shaking the moneytree™ q3 2014 update pricewaterhousecoopers/national venture capital association...

Shaking the MoneyTree™Q3 2014 Update

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PricewaterhouseCoopers/National Venture Capital Association MoneyTreeTM Report, based on data from Thomson Reuters

PwC 2PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, based on data from Thomson Reuters

PricewaterhouseCoopers/National Venture Capital Association MoneyTreeTM report, based on data from Thomson ReutersBy Name:


About the report

• PricewaterhouseCoopers and the National Venture Capital Association produce the MoneyTree Report™, based on data from Thomson Reuters

• ‘Core’ measure of equity investments in venture-backed companies in the United States

• Companies have received at least one round of financing, involving a professional VC firm or equivalent

• Captures: tranches, not term sheets, foreign VCs, qualified private placement

• Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc.

• MoneyTree™ Report in its 20th year

• Results online at www.pwcmoneytree.com and www.nvca.org

PwCPricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, based on data from Thomson Reuters

2010 2011 2012 2013 2014$0.0

$2,000,000,000.0

$4,000,000,000.0

$6,000,000,000.0

$8,000,000,000.0

$10,000,000,000.0

$12,000,000,000.0

$14,000,000,000.0

$16,000,000,000.0

$5,110,359,200.0

$6,534,193,100.0 $6,330,925,000.0 $6,070,155,400.0

$9,762,356,200.0

$7,113,520,100.0

$8,249,655,300.0$7,463,078,300.0 $7,213,392,100.0

$13,495,900,000.0

$5,497,109,900.0

$7,531,581,900.0$6,681,062,200.0

$7,979,124,300.0

$9,913,005,600.0

$5,673,584,200.0

$7,490,808,300.0$7,027,471,100.0

$8,526,081,100.0

Q1 Q2 Q3 Q4

MoneyTree total investments: Q1 2010 – Q3 2014

4

($ in billions)

2010 2011 2012 2013 2014

# of Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Deals 827 1,023 889 912 908 1,092 1,020 1,000 889 989 954 1,072 924 1,005 1,065 1,140 1,002 1,129 1,023

PwC

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014 Q3 YTD

$0

$20,000,000,000

$40,000,000,000

$60,000,000,000

$80,000,000,000

$100,000,000,000

$120,000,000,000

$8,016,523,400.0$11,286,785,000.0$15,073,135,600.0

$21,539,333,400.0

$54,910,597,400.0

$105,116,369,800.0

$40,937,602,200.0

$22,194,875,700.0$19,679,338,600.0$22,833,890,900.0$23,554,790,600.0$27,630,446,000.0

$32,146,614,600.0$30,362,754,400.0

$20,329,337,300.0$23,394,573,400.0$29,806,238,600.0$27,502,536,600.0$29,788,752,900.0$33,171,261,800.0

($ in billions)

MoneyTree total investmentsAnnual venture capital investments 1995 – Q3 2014 YTD

5

# of deals

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q3

YTD

1,897

2,636

3,232

3,743

5,606

8,044

4,595

3,218

3,035

3,236

3,304

3,890

4,234

4,189

3,162

3,651

4,020

3,904

4,134

3,154

PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, based on data from Thomson Reuters

PwC

Q1 '10

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Q3 '11

Q4 '11

Q1 '12

Q2 '12

Q3 '12

Q4 '12

Q1 '13

Q2 '13

Q3 '13

Q4 '13

Q1 '14

Q2 '14

Q3 '14

0

200

400

600

800

1000

1200

$5,110,359,200.0

$7,113,520,100.0$5,497,109,

900.0$5,673,584,

200.0

$6,534,193,100.0

$8,249,655,300.0$7,531,581,

900.0$7,490,808,

300.0$6,330,925,000.0

$7,463,078,300.0$6,681,062,

200.0$7,027,471,

100.0$6,070,155,400.0

$7,213,392,100.0

$7,979,124,300.0

$8,526,081,100.0

$9,762,356,200.0

$13,495,900,000.0

$9,913,005,600.0

# D

eals

Total amount invested ($B)

6

Average deal size ($M)

Q1 '10

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Q3 '11

Q4 '11

Q1 '12

Q2 '12

Q3 '12

Q4 '12

Q1 '13

Q2 '13

Q3 '13

Q4 '13

Q1 '14

Q2 '14

Q3 '14

$6,179,394.4

$6,953,587.6$6,183,475

.7$6,221,035

.3

$7,196,247.9

$7,554,629.4

$7,383,903.8

$7,490,808.3

$7,121,400.4

$7,546,085.2

$7,003,209.9

$6,555,476.8

$6,569,432.3

$7,177,504.6

$7,492,135.5

$7,479,018.5

$9,742,870.5

$11,953,853.0

$9,690,132.6


MoneyTree total investmentsQuarterly venture capital investments Q1 2010 – Q3 2014


