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The Florida Venture Forum, the Gulf Coast Venture Forum and the EDC of Sarasota are proud to present . MARK G. HEESEN State of the Venture Capital Industry October 14, 2009 Sarasota, Florida . Thank you to our sponsors. State of the Venture Capital Industry October 2009 Mark G. Heesen

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The florida venture forum the gulf coast venture forum and the edc of sarasota are proud to present l.jpg
The Florida Venture Forum, the Gulf Coast Venture Forum and the EDC of Sarasotaare proud to present

MARK G. HEESEN

State of the Venture Capital Industry

October 14, 2009

Sarasota, Florida



State of the venture capital industry october 2009 mark g heesen president l.jpg

State of the Venture Capital Industry

October 2009

Mark G. Heesen

President


Global insight study l.jpg

In 2008, venture backed companies:

Provided 12.05 million US jobs

Had sales of $2.3 trillion

Represents 20.5% of GDP

Still dominated venture-created sectors

74% of telecommunications jobs

81% of software jobs

55% of semiconductor revenue

67% of electronics/instrumentation revenue

Global Insight Study

Source: Venture Impact 2009 by Global Insight



Capital under mgt firms peaked industry capital now 197b l.jpg
Capital under mgt & # firms peaked; Industry capital now $197B

Source: NVCA 2008 Yearbook prepared by Thomson Reuters


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VC Fundraising Matches Investment - $197BLate 2008’s Denominator Effect Killed Fundraising (Less than $2B in 3Q 2009

Does not include Corporate Venture groups.

Source: Thomson Reuters/NVCA


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Investment Marches On - $197BRumors that the Venture Industry has stopped investing are exaggerated


Vc investment peaked in 2000 2008 was down 8 1h09 was 6 8b l.jpg
VC Investment Peaked in 2000; $197B2008 Was Down 8%; 1H09 was $6.8B

$103B

$28B

$7B

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,

Data: Thomson Reuters


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Investment Started Slowing Considerably in 3Q08 from a 5-year Steady Slow Growth

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters


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Clean Technology investment grows significantly 5-year Steady Slow Growth2008: $4B in 286 Deals

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,

Data: Thomson Reuters


Despite the recession q4 vcs funded 1 202 new companies in 2008 very slow ytd l.jpg
Despite the recession Q4, VCs funded 1,202 new companies in 2008; Very slow YTD ….

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,

Data: Thomson Reuters


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Florida is currently ranked 17 2008; Very slow YTD ….th for overall venture capital investment.

Venture Capital Investment In Billions

2008 State Ranking

13


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Venture-backed companies are a critical engine of economic growth for Florida.

From 1970 – 2008 venture capitalists invested $10.2 billion in 639 companies in FL.

Public companies headquartered in FL that were once venture-backed account for 242,074 jobs and $76 billion in revenue.*

FL ranks #11 in jobs and #9 in revenues at venture-backed companies headquartered in the state.*

One U.S. job was created for every $42,135 of venture capital dollars invested in the state of Florida.

14

* According to 2009 Global Insight study


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Annual average venture capital investment in Florida from 2003-2008 was $400 million.

*

# Companies

$ Billions

15

* 2000 numbers reflect technology bubble


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Florida venture-backed companies receiving top funding in 2008 represent a broad range of industries.

Top venture-funded FL companies - 2008

16


The highest venture funded industries in florida are software telecom and energy l.jpg
The highest venture funded industries in Florida are software, telecom, and energy.

VC Investment in FL - Industry Breakout - 2008


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93% of venture capital investment into software, telecom, and energy.FL companies comes from out of state.

In 2008, venture capital dollars invested in FL companies came from venture firms headquartered in:


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The Exit Scene - software, telecom, and energy.the importance of acquisitions has become clear over the past several years


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IPO Levels Were Good in 2004 and Okay in 2007; Awful Now software, telecom, and energy.

Source: Thomson Reuters/National Venture Capital Association


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What’s in the IPO Pipeline? software, telecom, and energy.Dismal Short Term…Don’t confuse “uptick” with “recovery”…

Source: Thomson Reuters/National Venture Capital Association


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VB Acquisition Counts Were Steady; Down Now – Quality Varies

Source: Thomson Reuters/National Venture Capital Association


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M&A Exits Aren’t Providing Much Liquidity Either Varies

Source: Thomson Reuters/National Venture Capital Association


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Those Few Acquisitions Which Do Happen Are Not Great Varies

Source: Thomson Reuters/National Venture Capital Association – Undisclosed txns are prorated


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Venture Exit Counts- IPOs and M&A by Year Varies

Source: Thomson Reuters/National Venture Capital Association


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Performance Varies


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Venture Capital Returns: Still Around 20% over the long haul net to the LPs

Through Q2 2009

Except * through Q1 2009

Source: Cambridge Associates U.S Venture Capital Index®, the performance benchmark of the National Venture Capital Association


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Public Policy and net to the LPsThe Venture IndustrySome Wins; Many Challenges …


American competitiveness l.jpg

More people will graduate in the US [in 2006] with sports-exercise degrees than electrical engineering degrees.

So if we want to be the massage capital of the world, we’re well on our way …

American competitiveness ...

  • Jeffrey Immelt

  • CEO of GE in a

  • 2006 Globalist interview


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Key US VC building blocks ... sports-exercise degrees than electrical engineering degrees.Our Ecosystem!

  • Capital formation

    • Prudent man rule – enabled pension investment

    • LP laws

    • Capital gains tax reduction

  • Empowered entrepreneurs

    • Capital gains tax reductions

    • Stock options/team building tools

    • Reasonable bankruptcy laws

  • Protect companies – IP laws

  • Abundant customers willing to do business with SMEs

  • Exit markets – the NASDAQ

  • Face-to-face investing/proximity

  • Cultural acceptance


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“Buy low… sell high” is easier if you really buy low! sports-exercise degrees than electrical engineering degrees.

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters


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www.nvca.org sports-exercise degrees than electrical engineering degrees.


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