Q2 2012 Venture Capital Activity Report - CB Insights - Pre-Release Copy (Final)

Venture Capital Activity Report | Q2 2012
TABLE OF CONTENTS
QUARTER SUMMARY QUARTERLY TRENDS SECTOR REVIEW
1 2 3 4 INTERNET MOBILE & TELECOM HEALTHCARE GREEN / CLEAN TECH
2 3 11
11 18 25 32
GEOGRAPHIC REVIEW
1 2 3 4 5 CALIFORNIA MASSACHUSETTS NEW YORK WASHINGTON TEXAS 39 45 50 56 61
DEFINITIONS & DATA INTEGRITY
66
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Q2 2012 This Quarter in Venture Capital

What VC slowdown? After Q1 2012s funding dip, Q2 sees VCs open up their wallets wide and often with the highest funding and deal totals since the dot com days.
812 companies received $8.1B of financing in Q2 2012 removing any thoughts that VCs were taking a break because of concerns about the IPO or exit markets or larger economic uncertainty. This represents a 37% increase in funding and 3% increase in deals vs. the prior quarter. On a year over year basis, funding and deals were up 5% and 4% respectively. Deal activity which we continue to view as the best gauge of investor sentiment remains strong. The pace of deal making coupled with mega deals especially in green tech helped to dial up funding in a big way.
Note: Only deals in which VCs are participating are included. Companies which raise money from mutual or private equity funds or corporations (unless it is their corporate venture arms) are not included. We recommend you review our definitions and methodology on p. 66 to see what is included/excluded as there is a great amount of misinformation out there.
A Changing of the Guard Is NY the New #2 Overall? While NYs ascent in tech VC has been something we highlighted some time ago, this quarter marked the 2nd straight quarter in which NY exceeded Massachusetts on overall VC deal volume. On the funding front, Mass continues to retain the #2 position. Seed VC Investing Hits All-Time High
Internet Sector Hits Five-Quarter High Seed deals bolster internet sectors deal volume while mid and later-stage deals buoy funding levels. Cali and NY becoming two-headed monster on the internet front (with Cali, of course, dominating). Social takes backseat to ed tech, e-commerce apparel and enterprise technology plays. Healthcare VC on Life Support
More than 1 out of 5 VC deals this quarter were seed investments. These call options as weve referred to them in the past made up 31% of all internet deal and 34% of all mobile sector deals. Seed VC deals have been hot for a while, but the level of activity at this stage has accelerated steadily since Q1 2011. Mobile Deals Hit All-Time High. Herd Mentality? Without being too self-congratulatory, the Instagram Effect we speculated about in Q1 2012 seems to have taken shape as the mobile sector saw 102 deals, an alltime high. Photo and video related companies took home almost 30% of the funding in mobile evidencing more opportunity in those areas. For skeptics, it may also be indicative of a VC herd mentality. Time will tell. Green Tech Mega Deals Dont Mask Sectors Issues Big deals to Fisker, Bloom Energy and Sapphire inflate funding to a five quarter high while deal volume fell to a five quarter low having fallen 37% vs. last year. Renewable energy, green techs typical goto industry, fell below 30% of deal volume for the first time suggesting the sector remains in flux.
Bad healthcare puns aside, the trend for healthcare VC is not a great one. Deals hit a five quarter low while funding rebounded modestly from the Q112 lows. Mass VC Malaise Spreads to Healthcare Too Although healthcare deals were down overall, Massachusetts share of deals and dollars to the healthcare sector fell more than industry levels. For healthcare, Mass was only 13% of deals and 15% of funding both five quarter lows. Washington Gets Some Love Washington state hits a five quarter high on both deals and funding. Year over year, dollars and deals were up 136% and 10% respectively. On a sequential basis, funding climbed 51% and deals jumped 14%. Strong performance by healthcare and internet sectors help Washingtons Q2 2012 performance. Cali The Beat Dont Stop The Golden State juggernaut rebounds nicely in Q2. Takes 45% of deals and 58% of funding (both five quarter highs). Versus Q112, Calis funding was up 64% and deal were up 17%. On a YoY basis, funding to Cali companies was up 28% and deals grew 6%.
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$8.1B in 812 Deals Biggest Quarter Since Dot Com Era

2012 starts off sluggish, but Q2 2012 sees companies haul in $8B from VCs making it the biggest quarter for venture capital in over a decade.
Quarterly VC Investment and Deal Volume Trend

Q2 '10 to Q2 '12
749 781 790 755 785 812
715
735
612
$7.5 $6.5 $5.9 $7.7
$7.9
$7.6 $5.9
$8.1
$5.4
Q2'10
Q3'10
Q4'10
Q1'11
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
Investment ($M)
Deals
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Cali Gains on Deals. NY Holds #2 Spot for 2nd Straight Qtr

NY holds onto the #2 position in overall deal share over Massachusetts. Californias deal share reaches a five quarter high as it claimed almost half of all VC deals.
Share of Venture Capital by State - Number of Deals