Investments by region – Quarterly percent of total US investments

Top 5 US regions : Q3 2013 – Q3 2014

Silicon Valley NY Metro New England LA/Orange County SouthWest0%

10%

20%

30%

40%

50%

60%

46%

9%11%

6%

2%

40%

13%11%

5%

2%

50%

10% 10%

6%3%

57%

9% 9%

4%2%

44%

17%

7% 6% 5%

(% of total dollars)

Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14


Investments by industry – Quarterly percent of total US investments

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%46%

7%

12%

5% 6%

35%

13%16%

7%5%

42%

10% 11%8%

6%

45%

11%14%

5% 5%

37%

19%

11%7% 6%

Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14

(% of Total Dollars)

Top 5 Industries : Q3 2013 – Q3 2014

PwCPricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, based on data from Thomson Reuters

Internet-specific investments ($B)

Software & Internet-specific investments

9

Q1 2010 – Q3 2014

Q1 '10

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Q3 '11

Q4 '11

Q1 '12

Q2 '12

Q3 '12

Q4 '12

Q1 '13

Q2 '13

Q3 '13

Q4 '13

Q1 '14

Q2 '14

Q3 '14

0

50

100

150

200

250

300

350

$892,538,000.0

$1,059,704,800.0$1,126,735,40

0.0

$1,254,536,600.0

$1,403,608,800.0

$2,278,982,000.0$1,693,665,50

0.0$1,597,281,00

0.0$1,523,537,10

0.0

$1,898,352,000.0$1,643,292,00

0.0$1,551,395,20

0.0$1,363,890,500.0

$1,837,563,000.0$1,422,620,30

0.0

$2,399,494,100.0$2,403,297,50

0.0

$3,140,951,700.0$3,196,804,00

0.0$ Invested

# of deals

Software investments ($B)

Q1 '10

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Q3 '11

Q4 '11

Q1 '12

Q2 '12

Q3 '12

Q4 '12

Q1 '13

Q2 '13

Q3 '13

Q4 '13

Q1 '14

Q2 '14

Q3 '14

0

50

100

150

200

250

300

350

400

450

500

$994,470,400.0

$1,407,044,100.0

$1,272,385,900.0

$1,472,228,500.0

$1,432,914,100.0

$1,952,645,000.0

$2,295,604,500.0$1,852,137,

200.0$1,766,834,

600.0

$2,472,362,600.0$2,079,705,

500.0

$2,309,960,400.0

$2,240,158,800.0

$2,284,260,100.0

$3,650,663,200.0$2,946,494,

700.0

$4,145,647,300.0

$6,120,638,100.0

$3,709,030,900.0

$ Invested# of deals


Life sciences investments – Percent of total US investmentsLife sciences sector : Q3 2013 – Q3 2014

Biotechnology Medical Devices and Equipment Life Sciences0%

5%

10%

15%

20%

25%

12%

6%

19%

16%

5%

22%

11%

6%

17%

14%

5%

19%

11%

6%

17%

(% of total dollars)

Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14


$197

$2,958

$3,427

$3,331

Seed Stage Early StageExpansion Stage Later Stage

Investments by stage of development: Q3 2014

Q3 2014 Total Investments - $9,913 million in 1,023 deals

Stage of Development# of

Deals

% Change in $ from Q2 2014

Seed Stage 48 -16%

Early Stage 511 -3%

ExpansionStage

264 -16%

Later Stage 200 -13%

Total 1,023 -9%

($) in millions


Amount Invested by Stage ($M)

US Investments by stage: Quarterly Q1 2012 – Q3 2014

Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '140

2,000,000,000

4,000,000,000

6,000,000,000

8,000,000,000

10,000,000,000

12,000,000,000

14,000,000,000

16,000,000,000

$174,703,300$281,262,600$173,645,400$213,946,500$190,611,700$247,551,300$200,531,100$351,571,000$134,955,900$207,868,900$196,803,500

