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Shaking the MoneyTree™ Q3 2006 Update. Raleigh, NC November 2006. PricewaterhouseCoopers/ National Venture Capital Association MoneyTree™ Report based on data from Thomson Financial. pwc. Today’s program. The MoneyTree Report – Q3 2006 Analysis

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Shaking the MoneyTree™

Q3 2006 Update

Raleigh, NC

November 2006

PricewaterhouseCoopers/

National Venture Capital Association

MoneyTree™ Report

based on data from Thomson Financial

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

pwc


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Today’s program

  • The MoneyTree Report – Q3 2006 Analysis

    • presented by Laura Hoke, PricewaterhouseCoopers LLP

  • Venture Capital Panel

    • David Kirkpatrick, SJF Ventures

    • Janet Yang, Novak Biddle Venture Partners

  • Question and Answer Session

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


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


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Laura Hoke

  • Laura is a senior manager in the Raleigh office of PricewaterhouseCoopers ("PwC"), where she is responsible for providing a range of audit, business advisory and consulting services. She has extensive experience in the software industry, as well as other technology-backed industries including biotech, pharmaceutical and professional services.In addition to her audit and business advisory services, Laura has significant SEC experience, including several initial public offerings. She has been involved in numerous Sarbanes Oxley projects and has led the 404 implementation efforts at several organizations. Laura rejoined PwC’s Raleigh office after serving as the Corporate Controller for a global software company, where she was responsible for the domestic and international accounting functions, as well as the development, implementation and maintenance of the internal control structure. Laura has extensive experience in mergers and acquisitions and was responsible for the integration of acquisitions for a global distribution and manufacturing company.

  • Laura’s primary client is Lenovo Group, Limited although she participates on several other technology-backed engagements throughout the Carolinas. Laura graduated with a B.S. from Virginia Tech, is a member of the AICPA and the North Carolina Association of Certified Public Accountants. She also serves on the Board of Directors of Artspace, a nonprofit visual arts center in downtown Raleigh.

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


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David Kirkpatrick

  • David Kirkpatrick is Managing Director and co-founder of SJF Ventures, socially responsible venture capital fund with $40 million under management with offices in Durham, NC and New York, NY. SJF focuses on rapidly expanding cleantech, business services and consumer products firms, has 16 portfolio companies, and is investing from its second fund. SJF assists and invests in enterprises across the Eastern U.S. with unique cleantech or workforce innovations which create strong competitive advantages. The SJF portfolio includes groSolar, Salvage Direct, EdMap, Home Bistro, Ryla Teleservices, Evco Research, Preclick, and B.B. Hobbs.

  • David was named the national 2005 CDVC Practitioner of the Year by the Community Development Venture Capital Alliance. Previous to SJF, he founded and managed two other successful enterprises – KirkWorks, an environmental investment research firm, and SunShares, a solar energy and recycling company. David was named Recycler of the Year in 1996, the National Recycling Coalition’s award for leadership in the recycling industry.

  • David earned a BA in Physics and History from Duke University in 1982 and an MBA from UNC Business School in 1991. He is a graduate of the Venture Capital Institute’s VCI 1999 and VCI-Grad 2000 programs. He serves on the Boards of groSolar, B.B. Hobbs, and the Duke-Durham Neighborhood Partnership.

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


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Janet Yang

  • Janet Yang joined Novak Biddle Venture Partners in 2006.  Trained in electrical engineering from Stanford University, Janet started her investment career on Wall Street as a sell-side equity research analyst for Merrill Lynch and later Salomon Smith Barney, where she was a top-ranked analyst in her sector according to fund managers’ surveys, and helped raised over $800 million for various corporations. 

  • Prior to Novak Biddle, Janet worked closely with William H. Draper, III in San Francisco-based venture capital firm, Draper Richards, focusing on early-stage technology investments in the United States and India.   

  • Janet brings substantial international experience, as well as operating experience, to Novak Biddle.  She has over 10 years of work experience in Asia, in particular, the Greater China region.  While in Asia, Janet held various senior executive positions at PCCW, the largest telecommunications company in Hong Kong, reporting to Chairman and CEO Richard Li.  Her experience included being the CFO of an IT outsourcing company in partnership with China Telecom and PCCW. 

  • Janet is multi-lingual, fluent in Chinese and had studied Japanese and French.  She has lived and worked in New York, San Francisco, Washington DC, London, Tokyo, Hong Kong, Shanghai, and Beijing. 

