who's getting funded?
DESCRIPTION
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.TRANSCRIPT
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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
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Helping Exceptional Companies Realize Their Full Potential 2 Monmouth 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 In Monmouth Venture Partners
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Helping Exceptional Companies Realize Their Full Potential 3 Monmouth Venture Partners
Acknowledgements
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Helping Exceptional Companies Realize Their Full Potential 4 Monmouth Venture Partners
Macro Trends
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Helping Exceptional Companies Realize Their Full Potential 5 Monmouth Venture Partners
Venture investing is back!
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 6 Monmouth Venture Partners
4 Qs of more deals and $s invested
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 7 Monmouth Venture Partners
$2.5 billion average per month in 2011
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 8 Monmouth Venture Partners
Internet dominates, healthcare rebounds
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 9 Monmouth Venture Partners
Seed deals on an up trend…
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 10 Monmouth Venture Partners
… but still a small % of total funding
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 11 Monmouth Venture Partners
“Super Angels” drive seed stage rebound
Source: TrueBridge Capital Partners “State of the Venture Capital Industry” Summer, 2011
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Helping Exceptional Companies Realize Their Full Potential 12 Monmouth Venture Partners
Reid Hoffman - “Super Angel” personified
• Former PayPal EVP
• Co-founder of LinkedIn
• Prolific angel investor
• Runs $20MM Discovery
Fund for Greylock
Partners
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Helping Exceptional Companies Realize Their Full Potential 13 Monmouth Venture Partners
Seed valuations holding steady
Source: TrueBridge Capital Partners “State of the Venture Capital Industry” Summer, 2011
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Helping Exceptional Companies Realize Their Full Potential 14 Monmouth Venture Partners
Regional Trends
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Helping Exceptional Companies Realize Their Full Potential 15 Monmouth Venture Partners
VC Super Bowl: Giants tie Patriots 3rd Q
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 16 Monmouth Venture Partners
Giants take $ lead 3rd Q, but can’t hold it
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 17 Monmouth Venture Partners
Regardless, NY is a major center for VC
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 18 Monmouth Venture Partners
Where’s the New York $ going?
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 19 Monmouth Venture Partners
New York #2 in Internet investing
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 20 Monmouth 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?”
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Helping Exceptional Companies Realize Their Full Potential 21 Monmouth 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?”
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Helping Exceptional Companies Realize Their Full Potential 22 Monmouth 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
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Helping Exceptional Companies Realize Their Full Potential 23 Monmouth Venture Partners
Representative recent NY financings
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Helping Exceptional Companies Realize Their Full Potential 24 Monmouth Venture Partners
NJ in the Top 10 for VC nationally
Source: PWC MoneyTreeTM 1Q1995 – 4Q2011 Historical Trend Data
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Helping Exceptional Companies Realize Their Full Potential 25 Monmouth 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
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Helping Exceptional Companies Realize Their Full Potential 26 Monmouth 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
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Helping Exceptional Companies Realize Their Full Potential 27 Monmouth 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
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Helping Exceptional Companies Realize Their Full Potential 28 Monmouth Venture Partners
New Jersey among leaders in healthcare
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 29 Monmouth Venture Partners
Where’s the Healthcare $ going?
Source: CB Insights Venture Capital Activity Report Q4 2011
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Helping Exceptional Companies Realize Their Full Potential 30 Monmouth Venture Partners
NJ early stage venture ecosystem
Trien Rosenberg
NJEN
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Helping Exceptional Companies Realize Their Full Potential 31 Monmouth Venture Partners
Representative recent NJ financings
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Helping Exceptional Companies Realize Their Full Potential 32 Monmouth 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
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Helping Exceptional Companies Realize Their Full Potential 33 Monmouth Venture Partners
Discussion, Debate and Q & A
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Helping Exceptional Companies Realize Their Full Potential 34 Monmouth Venture Partners
Thank You
Frank J. Graziano
Managing Partner
Monmouth Venture Partners, LLC
(732) 930-0161