Archive for the ‘venture capital report’ Category
Thursday, July 28th, 2011
 Earlybird Venture Capital today issued “Turning Venture Capital into Wisdom: Why returns in Europe are now outpacing the U.S.,” a 40-page report demonstrating that European venture capital funds have actually generated comparable or better returns than their U.S. counterparts over the period of the last two years.
The report is released amid fevered debate that has taken place regarding the venture capital returns secured in Europe vs. the United States, as well as the spirit of entrepreneurism in both regions.
Earlybird Venture Capital analyzed data from the European Venture Capital Association (EVCA), Dow Jones VentureSource and its own internal fund to come to the finding that, despite the ongoing dampened perception of European venture capital, the last 24 months have seen a better quality of returns for European VCs than for their U.S. counterparts. The report suggests that, after 20 years playing catch-up to the U.S., European venture capital truly has reached an inflection point, with better real performance among key indicators for the first time in history.
Some of those key indicators include:
- Proportionally, Europe venture capital is now producing higher exit multiples than U.S. venture capital, as well as higher capital efficiency.
- Europe has seen some $15 billion in venture-backed liquidity events during the past two years. This represents half of the $30 billion in U.S. venture-backed liquidity events during the same period, yet occurring with only one fifth of the venture funding.
- Since 2005 there have been an impressive 14 venture-backed exits of European start-ups larger than $1 billion — among them Luxembourg’s Skype, Swedish open source company mySQL, British sports betting platform Betfair and German online mortgage broker Interhyp.
- European VC-backed pre-and post-IPO performance also now matches or exceeds that of U.S. counterparts, while a higher share of European VC funds demonstrate top U.S. quartile performance.
“Clearly the message that venture capital is alive and well in Europe hasn’t gotten out. European entrepreneurs and VCs, for one, are notoriously shy about promoting themselves,” commented Jason Whitmire, Partner at Earlybird. “The reality is, there are great venture opportunities in Europe, even if not all deals are making headlines.”
The report is available in its entirety as a Slideshare presentation at: www.slideshare.net/earlybirdjason/earlybird-europe-venture-capital-report.
Tags: Earlybird Ventue Capital, European venture capital retuns outgaining U.S., Report
Posted in Studies, surveys, reports, venture capital report | No Comments »
Tuesday, July 19th, 2011
 Fred Wilson has the top PeekScore among U.S. venture capitalists What is PeekScore?: PeekScore is a rank from 1 to 10, assigned to every person. The higher someone’s score, the “more important” they are on the web. In calculating your PeekScore and updating it often, PeekYou takes into account your known presence and activity on the Internet, including but not limited to; your blogging, participation in social networks, the number of your friends, followers, or readers, the amount of web content you create, and your prominence in the news.
TechJournal South asked PeekYou to do a PeekScore on the 20 most powerful venture capitalists. Top score would be 10.
Here they are:
Tags: Accel Partners, Benchmark Capital, Bessemer Venture Partners, Bob Goodman, David Skok, David Sze, Douglas Leone, First Round Capital, Founders Fund, Fred Wilson, General Catalyst Partners, Greylock Partners, Herry Weller, Highland Capital Partners, Jeremy Levine, Jim Breyer, Joel Cutler, Josh Kpelman, Kevin Efrusy, Marc Andreessen, Matrix Partners, Micael Moritz, New Enterprise Associates, PeekScore, PeekYou, Peter Baris, Peter Fenton, Peter Thiel, Reid Hoffman, Scott Sandell, Sean Dalton, Sequoia Capital, Terry McGuire, top U.S. venture firms, Union Square Ventures, who are the top U.S. venture capitalists
Posted in Internet/New Media, IT, People, venture capital report | No Comments »
Wednesday, April 20th, 2011
 Jeffrey Sohl DURHAM, N.H. – The 2010 angel investor market saw a robust increase in investment dollars following a considerable contraction in investment dollars in 2008 and 2009, according to the 2010 Angel Market Analysis released by the Center for Venture Research at the University of New Hampshire.
Total investments in 2010 were $20.1 billion, an increase of 14 percent over 2009 when investments totaled $17.6 billion. A total of 61,900 entrepreneurial ventures received angel funding in 2010, an increase of 8.2 percent over 2009 investments, and the number of active investors in 2010 reached 265,400 individuals, a small growth of 2.3 percent from 2009.
“The significant increase in total dollars, coupled with the rise in the number of investments, resulted in a larger deal size – 5.4 percent larger – for 2010 compared with 2009. These data indicate that angels have significantly increased their investment activity and are committing more dollars resulting from higher valuations. It appears that a cautious optimism to investing is taking hold.
Noteworthy changes did occur in the critical seed and start-up stage investment landscape,” according to Jeffrey Sohl, director of the UNH Center for Venture Research at the Whittemore School of Business and Economics.
Healthcare services/medical devices and equipment accounted for the largest share of
investments, with 30 percent of total angel investments in 2010, followed by software (16
percent), biotech (15 percent), industrial/energy (8 percent), retail (5 percent) and IT
services (5 percent).
“Industrial/energy investing has remained a significant sector for angels, reflecting a
continued appetite for clean tech,” Sohl said.