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


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About The Report

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

  • 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 12th year

  • Results online at www.pwcmoneytree.com, www.nvca.org, www.ventureeconomics.com

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


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The National PictureHistorical Trends

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


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MoneyTree Total Investments: Q1 1998 – Q3 2006

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


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MoneyTree Total Investments: 1980 – YTD Q3 2006

Annual Venture Capital Investments 1980 to YTD Q3 2006

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


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MoneyTree Total Investments: 1995 – YTD Q3 2006

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


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Investments by Region: Q3 2006

New England

$578.1

87 Deals

Upstate NY

$30.6

6 Deals

Northwest

$190.0

33 Deals

NY Metro

$389.5

56 Deals

Sacramento/N. CA

$19.9

2 Deals

North Central

$139.1

17 Deals

Philadelphia Metro

$213.2

22 Deals

Silicon Valley

$1,988.6

250 Deals

Midwest

$ 199.0

36 Deals

Colorado

$209.0

23 Deals

LA/Orange County

$542.8

56 Deals

DC/Metroplex

$332.1

54 Deals

Southwest

$215.9

16 Deals

South Central

$9.6

5 Deals

San Diego

$ 292.5

27 Deals

Southeast

$357.8

56 Deals

Texas

$533.8

49 Deals

AK/HI/PR

$1.4

2 Deals

Q3 2006 Total Investments - $6,242.9M in 797 Deals

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


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Investments by Region: Q3 2006

NM = Not Meaningful

Q3 2006 Total:$6,242.9M in 797 Deals

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


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Investments by Region – Quarterly Percent of Total U.S. Investments

Top U.S. Regions – Q3’06

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


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Q3 2006 Top 10 States Garnering Venture Funds

  • State DealsInvestment Amount

  • 1. California 335 $ 2,843,840,200

  • 2. Texas 49 $ 553,806,300

  • 3. Massachusetts 73 $ 513,265,500

  • 4. New Jersey 16 $ 226,074,200

  • 5. New York 44 $ 212,953,400

  • 6. Colorado 23 $ 209,038,600

  • 7. Pennsylvania 27 $ 207,300,100

  • 8. Virginia 22 $ 163,265,300

  • 9. Washington 23 $ 146,558,400

  • 10. Arizona 6 $ 142,363,200

  • 12. North Carolina 15 $ 116,040,900

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


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Investments by Industry: Q3 2006

NM = Not Meaningful

Q3 2006 Total: $6,242.9M in 797 Deals

Visit www.pwcmoneytree.com for Industry definitions

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


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Investments by Industry – Quarterly Percent of Total U.S. Investments

Top 5 Industries – Q3 ‘05 to Q3 ‘06

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


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Life Science Investments – Percent of Total U.S. Investments

Life Science Sectors – Q3 ’05 to Q3 ‘06

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


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Investments by Stage of Development: Q3 2006

Q3 2006 Totals: $6,242.9M in 797 Deals

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


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Stage of Development – Quarterly Percent of Total First Sequence Dollars

Stage Development – Q3 2005 to Q3 2006

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


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Stage of Development – Quarterly Percent of Total First Sequence Deals

Stage Development – Q3 2005 to Q3 2006

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


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Investments by Sequence of Financing: Q3 2006

Q3 2006 Totals: $6,242.9M in 797 Deals

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


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First Sequence Financing – Investment Amount

First Sequence Investments

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


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First Sequence Financing – Number of Deals

First Sequence Deals

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


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First Sequence Financing –Percent of Total U.S. Investments

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


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First Sequence Deals in Startup & Early Stage Companies

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


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Median Deal Size vs. Mean Deal Size –Quarterly Total U.S. Investments

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


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Post-Money Valuations – Early Stage Companies 1995 to Q2 2006

12 Month Average

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


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Post-Money Valuations – Expansion Stage Companies 1995 to Q2 2006

12 Month Average

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


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Post-Money Valuations – Later Stage Companies 1995 to Q2 2006

12 Month Average

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


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Q3 2006 – Most Active Venture Investors

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


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Thomson Venture Economics’U.S. Private Equity Performance Index (PEPI)

(Investment Horizon Performance as of 6/30/2006)

Source: Thomson Venture Economics/National Venture Capital Association

*Data as of 10/11/2006--The Private Equity Performance Index (PEPI) is based on the latest quarterly statistics from Thomson Venture Economics’ Private Equity Performance Database analyzing the cashflows and returns for over 1862 US venture capital and private equity partnerships with a capitalization of $679 billion. Sources are financial documents and schedules from Limited Partners investors and General Partners. All returns are calculated by Thomson Venture Economics from the underlying financial cashflows. Returns are net to investors after management fees and carried interest.

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


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Analysis of Venture-Backed IPO and M&A Activity

**Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile

***Only accounts for deals with disclosed values

Source: Thomson Venture Economics/National Venture Capital Association

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


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Venture Capital and LBO/Mezzanine Fundraising*

*These figures take into account the subtractive effect of downsized funds

** This category includes LBO, Mezzanine, Turnaround and Recapitalization-focused funds

***Date current as of 10/16/06

Source: Thomson Venture Economics/National Venture Capital Association

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


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North Carolina PictureHistorical Trends


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MoneyTree Total North Carolina Investments1995 – YTD 2006

37

61

77

78

100

154

93

85

72

55

54

52

# of Deals

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


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MoneyTree Total North Carolina Investments1999 – Q3 2006

($ in millions)

2002

2001

2006

2003

2004

2005

1999

2000

# of Deals

15

25

18

42

42

39

38

35

31

24

23

15

20

23

22

20

13

28

13

18

9

15

17

14

11

14

18

11

19

18

15

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


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MoneyTree Total North Carolina Investments –

1999 – Q3 2006

($ in millions)

100

154

93

85

72

54

52

55

# of Deals

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


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MoneyTree Total North Carolina Deals–

1999 – Q3 2006

($ in millions)

Amount

Invested

(in millions)

$762

$1,832

$591

$556

$349

$323

$442

$385

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


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Total North Carolina Investments by Industry –

Q3 2006

% Change in $ Amount from Q3 2005

Total Deals

Q3 2006

($ in millions)

(58.2%)

5

100.0%

1

(42.6%)

4

133.3%

1

100.0%

2

100.0%

1

1

(97.5%)

$.4

Q3 2006 Total: $116.0

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

1

100%

2

(41.2%)

Q3 2003 Total: $98.5

Industry Definitions @ www.pwcmoneytree.com


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Biotechnology Investments in NC vs. U.S.

