2q 2013 venture capital rundown presentation slide deck try the pitchbook platform: email:...
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2Q 2013Venture Capital Rundown
Presentation Slide Deck
Try the PitchBook Platform:Email: demo@pitchbook.com Phone: 1-877-267-5593
Consult the Research Team:Email: research@pitchbook.comPhone: 1-877-636-3496
Source:PitchBook
The PitchBook Platform
REQUEST A DEMO:demo@pitchbook.com
1-877-267-5593
Source:PitchBook
Since hitting an all-time high in 2Q 2012, VC investment in U.S.-based companies has decelerated for three consecutive quarters.
Source:PitchBook
VC Deal-Making Declined for a Third Straight Quarter, Hitting the Lowest Level in More Than 2
YearsU.S. VC Deal Flow by Quarter
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2009 2010 2011 2012 2013
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
0
200
400
600
800
1,000
1,200
$5.1 $5.4 $5.6 $5.2 $6.0 $6.7 $5.7 $5.9 $9.2 $8.6 $9.0 $7.8 $7.5 $8.7 $7.0 $6.4 $6.3
669 617 664722 734
809755
792
964 966937
874
1,0131,075
919807
753
Capital Invested ($B) # of Deals Closed
Source:PitchBook
Early Stage Deals Have Shrunk as a Proportion of Overall VC Activity in Recent Years
VC Deal Flow (count) by Stage
1Q 2013
4Q 2012
3Q 2012
2Q 2012
1Q 2012
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Angel & Seed Early Stage
Source:PitchBook
Angel & Seed Rounds
Source:PitchBook
Angel & Seed Financings Have Held Relatively Steady, Helping Increase Their Share of VC Deal
Flow to 29%Angel & Seed Deal Flow by Quarter
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2009 2010 2011 2012 2013
$0
$50
$100
$150
$200
$250
$300
0
50
100
150
200
250
300
$63 $35 $51 $61 $71 $78 $74 $106 $161 $158 $161 $178 $184 $230 $266 $235 $196
8151 61 69
11292
111 109
185160 160
173
243264
235
204
219
Capital Invested ($M) # of Deals Closed
Source:PitchBook
Software Remains the Most Active Sector, But Angel & Seed Investors Have Been Exploring
Other SectorsAngel & Seed Deals (count) by Sector
1Q 2013
4Q 2012
3Q 2012
2Q 2012
1Q 2012
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Software
Commercial Services
Media
Retail
B2C Services
Other
Source:PitchBook
The Median Round Amount was Just 14% of the Median Pre-Money Valuation, the Lowest Since 1Q
2009Angel & Seed Median Pre-Money Valuation and Round Amount
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2011 2012 2013
$0
$1
$2
$3
$4
$5
$6
$3.53
$4.78
$4.01
$4.70
$3.93
$4.63 $4.57 $4.37
$5.38
$0.64 $0.75 $0.77 $0.80 $0.64 $0.75 $0.86 $1.00$0.75
Median Pre-Money Valuation ($M)
Source:PitchBook
Virtually All of the Recent Increase in Angel & Seed Rounds Can be Attributed to a Rise in Seed
FinancingsDeal Count of Angel vs. Seed Rounds
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2010 2011 2012 2013
0
50
100
150
200
250
Angel Rounds Seed Rounds
Source:PitchBook
Early Stage Rounds
Source:PitchBook
Early Stage Deals Hit a Four-Year Low with $2.0 Billion Invested Through 295 Financings in 1Q
2013Early Stage Deal Flow by Quarter
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2009 2010 2011 2012 2013
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
0
100
200
300
400
500
600
$1.8 $2.4 $2.1 $2.4 $2.5 $2.1 $2.6 $2.1 $2.9 $2.7 $3.4 $3.1 $2.5 $3.0 $2.4 $2.2 $2.0
318 307 329375
360393
371391
473442444 438
481497
411
344
295
Capital Invested ($B)
Source:PitchBook
Software Continues to be the Mainstay of Early Stage Investing
Early Stage Deals (count) by Sector
1Q 2013
4Q 2012
3Q 2012
2Q 2012
1Q 2012
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Software
Commercial Services
Pharma & Biotech
HC Devices & Supplies
Media
Other
Source:PitchBook
The Median Pre-Money Valuation has Shifted Fairly Significantly From Quarter-to-Quarter