Mergers and acquisitions represented 66 percent of the angel exits, and bankruptcies
accounted for 27 percent of the exits in 2010. About half of the angel exits were at a profit
and annual returns for angel’s exits (mergers and acquisitions and IPOs) were between 24
percent and 36 percent, however, these returns were quite variable.
Angels again reduced their investments of seed and start-up capital, with 31 percent of
2010 angel investments in the seed and start-up stage, a decrease of 4 percent from 2009.
Angels also exhibited an increased interest in post-seed/start-up investing with 67 percent
of investments in the early and expansion stage, an increase from 2009. New, first
sequence, investments represented 41 percent of 2010 angel activity, also a decline from
the last year of 6 percent.
“This decrease in seed/start-up stage and first sequence investing is of concern. However,
as existing investments move to an exit and thus reduce the need for follow-on
investments, it is anticipated that angel capital will become available for new seed stage
investments,” Sohl said.
Angel investments continue to be a significant contributor to job growth with the creation of
370,000 new jobs in the United States in 2010, or 6 jobs per angel investment.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
SoutheastVentureConference: www.seventure.org
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Tags: Angel investor market rebounded 2010, Angel Market Analysis, Center for Venture Research, Jeffrey Sohl, University of New Hampshire
Posted in Studies, surveys, reports, venture capital report | No Comments »
Friday, April 15th, 2011
 WASHINGTON, DC – Venture capitalists invested $5.9 billion in 736 deals in the first quarter of 2011, according to the MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters.
Quarterly investment activity increased 5 percent in terms of dollars but fell 11 percent in number of deals compared to the fourth quarter of 2010 when $5.6 billion was invested in 827 deals.
The quarterly deal count represents the lowest number of deals in a single quarter since the third quarter of 2009. However, the first quarter of 2011 marks the first time in four years that the amount invested in the first quarter has shown an increase over the fourth quarter investment amount.
“The first quarter investment total is setting us on a path for a solid level of investing in 2011. While we did see a drop in deal volume, the dollars invested remains strong,” noted Tracy T. Lefteroff, global managing partner of the venture capital practice at PwC US. “Accordingly, we’re seeing an uptick in average deal size, which hit $8.0 million in Q1for the first time since the first quarter of 2007.”
She added, “And, in the first quarter, 14 companies received funding rounds of $50 million or more, with four of those deals worth more than $100 million. We haven’t seen this many deals worth $50 million or more in a single quarter since the third quarter of 2001. This is a clear indicator that VCs are seeing innovative companies walk through their doors and that the entrepreneurial spirit of America is alive and well and thriving.”
“Despite recent hype about both funding gaps and bubbles within the venture capital industry, the first quarter demonstrates an investment pace that is reasonable, rational and relevant to the long term nature of our business,” said Mark Heesen, president of the NVCA. “What we are not seeing this quarter is just as critical as what we are seeing.”
He expalined, “We are not seeing venture capital dollars flooding any particular sectors, including the Internet or clean technology. And we are not seeing a mass exodus from sectors, such as life sciences, where significant challenges lie.”
Also, he said, “What we are seeing is a commitment to funding companies through the various stages of their lifecycles, even in the later stages when capital needs intensify substantially. What this deliberate and prudent pace of investment lacks in hype, it makes up for in sustainability, and we are very encouraged for the coming year.”
The software industry received the highest level of funding with $1.1 billion invested in the first quarter. Clean Tech saw a 26 percent increase in dollars over the fourth quarter last year, reaching $1 billion and the number of deals increased by 11 percent.
Internet-specific companies also received more than one billion dollars with $1.2 billion going into 171 deals in the first quarter, a 19 percent decrease in dollars and an 18 percent decrease in deals from the fourth quarter of 2010 when $1.5 billion went into 208 deals.
Tags: clean tech, deals down, dollars up, Mark Heesen, NVCA, PWC, Q1 2011, software, Tracy Lefteroff, venture captial report
Posted in Energy, Internet/New Media, IT, venture capital report | No Comments »
Tuesday, April 12th, 2011
 Mark Heesen, President, NVCA NEW YORK – Thirty-six US venture capital funds raised more than $7 billion in the first quarter of 2011, according to Thomson Reuters and the National Venture Capital Association (NVCA). This level marks a 76 percent increase, by dollar commitments, compared to the first quarter of 2010, which saw 44 funds raise $4.0 billion during the period.
The first quarter marks the strongest quarter for US venture capital fundraising since the third quarter of 2008 and the best annual start for fundraising in the U.S. since 2001.
“This year will be a defining one as many venture capital firms will be fundraising, some of whom have been waiting for the investor climate to improve before going out,” said Mark Heesen, president of the NVCA. “While it is encouraging to see the increase in dollars this quarter, much of that was driven by several larger, established funds. We would like to see a similar increase in the number of firms successfully closing funds as the year progresses.”
There were 25 follow-on funds and 11 new funds raised in the first quarter of 2011, a ratio of 2.3-to-1 of follow-on to new funds. The largest new fund reporting commitments during the first quarter of 2011 was Tempe, Arizona-based True North Venture Partners, which raised $192 million in its inaugural fund. A “new” fund is defined as the first fund at a newly established firm, although the general partner of that firm may have previous experience investing in venture capital.
