 2007. The largest issue in this sector, also the largest IPO of the third quarter, was the $202.6 million
issue by Masimo Corporation, a developer, licensor, and marketer of medical signal processing
technologies and products. Venture investors in Masimo include Cardinal Partners, Warburg Pincus, JP
Morgan Partners, Camden Partners, Opus Capital and The Vertical Group.
Venture-Backed IPO Industry Breakdown
Q3 2007
*Number Total
of Venture-
Venture- Backed
Backed Offering
IPOs in Size
Industry the U.S. ($M)
Internet Specific 3 240.4
Communications/Media 3 185.1
Computer Software and Svcs. 2 151.0
Computer Hardware 1 108.0
Technology TOTAL 9 684.5
Medical/Health 2 245.7
Biotechnology 1 15.0
Life
Sciences TOTAL 3 260.7
TOTAL 12 945.2
*Includes all companies with at least one U.S. VC investor that trade on
U.S. exchanges, regardless of domicile

3. The Boston metropolitan region, followed by San Jose and Orange County, had the most venture-backed
companies with IPO exits in 3Q 2007. In Boston, where the IPO dollar volume reached the highest level
across all metro regions, two companies focused in Communications and Media, one focused in Computer
Software and Services, and one focused in Internet Specific technologies. In San Jose, there was one issue
each in the Communications/Media and Computer Software and Services sectors. Orange County, had
offerings in both the Internet Specific and Medical/Health sectors.
3Q 2007 Venture-Backed IPO Metro Region Breakdown
*Number of Total Venture-
Venture-Backed Backed Offering
Metro Region IPO's in the U.S. Size ($M)
Boston 4 308.2
San Jose 2 141.1
Orange County 2 268.2
Other US 4 227.7
TOTAL 12 945.2
*Includes all companies with at least one U.S. VC investor that trade on
U.S. exchanges, regardless of domicile
As of September 27, 2007, 58 percent of the venture-backed companies that went public during the rolling
twelve month period were trading at or above their offering price.
Seventy-two venture-backed companies have filed for an initial public offering with the SEC since 2006
and are currently “in registration.” This marks a significant increase from the previous quarter when 44
venture-backed companies were in registration.
In addition to the U.S. market activity, four companies that received US venture financing went public on
foreign exchanges in the third quarter. These companies include the Bank of Nanjing, a Chinese bank
listed on the Shanghai Stock Exchange, GlobeOp Financial Services, a UK financial services company
listed in the London Stock Exchange, K.P.R. Mill Ltd., an Indian apparel company listed on the Bombay
Stock Exchange, and Motilal Oswal Financial Services, Ltd., an Indian financial services company listed
on the Bombay Stock Exchange.
Merger and Acquisition Overview
In the third quarter of 2007, total disclosed venture-backed M&A dollar volume reached the highest level
since 1Q 2001, when 37 disclosed deals accounted for $7.7 billion in value. Additionally, the average deal
size for disclosed venture-backed M&A transactions has not reached 3Q 2007 levels since the fourth
quarter of 2000.
The Technology sector dominated the venture-backed M&A landscape, with 45 deals with disclosed values
of approximately $3.8 billion. The Computer Software/Services and Internet Specific industries saw 17
and 15 transactions, respectively. The Internet Specific sector reached $2.2 billion in disclosed deal value –
59 percent of the overall value within technology businesses. The Life Sciences and other sectors
accounted for $1.2 billion and $2.7 billion of the total dollar volume, respectively.
Venture-Backed M&A Industry Breakdown
Q3 2007
Number
of
Total
Venture-
Number Backed Disclosed
Venture-
of M&A
Backed
Venture- deals
Backed with a Deal
Value
M&A disclosed
Industry ($M)
deals value

4. Communications/Media 7 2 138.5
Internet Specific 15 7 2236.2
Computer Software and Srvs. 17 6 826.11
Semiconductors 3 3 526.4
Computer Hardware 3 1 60.3
Technology TOTAL 45 19 3,787.5
Medical/Health 5 3 510.5
Biotechnology 3 3 731.3
Life
Sciences TOTAL 8 6 1241.8
Other Products 10 5 1691.4
Consumer Related 2 2 885.0
Industrial/Energy 2 2 88.0
Other TOTAL 14 9 2,664.4
TOTAL 67 34 7,693.7
Source: Thomson Financial & National Venture Capital Association
The largest disclosed deal of the quarter was the $1.4 billion acquisition of Worldspan Technologies,
provider of mission-critical technology services to the global travel industry, by Travelport Inc in August.
The second largest deal was the $775 million acquisition of denim apparel manufacturer and vendor, 7 For
All Mankind, by VC Corp.
Signaling strength in the acquisitions market, deals bringing in the top returns, those with disclosed values
greater than four times the venture investment, accounted for 62.5 percent of the total compared to 22
percent last quarter. Conversely, those deals returning less than the amount invested accounted for 9
percent of the quarter’s total, down from 44 percent of the total last quarter.
“The marked increase in deals garnering top returns reflects acquirors’ confidence in these venture-backed
companies,” said Alex Tan, Global Private Equity Research Manager at Thomson Financial. “Investors
believe these venture-backed companies will be strong performers in the future.”
Analysis of Transaction Values versus Amount Invested
Relationship between transaction value and Q207 Q307
investment M&A** M&A**
Deals where transaction value is less than total
14 3
venture investment
Deals where transaction value is 1-4x total
11 9
venture investment
Deals where transaction value is 4x-10x total
5 13
venture investment
Deals where transaction value is greater than
2 7
10x venture investment
Total Disclosed Deals 32 32
Source: Thomson Financial & National Venture Capital Association
** Disclosed deals that do not have a disclosed total investment amount are
not included.
About Thomson Financial
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solutions to the worldwide financial community. Through the widest range of products and services in the
industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more

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and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
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.