$1,982,759,700$2,183,885,000$1,975,818,800$2,316,269,800$1,624,087,300

$2,601,783,000$2,940,963,600$2,997,191,400$3,274,439,800$3,815,516,900

$2,957,753,700

$1,813,185,200

$2,773,197,700$2,647,434,300$2,241,399,000

$2,070,485,300

$2,197,869,700$2,487,970,400

$2,957,537,300$3,766,557,500

$6,247,799,600

$3,427,398,800$2,360,276,800

$2,224,733,000$1,884,163,700$2,255,855,800

$2,184,971,100

$2,166,188,100$2,349,659,200

$2,219,781,400

$2,586,403,000

$3,224,714,600

$3,331,049,600

Later Stage

Expansion Stage

Early Stage

Seed Stage


Number of Deals by Stage

US Investments by stage: Quarterly Q1 2012 – Q3 2014

Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '140

200

400

600

800

1,000

1,200

63 88 71 76 55 48 60 73 47 57 48

366

448430

520

426526

582 561

485526 511

226

256253

257

238

236

239 293

274

315264

234

197200

219

205

195

184

213

196

231

200

Later Stage

Expansion Stage

Early Stage

Seed Stage


$1,642

$8,271

First Sequence Follow-on

Investments by sequence of financing: Q3 2014

Financing # of Deals% Change in $ from Q2

2014

First Sequence 337 -8%Follow-on 686 -29%Total 1,023 -27%

($) in millions

Q3 2014 Total Investments - $9,913 million in 1,023 deals


First sequence financing Investment amount: Q1 2009 – Q3 2014

First sequence investments

2009 2010 2011 2012 2013 2014-

$1

$2

$0.7

$1.0

$1.2

$0.9 $0.9

$1.3

$0.8

$1.1

$1.6

$1.2 $1.2

$1.8

$0.8

$1.3 $1.3

$1.1

$1.3

$1.6

$1.2

$0.9

$1.3 $1.3

$1.5

($ in billions) Q1 Q2 Q3 Q4


First sequence financingNumber of deals: Q1 2009 – Q3 2014

First sequence deals

2009 2010 2011 2012 2013 2014 -

100

200

300

400

500

167

235

304

264 289

301

196

293

367

331 341 353

187

274

350 323

380

337

281 288

332

376 372

Q1 Q2 Q3 Q4

PwC 17

Number of First-time vs. Follow-on DealsUS Venture Capital deals 2009 – Q3 2014 YTDNumber of Deals

2009 2010 2011 2012 2013 2014 YTD Q30

500

1000

1500

2000

2500

3000

3500

4000

4500

8311,090

1,353 1,294 1,382991

2,331

2,561

2,667 2,6102,752

2,163

Follow on First sequence



First sequence financingPercent of total US investments: 2009 – Q3 2014 YTD

Q1

'09

Q2

'09

Q3

'09

Q4

'09

Q1

'10

Q2

'10

Q3

'10

Q4

'10

Q1

'11

Q2

'11

Q3

'11

Q4

'11

Q1

'12

Q2

'12

Q3

'12

Q4

'12

Q1

'13

Q2

'13

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

0%

5%

10%

15%

20%

25%

30%

35%

40%

17%16%

15%

20%19%

16%

23%

16%

19%20%

18% 17%

15%16%

17%18%

15% 17%17% 17%

13%13%

17%

24%26% 24%

30% 28% 29%

31% 32%

33% 34% 34%33%

30%

33% 34%35%

31%34%

36%

33%30% 31%

33%

% of Total Dollars


Quarterly percent of total first sequence dollars Stage of development Q3 2013 – Q3 2014

Seed Stage Early Stage Expansion Stage Later Stage0%

10%

20%

30%

40%

50%

60%

70%

80%

12%

64%

17%

7%

20%

53%

14% 13%9%

70%

11% 10%7%

51%

24%

17%

11%

48%

25%

16%

(% of first sequence dollars)

Q3 '13

Q4 '13

Q1 '14

Q2 '14

Q3 '14


Quarterly percent of total first sequence deals Stage of development Q3 2013 – Q3 2014

Seed Stage Early Stage Expansion Stage Later Stage0%

10%

20%

30%

40%

50%

60%

70%

80%

13%

72%

10%5%

16%

66%

13%

6%

13%

70%

11%6%

11%

63%

14%11%12%

68%

13%

6%

(% of first sequence deals)

Q3 '13Q4 '13Q1 '14


First sequence deals in seed & early stage companies1995 – Q3 2014 YTD

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Q3

YTD

0

1000

2000

3000

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

537 7

10 820 962

1,7

78

2,5

02

914

598

589 713

748 894 1

,014

936

612

827 1,0

69

1,0

52

1,1

46

785

60%62% 63%

67%72% 74% 74%

70%76% 73%

70% 70% 71% 72% 74%76%

79%

81%

83%79%

Seq 1 Deals in Seed/Early Stage% of Total Seq 1 Deals

Seed stage

Early stage

PwC 22

Median deal size vs. mean deal size Quarterly total US investments: Q1 2009 – Q3 2014