VC Funds: New vs. Follow-On
The first quarter of 2011 saw three multi-billion dollar fundraising commitments, led by Bessemer Venture Partners VIII which raised $1.6 billion during the quarter. Sequoia Capital 2010, L.P. raised $1.3 billion and J.P. Morgan Digital Growth Fund raised $1.2
billion. The $1.6 billion commitment for Bessemer Venture Partners VIII marks the largest U.S. venture capital fund commitment since New Enterprise Associates 13, raised $2.2 billion during the second quarter of 2009.
Tags: Mark Heesen, NVCA, Q1 2011, stongest since 2008, Thomson Reuters, up 76 percent since Q1 2010
Posted in Money, venture capital report | No Comments »
Friday, April 8th, 2011
 SAN FRANCISCO- Investments in cleantech, particularly solar, rose by 13 percent over last year’s numbers to $2.57 billion in the first quarter 2011. That’s a trend continuing into the second quarter, if the number of cleantech financings we report is any guide. The first quarter numbers represent the most money invested in cleantech since the third quarter in 2008.
So says a report from San Francisco-based Cleantech Group, a consulting company.
Although the amount invested in cleantech was larger, it went to fewer firms, so venture capitalists are doing fewer but larger deals.
In a conference call, Sheeraz Haji, CEO of the Cleantech Group, said the sector is setting a pace to raise more money this year than at any time since it began tracking the investments in 2002. He said succuessful IPOs by cleantech firms such ast Telsa Motors helps.
Brightsource Energy Inc., which develops solar fields, was the largest single recipient of the $641 million that went to solar firms during the quarter. BrightSource may go for an IPO later this year.
Electric vehicle firms took the next largest slice of the pie: $311 million.
The most active investors in the space were: Kleiner Perkins Caufield & Byers, Khosla Ventures, Vantage Point Venture Partners, and the Google and GE venture capital arms.
TechJournal South is a TechMedia company. TechMedia presents the annual conferences:
SoutheastVentureConference: www.seventure.org
Internet Summit: www.internetsummit.com
Digital East: www.digitaleast.com
Digital Summit: www.digitalsummit.com
Tags: Cleantech Group, Energy, GE, Google, Khosla Ventures, Kleiner Perkins Caufield & Byers, Q1 2011, Sheeraz Haji, solar power, Vantage Point Venture Partners, venture capital
Posted in Energy, venture capital report | No Comments »
Monday, February 21st, 2011
Mark Heesen, President, NVCA NEW YORK – Deal flow increased in venture capital investment during 2010 for the first time in two years and posted the first positive year-over-year gain since 2007, according to the latest MoneyTree Report from the National Venture Capital Association (NVCA) and Pricewaterhouse Coopers.
Venture funds invested 19 percent more at $21.8 billion in 2010 and deals grew by 12 percent, totaling 3,277.
Mark Heesen, president of the NVCA said, “We were clearly in recovery mode and we hope this continues in 2011.” You can catch up with Heesen and hear his latest perspective on the VC industry in person at TechMedia’s fifth annual Southeast Venture Conference in Atlanta March 2-3.
Although venture funding slowed in the last two quarters of 2010, a strong first quarter and better second quarter kept the year’s numbers in positive territory.
Companies landing venture backing for the first time increased 30 percent, which is a good sign that VCs are deploying capital again, after hoarding cash for portfolio firms during the recession.
Software firms grabbed the biggest slice of venture pie last year, with 835 firms getting $4 billion, about a 20 percent increase over 2009.
Clean tech companies saw an increase of 76 percent in dollars invested and the sector tallied 37 percent more deals than in 2009. Clean tech accounted for five of the ten venture deals chalked up in the last quarter of 2010.
The last quarter’s largest deal shows the continuing attraction of social media. Investors poured $200 million in microblogging site Twitter, making it the second largest deal of the year. Only the $350 million invested in California clean tech firm Better Place was larger.
Silicon Valley asserted its continuing dominance and accounted for five of the biggest deals in 2010.
Most sectors saw double-digit increases in investments over 2009, including telecom (up 77 percent) and IT services (up 44 percent).
Internet specific companies saw a 28 percent boost in dollars ($1.2 billion) and was up 14 percent in deals (190).
Tags: clean tech, IT services, Mark Heesen, NVCA, PriceWaterHouseCoopers, software, Southeast Venture Conference, VC deal flow up in 2010
Posted in Internet/New Media, IT, venture capital report | No Comments »
Friday, January 28th, 2011
 SAN FRANCISCO – If the Silicon Valley venture capital environment is an indicator of how things will go nationally, things are looking up…slightly, according to The Silicon Valley Venture Capitalist Confidence Index for the fourth quarter of 2010. In particular, the merger & acquisition and IPO exit markets appear much better than they have been.
The index is based on a December 2011 survey of 35 San Francisco Bay Area venture capitalists, registered 3.75 on a 5-point scale (with 5 indicating high confidence and 1 indicating low confidence.) Mark Cannice, professor of entrepreneurship and innovation, at the University of San Francisco (USF) School of Business and Professional Studies, authors the quarterly report.