Early Stage Median Pre-Money Valuation and Round Amount
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2011 2012 2013
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$8.4
$11.0
$13.8
$11.7$10.8
$13.1 $12.2
$15.6$14.5
$3.3 $3.3$4.1
$3.3 $3.0 $3.4 $3.5$4.2 $4.0
Median Pre-Money Valuation ($M)
Source:PitchBook
The Median Time Between Angel & Seed Funding and the First Early Stage Round Jumped 4 Months
in 1Q 2013Median Time Between Angel & Seed and Early Stage Rounds
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2011 2012 2013
0.6
0.7
0.8
0.9
1
1.1
1.2
1.3
0.98
0.910.94
1.031.06
1.00 1.01
0.89
1.22
Ye
ars
Source:PitchBook
Late Stage Rounds
Source:PitchBook
Late Stage Financings Have Been in Decline, But the Downturn is Not as Severe as in Early Stage
DealsLate Stage Deal Flow by Quarter
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2009 2010 2011 2012 2013
$0
$1
$2
$3
$4
$5
$6
$7
0
50
100
150
200
250
300
350
400
$3.3 $3.0 $3.5 $2.7 $3.4 $4.5 $3.0 $3.7 $6.2 $5.7 $5.4 $4.5 $4.9 $5.5 $4.3 $3.9 $4.1
270 259 274 278262
324
273292
306
364
333
263289
314
273259
239
Capital Invested ($B)
Source:PitchBook
Other Leading Sectors Besides Software Continue to Grow in Importance
Late Stage Deals (count) by Sector
1Q 2013
4Q 2012
3Q 2012
2Q 2012
1Q 2012
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
Software
HC Devices & Supplies
Commercial Services
Pharma & Biotech
Media
Other
Source:PitchBook
The Median Pre-Money Valuation Rose Significantly in the Last Year While the Median
Round Amount was FlatLate Stage Median Pre-Money Valuation and Round Amount
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2011 2012 2013
$0
$10
$20
$30
$40
$50
$60
$70
$80
$39.3
$57.9
$40.6
$50.8 $49.7 $46.3
$64.5
$52.1
$67.8
$8.8 $9.4 $10.0 $8.9 $10.0 $10.1 $10.6 $10.0 $10.0
Median Pre-Money Valuation ($M)
Source:PitchBook
Commercial Services has More Than Doubled Its Share of Late Stage Deal-Making in the Last Year
Commercial Services as % of Late Stage Deals
1Q 2012 1Q 20130%
2%
4%
6%
8%
10%
12%
14%
6.2%
11.7%
4.0%
10.4%
Deal Flow % Capital Invested %
Source:PitchBook
First Financings
Source:PitchBook
After Hitting a Zenith in 1Q 2012, the Number of First Financings Has Been in Free Fall
First Financings from Top Sectors
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2010 2011 2012 2013
0
50
100
150
200
250
300
350
400
450
254 227
250 261
380
312 329 324
427
395
324
288 261
Other
Pharma & Biotech
Commercial Services
Media
Software
Series6
Source:PitchBook
The Median Pre-Money Valuation for First Financings Has Swung Widely from Quarter-to-
QuarterFirst Financing Median Pre-Money Valuation and Round
Amount
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2010 2011 2012 2013
$0
$1
$2
$3
$4
$5
$6
$7
$8
$6.4
$5.6
$4.5
$5.1
$6.0$5.7
$5.4
$6.1
$5.4$5.4
$7.5
$5.9
$6.8
$1.7$1.2 $1.3 $1.5 $1.3 $1.3 $1.3 $1.3
$1.0 $1.1 $1.2 $1.2 $1.0
Median Pre-Money Valuation ($M)
Source:PitchBook
VC Deal Flow Details
Source:PitchBook
All of the Most Active Regions for VC Investing Saw a Slowdown in 1Q 2013
VC Deals (count) by Region
19%
1%4%
13%
7%5%3%
48%
17%
2%
4%
12%
7%
6%4%
49%
Mid-Atlantic
Midwest
Mountain
New England
Great Lakes
South
Southeast
West Coast
4Q 2012
1Q 2013
Source:PitchBook
Despite the Slowdown in Overall Deal-Making, VC Investing in Many of the Most Active Sectors Held
SteadyVC Deals (count) by Sector
41%
11%8%6%
7%
26%43%
11%
8%
7%
5%
26%Software
Commercial Services
Media
HC Devices & Supplies
Pharma and Biotech
Other
4Q 2012
1Q 2013
Source:PitchBook
The Median Pre-Money Valuation is Substantially Higher in Software and Media Than Most Other
SectorsMedian Pre-Money Valuations ($M) by Sector from 1Q 2012 to