1999 – Q3 2006

($ in millions)

2.6%

# of Deals

15

21

17

16

12

16

17

12

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

Amount Invested

(in millions)

$368

$44

$272

$822

$1,877

$367

$641

$622


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Software Investments in NC vs. U.S.

1999 – Q3 2006

($ in millions)

$17

0.4%

# of Deals

24

38

27

25

21

18

8

9

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

Amount Invested

(in millions)

$368

$44

$272

$822

$1,877

$367

$641

$622


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Average Deal Size – NC vs. U.S.1999 – Q3 2006

($ in millions)

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


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North Carolina Companies Funded in Q3 2006

Company Name

Industry

Amount

Amphora Discovery Corporation Biotechnology $ 123,000

CareAnyware, Inc. Software $ 400,000

Cempra Pharmaceuticals, Inc. Biotechnology $ 14,000,000

eMinor, Inc. Media & Entertainment $ 1,950,000

HexaTech, Inc. Semiconductors $ 1,475,000

HyperBranch Medical Technology, Inc. Medical Devices & Equipment $ 1,000,000

Inlet Technologies, Inc. Media & Entertainment $ 4,400,000

LipoScience, Inc. Medical Devices & Equipment $ 13,000,000

Motricity, Inc. Telecommunications $ 31,999,900

nContact Surgical, Inc. Medical Devices & Equipment $ 7,500,000

ParinGenix, Inc. Biotechnology $ 20,400,000

Phase Bioscience, Inc. Biotechnology $ 293,000

RadarFind Corporation Medical Devices & Equipment $ 500,000

Sicel Technologies, Inc. Biotechnology $ 12,000,000

CONFIDENTIAL Financial Services $ 7,000,000

$ 116,040,900

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


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VC Funds Active in North Carolina

  • Academy Funds

  • A.M. Pappas & Associates LLP

  • BancAmerica Capital Investors

  • BB&T Capital Partners

  • CapitalSouth Partners LLC

  • Carolina Financial Group

  • Carousel Capital Partners

  • Centura SBIC Inc.

  • Charlotte Angel Partners

  • Core Capital

  • Fairview Capital LLC

  • First Union Ventures Group

  • Franklin Street Partners

  • Frontier Capital LLC

  • Gardiner Capital

  • Glenwood Venture Partners

  • Golden Pine Ventures

  • Grotech Capital Group

  • Halifax Group

  • Hatteras BioCapital

  • H.I.G. Ventures

  • Intersouth Partners

Kodiak Venture Partners

Lovett Miller & Company, Inc.

Massey Burch

NC IDEA

New Enterprise Associates

Noro-Moseley Partners

Novak Biddle Venture Partners

Remington Capital Partners

Research Triangle Ventures

River Cities Capital Funds

SJF Ventures

Southern Capitol Ventures

Southeast Interactive Technology Funds

The Atlantis Group

The North Carolina Enterprise Fund

The Aurora Funds

The Trelys Funds

TriState Investment Group

Wachovia Capital Partners

Wakefield Group

Venture First Associates

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


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Entrepreneurs and Venture Capital On-Line Resource List

  • www.pwc.com - The PricewaterhouseCoopers Global website.

  • www.pwcmoneytree.com, www.nvca.org, www.ventureeconomics.com - The PricewaterhouseCoopers/National Venture Capital Association MoneyTree TM Report based on data from Thomson Financial is a quarterly study of equity investments made by the venture capital community in private companies in the U.S. The survey identifies regional and national trends, entrepreneurial developments and promising industry segments.

  • www.pwcnextwave.com - PricewaterhouseCoopers’ thought leadership articles for the world of private equity.

  • www.cfodirect.com - CFOdirect Network – PricewaterhouseCoopers’ online accounting, finance and business resource for senior financial executives.

  • www.pwcV2R.com - The Vision to Reality Entrepreneur Resource Center site offers proven business plan templates, financial models, technology-specific ratios, benchmarks and more.

  • www.pwcvc.com - The VC BestPractices site serves to provide an aggregate, comparative view of key issues and activities impacting the venture capital community, and to identify best practices.

  • www.barometersurveys.com - PricewaterhouseCoopers’ Trendsetter and Technology Barometers site – result & analysis of the quarterly survey of fast-growth and large company CEO’s.

  • www.cednc.org - The Council for Entrepreneurial Development

  • www.nc-tech.org - North Carolina Technologies Association

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


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


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