This quarter’s index edged up from the previous quarter’s reading of 3.70 confirming the resumption of an upward trend in VC confidence since its low point in Q4 2008.
In the report, Professor Cannice writes, “Evidence of an improving exit environment supported a slight rise in confidence among the venture capitalists that participated in the Q4 survey.”
For example, one of the survey’s respondents, Roy Thiele-Sardina of HighBAR Partners commented, “We are seeing an increased number of M&A transactions which increases the confidence to fund companies that can be acquired.”
Bob Ackerman of Allegis Capital confirmed, “The exit environment for venture-backed companies continues to improve with growing strength in the M&A markets and IPO activity running ahead of last year’s projections.”
Cannice continued, “New technology developments and social trends are creating new market opportunities for entrepreneurs and their venture backers.”
Another VC respondent, Venky Ganesan of Globespan Capital Partners expressed, “Venture capital backed start-ups and financings are seeing a new renaissance and the reason is ‘Clomosol’. No, it’s not a new drug, but rather my coined term for the four major trends powering technology: Cloud, Mobile, Social, and Local. The wealth creation driven by Clomosol will dramatically impact both the local Bay Area economy as well as the overall technology sector…”
Tags: Allegis Capital, Bay Area, Bob Ackerman, Globespan Capital Partners, HighBAR Partners, Mark Cannice, Roy Thiele-Sardina, San Francisco, Silicon Valley, Silicon Valley Venture Capitalist Confidence Index, VC confidence rose in Q4, Venky Ganesan
Posted in Studies, surveys, reports, venture capital report | No Comments »
Friday, January 21st, 2011
WASHINTGON, DC – Venture capitalists invested $21.8 billion in 3,277 deals in 2010, an increase of 19 percent in dollars and a 12 percent rise in deals over the prior year, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), based on data from Thomson Reuters.
Mark Heesen, President, NVCA The rise in venture investments in 2010 represents the first time the annual investment level has increased since 2007. Investments in the fourth quarter of 2010 totaled $5 billion in 765 deals, a 2 percent increase in dollars but a 3 percent decrease in deals from the third quarter of 2010 when $4.9 billion went into 789 deals.
In the Southeast, North Carolina saw VC investing return to pre-recession levels with 57 deals worth more than $456 million, although deals fell precipitously in Q4. Email marketing company iContact had the largest NC deal of the year, raising nearly $40 million.
In Georgia, VCs invested $333 million in 63 deals. Georgia actually saw a spike in Q4 with investments of $100 million in 12 deals, even as many other states saw severe dips in the year’s final quarter.
Double-digit increases in investments in 2010 were spread across almost every industry, including the Clean Technology and Internet-Specific sectors. Investment dollars also increased across every stage of development category, with the exception of a 2 percent decrease in Seed stage investments.
First-time financings rose in 2010 compared to the prior year, however, fourth quarter investing did show a decline in both first-time dollars and deals when compared to Q3 2010.
“The venture capital community found itself in a better position at the end of 2010,” said Mark Heesen, president of the NVCA. “We were clearly in recovery mode with investment levels reflecting the economic reality of our business. Increased investment across a diverse range of sectors highlighted those areas where the greatest opportunities lie, particularly within the Internet, software and clean technology industries.”
He added, “Continued fundraising and exit market challenges have greatly reduced the probability of investment bubbles in specific sectors as there simply is not enough capital to overinflate any particular market. The year’s increase in first time deals and early stage investment is encouraging as this trend suggests that the venture community is doing more with less. We hope this continues in 2011.”
“As expected, we saw the venture capital investment level in 2010 surpass that of 2009,” noted Tracy T. Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers. “And, there were nearly 30 percent more new companies receiving venture capital for the first time in 2010 than in 2009. This bodes well for 2011 as venture capitalists continue to support these new investments as they grow and expand their businesses.”
Expansion and later stage companies raised the most money in Q4 while those landing early stage seed funding dropped 21 percent.
Software companies landed the most funding at $1.2 billion, followed by industrial and energy startups which raised $853 million. Biotechnology firms were third, raising $684.9 million.
Clean tech jumped 74 percent in 2010 with deals worth $765.5 million. The sector has been hot since 2009 except for the third quarter of 2010, when deal flow fell.
MoneyTree Report results, including full regional breakdowns, are available online at www.pwcmoneytree.com and www.nvca.org.
Tags: 2010 venture capital report, Georgia, Mark Heesen, NC, NVCA, PriceWaterHouseCoopers, VC investments increased
Posted in Carolinas, Georgia, Internet/New Media, IT, Money, North Carolina, venture capital report | 1 Comment »
Tuesday, January 18th, 2011
NEW YORK – Thirty-five US venture capital funds raised nearly $3 billion in the fourth quarter of 2010, according to Thomson Reuters and the National Venture Capital Association (NVCA). This level marks a 6% decrease, by dollar commitments, compared to the third quarter of 2010, which saw 49 funds raise $3.2 billion during the period.
The largest new fund reporting commitments during the fourth quarter of 2010 was Raleigh, North Carolina-based NovaQuest Healthcare Investment Fund, L.P., which raised $177 million in its inaugural fund. A “new” fund is defined as the first fund at a newly established firm, although the general partner of that firm may have previous experience investing in venture capital.