1Q 2013
All Sectors Software Media Commercial Services
$0
$10
$20
$30
$40
$50
$60
$70
$80
$4.5 $4.6 $4.2 $4.5
$13.2 $14.0 $11.8 $12.9
$52.2
$68.8 $68.2
$30.2
Angel & Seed Early Stage Late Stage
Source:PitchBook
VC Exits
Source:PitchBook
Exit Flow Sank 25% and Capital Exited Cratered 84% in
1Q 2013 to the Lowest Levels Seen Since 2009VC Exits by Quarter
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2008 2009 2010 2011 2012 2013
$0
$5
$10
$15
$20
$25
0
20
40
60
80
100
120
140
160
180
$2.3$14.0$2.5 $2.7 $1.4 $3.4 $2.2 $6.2 $6.5 $3.4 $5.8 $7.3 $6.0 $6.7 $6.0 $7.9 $4.9$21.6$8.4$10.5$1.7
90 7993
7386
7992
114124
118
142
162
151
116
141
115133138 136
124
93
Capital Exited ($B) # of Exits
Source:PitchBook
Virtually All of the Decline in Exits in 1Q 2013 Can be Attributed to Weakness in Corporate
AcquisitionsVC Exits (count) by Exit Type
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q2011 2012 2013
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Acquisition IPO Buyout
Source:PitchBook
VC Fundraising
Source:PitchBook
VC Fundraising Continues to be a Slog, With Just 13
U.S-Based Funds Closing on $3.3 Billion in 1Q 2013
VC Fundraising by Quarter
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2008 2009 2010 2011 2012 2013
$0
$2
$4
$6
$8
$10
$12
$14
$16
0
10
20
30
40
50
60
70
80
$14.1 $6.8 $5.0 $2.1 $5.2 $1.3 $3.5 $2.6 $8.7 $2.0 $3.0 $3.7 $5.3 $5.5 $1.6 $6.3 $7.6 $3.8 $6.3 $1.8 $3.3
73
24
2116
35
10
20
9
29
1621 18
14 14 1316
28
21
28
1213
Capital Raised ($B)
Source:PitchBook
The 4 Largest Vehicles Attracted 60% of the Capital Raised in 1Q 2013
VC Fundraising (count) by Fund Size
2008 2009 2010 2011 2012 20130%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
$1B+
$500M-$1B
$250M-$500M
$100M-$250M
$50M-$100M
Under $50M
**as of 3/31/2013
Source:PitchBook
Most Active Angel & Seed Investors in 1Q 2013
By Count of Closed U.S. Deals
Y Combinator 19 First Round Capital 4500 Startups 18 Greylock Partners 4Andreessen Horowitz 9 Lightbank 4MuckerLab 8 Resolute.vc 4SV Angel 8 Atlas Venture 3Connecticut Innovations 6 Capital Innovators 3Fortify Ventures 6 Cowboy Ventures 3TechStars 6 Felicis Ventures 3Acceleprise 5 ff Venture Capital 3Blueprint Health 5 Founders Fund 3CrunchFund 5 Harrison Metal Capital 3Google Ventures 5 Launchpad LA 3Great Oaks Venture Capital 5 Quotidian Ventures 3Portland Seed Fund 5 Trinity Ventures 3
Source:PitchBook
Most Active Early Stage Investors in 1Q 2013
By Count of Closed U.S. Deals
Bessemer Venture Partners 9 Lightspeed Venture Partners 5First Round Capital 8 True Ventures 5Kleiner Perkins Caufield & Byers 8 Baseline Ventures 4New Enterprise Associates 8 Charles River Ventures 4500 Startups 7 CrunchFund 4Andreessen Horowitz 7 Draper Associates 4Google Ventures 7 Draper Fisher Jurvetson 4Greylock Partners 7 Founder Collective 4Intel Capital 6 Harrison Metal Capital 4Siemer Ventures 6 Norwest Venture Partners 4SV Angel 6 RRE Ventures 4Highland Capital Partners 5 Sequoia Capital 4Lerer Ventures 5 Third Rock Ventures 4
Source:PitchBook
Most Active Late Stage Investors in 1Q 2013
By Count of Closed U.S. Deals
Intel Capital 8 FirstMark Capital 4InterWest Partners 6 Flybridge Capital Partners 4Kleiner Perkins Caufield & Byers 6 Google Ventures 4Norwest Venture Partners 6 Greylock Partners 4Sequoia Capital 6 Khosla Ventures 4Menlo Ventures 5 Mayfield Fund 4New Enterprise Associates 5 Shasta Ventures 4Qualcomm Ventures 5 True Ventures 4Accel Partners 4 US Venture Partners 4Advanced Technology Ventures 4 VantagePoint Capital Partners 4Baird Venture Partners 4 Versant Ventures 4Delphi Ventures 4 Vulcan Capital 4Draper Fisher Jurvetson 4
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