-

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

$14.0

$3.0 $2.5

$3.1 $2.4

$2.8 $3.0 $2.7

$2.8 $2.5

$3.0 $2.9 $2.5

$2.9 $3.0

$2.2 $2.2 $2.3 $2.5 $2.6 $2.6

$3.2 $3.6 $3.1

$5.7 $6.6

$7.1 $6.3 $6.2

$7.0

$6.2 $6.2 $7.2

$7.6 $7.4 $7.5

$7.1 $7.5

$7.0 $6.6 $6.6

$7.2 $7.5

$7.5

$9.7

$12.0

$9.7

Median Deal Size

($ in millions)



Q3 2014 – Most active US venture investors

VC Firm Location Number of DealsNew Enterprise Associates, Inc. Menlo Park, California 29Kleiner Perkins Caufield & Byers LLC Menlo Park, California 28Atlas Venture Cambridge, Massachusetts 19Intel Capital Corporation Santa Clara, California 17First Round Capital Philadelphia, Pennsylvania 17Innovation Works, Inc. Pittsburgh, Pennsylvania 16Andreessen Horowitz LLC Menlo Park, California 16Bessemer Venture Partners, L.P. Larchmont, New York 15Google Ventures Mountain View, California 13Trinity Ventures LLP Menlo Park, California 13Sequoia Capital Menlo Park, California 13General Catalyst Partners LLC Cambridge, Massachusetts 13Frost Data Capital San Juan Capistrano, California 12Redpoint Ventures Menlo Park, California 12SV Angel II Q, L.P. San Francisco, California 12500 Startups, L.P. Mountain View, California 11Greycroft Partners LLC New York, New York 11Khosla Ventures LLC Menlo Park, California 11Index Ventures San Francisco, California 11Bain Capital Venture Partners LLC Boston, Massachusetts 11DreamIt Ventures Bryn Mawr, Pennsylvania 11Mercury Fund Houston, Texas 11True Ventures Palo Alto, California 11Correlation Ventures San Diego, California 10Foundation Capital Menlo Park, California 10Accel Partners & Co., Inc. Palo Alto, California 10Lightspeed Management Company Menlo Park, California 10Domain Associates LLC Princeton, New Jersey 10Draper Fisher Jurvetson Menlo Park, California 10


Analysis of venture-backed IPO and M&A activity

Source: Thomson Reuters and 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

Date Total M&A Deals

Average M&A deal size ($M)*

Number of IPOs**

Total Offer Amount ($M)

Average IPO OfferAmount ($M)

2009 360 113.4 13 1,979.8 152.3

2010 545 117.3 66 7,409.5 112.3

2011 500 142.6 50 10,441.1 208.8

Q1 2012 114 131.1 19 1,682.8 88.6

Q2 2012 124 185.4 12 17,227.9 1,435.7

Q3 2012 123 228.6 10 1,140.7 114.1

Q4 2012 129 126.0 8 1,408.5 176.1

2012 490 171.9 49 21,459.9 438.0

Q1 2013 86 92.7 8 716.9 89.6

Q2 2013 96 218.6 22 2,249.9 102.3

Q3 2013 115 161.9 27 2,781.4 103.0

Q4 2013 93 196.0 24 5,320.1 221.7

2013 390 178.0 81 11,068.2 136.6

Q1 2014 112 245.8 37 3,404.5 92.0

Q2 2014 110 93.7 28 4,938.9 176.4

Q3 2014 119 248.2 23 2,563.0 111.4

2014 341 190.3 88 10,906.4 123.9


Venture capital fundraising

Source: Thomson Reuters & National Venture Capital AssociationData current as of October 14, 2014

YearFirst Time Funds

Follow-On FundsTotal Number of Funds

VC Raised ($M)

2010 53 122 175 13,272.0

2011 61 128 189 19,022.7

2012 75 141 216 19,798.2

2013 61 142 203 17,641.8

2014 Q3 YTD 70 116 186 16,471.1

Quarter

Q3 ‘13 18 45 63 4,340.7

Q4 ‘13 20 39 59 5,569.9

Q1 ‘14 30 38 68 10,030.2

Q2 ‘14 22 59 81 7,672.7

Q3 ’14 24 36 60 6,057.2


Closing thoughts & comments

Data is current as of October 14, 2014. PricewaterhouseCoopers and the National Venture Capital Association have taken responsible steps to ensure that the information contained in the MoneyTree™ Report has been obtained from reliable sources. However, neither of the parties nor Thomson Reuters can warrant the ultimate validity of the data obtained in this manner. Results are updated periodically. Therefore, all data is subject to change at any time.

© 2014 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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