For full year 2010, 157 venture capital funds raised $12.3 billion, the fourth consecutive year of declines and the slowest annual period for venture capital fundraising since 2003.
“Given current conditions, a limited number of venture firms will be able to successfully raise new funds in 2011 and many of these will be smaller than previous funds raised,” said Mark Heesen president of the NVCA.
“Yet, the continued downsizing of the venture industry has positive implications for investors and entrepreneurs. An agile venture capital model likely translates into more capital efficient and fewer duplicative deals in the IT arena as well as less capital intensive deals in the life science and clean technology arenas.”
“The most innovative and efficient companies will continue to be funded by the venture community,” continued Heesen. “It is important to reiterate that when it comes to venture capital returns, history has shown that often „less is more.‟
As the year progresses and the exit market continues to improve, we expect better performance from established funds as well as from recently raised funds which have the opportunity to invest in great companies at a time when valuations are more reasonable and the economy as a whole points upward.”
There were 24 follow-on funds and 11 new funds raised in the fourth quarter of 2010, a ratio of 2.2-to-1 of follow-on to new funds.
The largest new fund reporting commitments during the fourth quarter of 2010 was Raleigh, North Carolina-based NovaQuest Healthcare Investment Fund, L.P., which raised $177 million in its inaugural fund. A “new” fund is defined as the first fund at a newly established firm, although the general partner of that firm may have previous experience investing in venture capital.
Tags: 2010 venture capital fund raising falls, Mark Heesen, Naitonal Venture Capital Association, NC, NovaQuest, Raleigh
Posted in Carolinas, North Carolina, venture capital report | No Comments »
Friday, October 15th, 2010
NEW YORK – Venture capitalists invested 31 percent fewer dollars in companies during the third quarter of 2010 compared to the second quarter, with the number of deals falling 19 percent, according to the MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association based on data provided byThomson Reuters.
At TechJournal South, we have noticed a distinct drop in the number of funding deals in the Southeast. Unless the trend changes between now and the end of the year, we suspect the numbers could be worse for the fourth quarter.
Venture capitalists invested $4.8 billion in 780 deals in the third quarter of 2010. The decrease in dollars invested was in large part due to the absence of large rounds in the Clean Technology sector, which drove last quarter’s higher investment levels. Yet with few exceptions, investment in all industry sectors slowed this quarter.
Still, venture investors continued to invest more into first-time deals versus follow-on rounds, the report says. That’s a good trend, because during the recession, many VC firms keep dry powder for follow-on rounds in their portfolio companies and reduced the number of their new investments.
“While overall funding in traditionally strong sectors like Life Sciences and popular Clean Technology were down, Biotechnology continued to bring in significant funding while Software took the lead as the top generator of VC dollars in Q3,” said Tracy T. Lefteroff, global managing partner of the venture capital practice at PwC. “Compared to the third quarter of 2009, investing remained relatively flat; however, despite declines for the quarter, funding remains on course to pass investment levels of 2009.”
Mark Heesen, president of the NVCA, looked for positive signs in the third quarter numbers.
“Despite investment declines, there are reassuring signs of stability in the third quarternumbers,” he said. “While the burgeoning clean
technology industry will experience significant investment volatility as the sector matures, the established software and life sciences sectors continue to benefit from a steady commitment of venture capital dollars being put to work within meaningful pockets of innovation.”
He added, “Cloud computing, social media and security continue to show tremendous promise on the IT side while medical advances abound in biotechnology and medical device fields. But what is even more reassuring is that first time financings are holding strong, evidencing that venture investors are making a steady stream of new bets and filling the innovation pipeline, driving our industry and our future economy.”
Industrywise, software regained its position as the number one sector for investment with $1 billion going into 190 rounds. Even that is a 13 percent decrease in dollars and a 21 percent decline in deal volume from the second quarter.
The Biotechnology industry received the second highest level of funding for all industries in the quarter with $944 million going into 108 deals. This level of investment represents a 32 percent decrease in dollars and a 29 percent decrease in deals.
The Clean Technology sector, which crosses traditional MoneyTree industries andcomprises alternative energy, pollution and recycling, power supplies and conservation, saw a 59 percent decrease in dollars to $625 million compared to the second quarter
when venture capitalists invested $1.5 billion. The number of Clean Technology deals completed in the third quarter also declined by 26 percent to 58 deals compared with 78 deals in the second quarter.
For the complete data, including regional breakdowns see the NVCA site.
Tags: Biotech, clean energy, NVCA, PriceWaterHouseCoopers, Q3 VC funding falls, software, Thomson Reuters
Posted in Energy, Internet/New Media, IT, Studies, surveys, reports, venture capital report | No Comments »
Thursday, July 29th, 2010
Mark Heesen, President, NVCA ARLINGTON, VA – Exit markets have improved gradually but steadily in 2010, which is in evidence from the number of M&A deals we’ve seen and even a handful of IPOs slipping through open windows in a volatile market, boosting short-term venture capital performance in the first quarter 2010. But ten-year returns continue to decline. So says the Cambridge Associates U.S. Venture Capital Index, the National Venture Capital Association’s quarterly report on venture returns.
Mark Heesen, NVCA president said, “Top firms continue to perform well above the index but that band has narrowed over the last several years, fostering the Darwinian environment in which the venture industry is operating,” added Heesen. “We will need several quarters of healthy and viable IPOs and M&As to widen that pool of top performers and move returns back to the historical levels expected by our investors.”
The improving exit market helped limited partners in venture funds see some gains this year.
Peter Mooadian of Cambridge Associates said that if exit markets continue to improve, the decline in ten year returns should return to break-even or “modestly positive territory” by the second half of 2011.
For the full report see: National Venture Capital Association
Tags: Cambridge Associates, Mark Heesen, NVCA, Q1 2010, venture returns
Posted in venture capital report | No Comments »
Friday, July 16th, 2010
 WASHINGTON, DC – Venture capitalists invested $6.5 billion in 906 deals in the second quarter of 2010, according to the MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters.
Quarterly investment activity increased 34 percent in terms of dollars and 22 percent in number of deals compared to the first quarter of 2010 when $4.9 billion was invested in 740 deals. In the first half of 2010, venture capital (VC) investments totaled $11.4 billion going into 1,646 deals, a 49 percent increase in dollars and a 23 percent increase in deals from the first half of 2009 when $7.7 billion was invested in 1,340 deals.
Clean energy investments break record
Dollars invested in the Clean Technology sector doubled in the second quarter compared to Q1 of 2010, breaking the quarterly record for the sector.
The Life Sciences sector (biotechnology and medical device industries combined) saw a notable increase in VC investing during the second quarter, jumping 52 percent in dollars and 36 percent in deals from the prior quarter to $2.1 billion going into 234 deals.
Seed and early stage deals also increased notably in Q2 from prior quarters, accounting for a greater percentage of total deals. Mark Heesen, NVCA President said, “As the exit market begins to show signs of life, venture capitalists are now able to look increasingly at new investments outside their existing portfolio.
“This dynamic translates into momentum in the seed and early stage sectors where valuations remain reasonable and opportunities are great. Investment in the clean technology and life sciences sectors, which are generally longer term and more capital intensive in nature, are balanced by smaller deals within the information technology sectors creating a diversity of opportunities for success for entrepreneurs, VCs and limited partners alike.”
Total over $6B first time since 2008
“Venture capitalists are feeling more positive about the economic outlook for investment, based upon the jump we saw in VC funding this quarter,” noted Tracy T. Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers.
“The quarterly investment total surpassed the $6 billion mark for the first time since Q3 2008 and the number of deals was the highest we’ve seen since Q4 of 2008.
“The rise in companies lining up to go public in the Life Sciences space in Q2 was also a likely driver of the strong rebound we saw in investing in this sector during the quarter.
“And, a $350 million deal, the biggest deal in the second quarter, pushed the Clean Technology sector to its highest total on record. If the markets remain positive, we’ll likely continue to see robust investment levels for the remainder of the year, with VC funding in 2010 poised to surpass 2009 levels.”
North Carolina saw 14 deals worth more than $130 million. In South Carolina, two deals were worth $4.2 million.
Georgia saw 17 deals that totaled $34 million in investments.
Full reports and regional breakdowns are available at NVCA.
Contact Tech Journal South Editor and writer Allan Maurer: Allan at TechJournalSouth dot com.
Tags: NVCA, PWC, quarterly venture capilal report, Thomson Reuters, Venture investing up in Q2 2010
Posted in Carolinas, Georgia, North Carolina, South Carolina, Studies, surveys, reports, venture capital report | No Comments »
Monday, July 12th, 2010
M WASHINGTON, DC – Venture capital fund raising dropped precipitously in the second quarter this year to the the lowest level since 2003, according to the National Venture Capital Association and Thomson Reuters.
In a 49 percent drop from the first quarter this year, 38 funds raised only $1.9 billion.
NVCA President Mark Heesen says its a trend fired by “Ongoing economic uncertaintay,” which has “kept many limited partners and venture firms on the fund raising sidelines in 2010.”
He said they are likely to remain hesitant for the remainder of this year.
“Recent positive activity in the exit market , particularly on the M&A side, could generate some meaningful cash distributions which would pave the way for firms looking a receptive investor base. However, the pipeline of venture firms that are poised to raise their next fund continues to grow and could result in a crowded market in 2011 and beyond,” he said.
Venture funds have raised a total of $5.65 billion so far in 2010.
Tags: DC, NVCA, Q2 2010 venture fund raising drops, Thomson Reuters, Washington
Posted in Money, venture capital report | No Comments »
Friday, July 2nd, 2010
 Cleantech continues to be a hot investment area, with venture investments matching the last 2010 quarter at $2.04 billion and up 43 percent over a year ago in Q2 2010, with a resurgence in solar leading the parade, according to The Cleantech Group.
The number of deals recorded in 2Q10 was down from a record high of 192 in 1Q10, but still represents a strong quarter by historic standards.
“In spite of the persistence of wider concerns about the strength and sustainability of the global recovery, the strong flow of investment dollars to cleantech growth companies has continued in 2Q10, with cleantech venture investment in the first half of 2010 edging slightly ahead of the record total recorded during the first half of 2008 [$4.04 billion versus $4.02 billion],” said Richard Youngman, head of global research at the Cleantech Group.
“Key to this has been the resurgence of solar, and a high volume of follow-on rounds, including many blockbuster deals, which are, in part, a response to the lackluster and unpredictable state of the cleantech IPO market. Goldwind and Solyndra’s recent IPO withdrawals have been the norm of late, and Tesla’s trend-bucking triumph the exception.”
Corporate activity around cleantech innovation has continued to play an important role in maintaining the levels of investment activity. Corporations are becoming key participants in many of the largest venture and growth capital investment rounds.
“The significant strengthening of corporate and utility investment into the cleantech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adoption of clean technologies at scale,” said Scott Smith, partner, Deloitte & Touche and Deloitte’s clean tech leader in the United States.
“Major U.S. utilities are increasing direct investments in wind and solar due to improving cost scenarios, favorable tax credits and incentives, and evolving pressure to meet Renewable Portfolio Standards. Meanwhile, the largest global companies are seeing the business case for operational cleantech integration, leading to record corporate investment. ”
The leading sector in the quarter by amount invested was solar ($811 million), followed by biofuels ($302 million) and smart grid ($256 million). Energy efficiency was the most popular sector measured by number of deals, with 31 funding rounds, ahead of solar (26 deals) and biofuels (13 deals).
Tags: cleantech venture investments, Energy, energy efficiency, Q2 2010, solar, The Cleantech Group, wind
Posted in Energy, Studies, surveys, reports, venture capital report | No Comments »
Wednesday, June 23rd, 2010
 WASHINGTON, DC – Venture investors look for proven, venture-backed CEOs and strong management teams as the number one factor in whether to fund a company, says a new study from executive search consulting firm Spencer Stuart and the National Venture Capital Association (NVCA).
While some new VC attitudes are apparent from the study, we’ve heard the mantra that the management team is their first consideration in making an investment for some time now. Many VCs have told us that a good team can take an ok idea and make it work, while the wrong team can drive a great idea into the ground.
The new study reveals a number of trends and best practices that have changed for VC-backed portfolio company leadership over the past decade:
– People remain paramount. In both the 2001 and 2010 studies, venture capitalists considered the strength of the management team as the most important factor in deciding whether to fund a venture, followed by market sector. Proprietary product or service and business model both trailed slightly behind market sector.
– Vision and fundraising are more important skills for CEOs today. Vision ranked fourth among important CEO skills in 2010, but only seventh in the 2001 study. Fundraising ranked fifth in 2010 up from eighth in 2001.
Both results reflect shifting priorities in an environment where both raising funds and the path to liquidity have become more challenging for VC-backed companies.
– Venture capitalists favor proven venture-backed CEO talent. When seeking talent for emerging sectors (such as clean technology) with a limited CEO pool, 2010 survey respondents clearly favored proven venture-backed CEOs from unrelated sectors (58%) over sector entrepreneurs with no CEO experience (31%) or industry leaders from large companies who lack experience in an entrepreneurial environment (11%).
VC-backed CEOs earning more
– VC-backed CEOs earn more than they did 10 years ago. Forty-seven percent of respondents said that they are paying CEOs greater cashcompensation and granting more equity. VCs say this is because of the longer-term nature of the role today and because today’s CEO roles require executives with a broader skill set.
– Venture capitalists are recruiting more independent board members. Seventy-five percent of those surveyed said they are recruiting more independent/outside board members now that they face a longer path to liquidity.
– Investors are growing more confident in their executive assessment practices. Only 4 in 10 venture professionals in 2001 agreed that
their firms recruit the best talent, consistently and thoroughly assess management teams and remove low performers quickly.
In 2010, 84 percent agreed that their firms recruit the best talent, 63 percent agreed that they consistently and thoroughly assess management teams, and 67 percent agreed that they remove low-performing CEOs from portfolio companies quickly.
– Yet opportunities exist for VC firms to assess management in a more rigorous, ongoing way. While 2010 respondents are diligent about assessing the management team before investment, only 25 percent agreed that they conduct formal, ongoing management assessments after the hire. In part, this is because VCs feel that they already link the CEO’s goals and accomplishments to their compensation structure. But it also highlights what could be the area of greatest potential improvement for talent management in the industry.
CEOs need skills focused on longer runway
“The challenging exit market has changed the role of top executives at venture-backed companies, as different skills are required during various stage of company growth,” said NVCA President Mark Heesen. “Today’s venture-backed CEOs will need leadership skills that address a longer runway to liquidity, creating a need for a more systematic performance evaluation over time.”
The study also revealed that these longer timeframes to liquidity are spurring VCs to develop boards of directors that more closely resemble those of public companies, with more independent directors brought on for specific expertise that strategically complements the rest of the board.
“As they strive to build their next generation of game-changing companies, VCs are starting to take a more scientific approach to recruiting and assessing CEOs and directors,” said Spencer Stuart consultant and study contributor Ben Holzemer.
“As they face mounting challenges, firms also have a tremendous opportunity to become more successful in selecting the innovative, entrepreneurial leaders who can guide the industry profitably into the future.”
For the complete study results see: www.nvca.org.
Tags: CEO pay, management teams, NVCA, Spencer Stuart
Posted in People, Studies, surveys, reports, venture capital report | No Comments »
Thursday, May 6th, 2010
 NEW YORK – Clean tech grabbed $773.3 million from venture capitalists in the first quarter of 2010, soaring 68 percent from the same period last year, according to Dow Jones VentureSource.
Clean tech firms did twice as many deals-72-in the quarter as last year.
The recovery for the sector is leading venture capital overall, which grew only 11 percent over last year’s numbers.
The largest number of clean tech deals were in seed and early stage companies, which accounted for 34 transactions and 49 percent of the total, marking the highest percentage since Q4 2008.
The energy efficiency subsector, which includes numerous Southeast and Mid-Atlantic players, accounted for 28 percent of the investments in 20 deals.
Electric vehicle tech also drew some investment money as did energy supply, both also seeing increases.
That should be good news for Atlanta’s Wheego Electric Cars Inc., which his filed it’s intent to raise $5 million with the U.S. Securities and Exchange Commission.
The company raised $1.2 million in August and released it’s two-seat Electric car the Whip last year.
Tags: Atlanta, clean tech, Dow Jones VentureSource, electric cars, Q1 2010, venture report, Wheego
Posted in Energy, Georgia, venture capital report | No Comments »
Wednesday, April 7th, 2010
 NEW YORK – Venture firm fund raising hit $4.11 billion in the first quarter of this year, a 41 percent gain over the first quarter last year, according to Dow Jones Venture Source.
Seventeen multi-stage venture funds raised $3.1 billion of the total, while 16 early stage funds raised less than $1 billion.
The venture industry is coming off a 6-year fundraising low in 2009 when the industry fundraising was down 53 percent, which was still less than the 68 percent drop experienced by the private equity fundraising overall.
Across the U.S. private equity spectrum, which includes venture funds, 97 funds raised $17.6 billion during the first quarter, down 8% from the same period during 2009.
“Venture is showing an up tick from a very low level,” Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst. “This performance is also thanks to established firms locking in sizable closes.”
“The fundraising total is negligible, but the story behind the numbers is telling. Many commitments made during the first quarter were to funds early in their fundraising process unlike the same period last year when many closes were holdovers from 2008. We are seeing that limited partners are willing to put what they have to work, though they may not have much to invest,” said Rosa.
“Limited partners are hedging their bets by choosing multi-stage funds,” added Rossa. “They are reluctant to dive too heavily into early-stage funds which can take longer to produce returns or later-stage funds which will remain unattractive until the liquidity markets hit their stride again.”
The venture industry’s biggest closes came from Battery Ventures’ ninth fund and Oak Investment Partners’ 13th fund which both locked in $750 million for their multi-stage funds during the first quarter.
Tags: Dow Jones, Q1 2010, venture fund raising
Posted in venture capital report | No Comments »
Thursday, March 25th, 2010
 The National Association of Seed and Venture Funds along with the Fox School of Business at Temple University is conducting its second annual survey of the environment for seed and early stage investments.
“We have developed two short surveys to provide government officials and the media with the critical information they need to advocate for increased seed and early stage capital,” NASVF says.
Investor Survey - This survey is for angel, seed or venture capital investors: http://www.surveymonkey.com/s/Investors
Professional Support Survey – This survey is for professional service providers, university/federal technology transfer groups and economic development professionals. http://www.surveymonkey.com/s/ProfessionalSupport
“Everyone benefits through strong participation and we will share the results with those who participate,” the organization says.
Tags: National Association of Seed and Venture Funds, survey
Posted in Studies, surveys, reports, venture capital report | No Comments »
Monday, February 1st, 2010
 WASHINGTON, DC – Venture capital performance improved slightly in the shortest and longest time horizons ending September 30, 2009 but continued to deteriorate in the 5 and 10-year periods ending in the quarter, according to the Cambridge Associates U.S. Venture Capital Index, the performance benchmark of the National Venture Capital Association.
The 10-year return fell to 8.4 percent from 14.3 percent in the previous quarter – and from 40.2 percent one year earlier.
The decline was not unexpected as the lucrative 1999 exits are no longer included in the 10-year calculation. The 5-year returns also declined to 4.9 percent from 5.7 percent in the previous quarter and from10.7 percent one year ago.
Impact of Net bubble took a decade
“It has taken a full decade after the technology bubble burst for the venture industry to fully realize the impact of that era and its aftermath,” said Mark Heesen, president of the NVCA.
“The significant returns created by the robust exit markets of the late1990s have carried the industry for a long period of time. The new reality is much more somber for many venture firms. There are still healthy returns to be made in venture capital, but until the venture community seesa more vibrant exit market we do not expect marked improvement overall.”
Peter D. Mooradian at Cambridge Associates, said, “The exit markets have displayed some welcome signs of life in recent months, and we have noted a more upbeat outlook among a number of GPs with respect to potential exits. That said, exits have not recovered to a level that can support healthy venture capital returns, and it remains to be seen if recent activity will evolve into more sustainable momentum in 2010.”
Tags: NVCA, third quarter, venture capital, venture capital returns
Posted in Money, Studies, surveys, reports, venture capital report | No Comments »
|
|
|