Five Quarter Trend
28% 4% 5% 8% 12%
31% 4% 4% 11% 11%
31% 3% 3% 10% 12%
31% 4% 5% 11% 10%
28% 4% 3% 10% 9%
44%
40%
40%
40%
45%
Q2'11 California
Q3'11 Massachusetts
Q4'11 New York Texas
Q1'12 Washington
Q2'12 Other
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The Juggernaut Cali Funding Rises Above the Rest

Cali, Mass, and NY all took a step back in Q1 2012 funding share, but Cali reverses this in Q212 as it 58% of all VC funding dollars, a five quarter high.
Share of Venture Capital by State - Dollars of Funding

Five Quarter Trend
21% 2% 4% 7% 16%
26% 2% 4% 10% 9%
19% 2% 6% 8% 13%
25%
20% 4% 2% 6%
10%
4% 6% 6% 11%
50%
48%
52%
49%
58%
Q2'11 California
Q3'11 Massachusetts
Q4'11 New York Texas
Q1'12 Washington
Q2'12 Other
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Deals and Funding Consistently High Throughout Q212

Funding dollars from VCs remain consistent from month-to-month in Q2 2012, a promising turnaround after both deals and dollars languished in February. Deal activity accelerates in May and June after falling in the beginning of Q2 2012.
Monthly VC Investment and Deal Volume Trend

January 2011 to June 2012 289 270 242 218
$2.7 $2.2 $2.6
278
292 267 263 260 258 233 264 245 248 231
292
289
233
$3.0 $2.7 $2.4 $2.3 $2.5 $2.7 $2.6
$2.6
$2.4 $2.2 $2.0 $1.7
$2.6
$2.7
$2.8
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Early Stage Deals Account for Half of All VC Activity

Seed VC make up 22% of all deals, a five quarter high. Meanwhile, funding distribution across series stays consistent with historical levels.
Share of Venture Capital by Series - Number of Deals
Five Quarter Trend
9% 11% 17%
7% 9% 15%
8% 9% 13% 20%
7% 9% 15% 21%
9% 9% 13% 18%
22%
25%
29%
29%
35%
29%
28%
12% Q2'11 Seed
15% Q3'11 Series A
14% Q4'11 Series B Series C
19%
22% Q2'12 Series E +

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Q1'12 Series D
Share of Venture Capital by Series - Dollars of Funding

Five Quarter Trend
21%
22%
19% 15%
20%
19%
18%
16%
18%
22%
20% 22% 21% 25% 21% 26% 21% 1% Q4'11

Series B Series C 20%
23%
23%
17% 17% 2% Q2'12

Series E +
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17% 1% Q2'11
Seed
13% 1% Q3'11
Series A
18% 2% Q1'12
Series D
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Healthcare Slips Back on Deals While Internet Grows

Internet expands as it once again reaches a five quarter high in deal share and matches the high in funding share. Meanwhile, healthcare continues its descent falling to 5 quarter lows on both deal and funding share.
Share of Venture Capital by Sector - Number of Deals
Five Quarter Trend
15% 9% 4% 9% 6%
14% 13% 4% 7% 5%
14% 12% 3% 5% 5%
16%
12% 13% 3% 6% 3%
12% 3% 3% 5%
38%
39%
37%
42%
46%
19% Q2'11
18% Q3'11
23% Q4'11
19% Q1'12 Internet Software (non-internet/mobile) Mobile & Telecommunications
17% Q2'12
Healthcare Energy & Utilities Computer Hardware & Services Other
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Share of Venture Capital by Sector - Dollars of Funding

Five Quarter Trend
14%
14% 7% 3% 6% 11%
14%
16% 7% 5% 3% 10%
19%
8% 4% 3% 8%
7% 5% 6% 8%
10% 3% 5% 10%
36%
38%
33%
35%
38%
25%
Q2'11
21%
Q3'11
25%
Q4'11
24%
Q1'12
19%
Q2'12
Healthcare Energy & Utilities Computer Hardware & Services Other
Internet Software (non-internet/mobile) Mobile & Telecommunications
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11
Q2 2012 Venture Capital
INTERNET
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12
Internet Deals and Funding Hit Five Quarter Highs

Internet
Bolstered by strong early stage deal activity, internet deals increase 14% from Q112 with funding up 50%. This jump reverses a two quarter funding decline.
Internet VC Investment and Deal Volume Trend

Last Five Quarters 371 298 $2,742 308 326 283 $2,514 $2,067 $3,107
$2,989
Q2'11
Q3'11
Q4'11 $ Funding # of Deals
Q1'12
Q2'12
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13
Cali Takes Half of Internet Deals and Funding

Internet
NY is firmly entrenched behind Cali. Meanwhile, larger funding deals enable Florida and Washington to challenge Massachusetts for the #3 spot.
Quarter Highlights
1% 1%
VC Deal Volume (#) in Internet by State, Q2 2012

California
371 deals | $3,107M

Top Deals
Fanatics Castlight Health Pinterest Donuts Qualtrics Evernote
13%
New York Massachusetts Florida Washington Illinois Utah Colorado
3% 3% 5% 6%
8% 16% 48%
Maryland Connecticut All Other

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Top Cities
San Francisco, CA 67 deals | $726M New York, NY 55 deals | $348M Mountain View, DC 19 deals | $228M Jacksonville, FL 1 deals | $150M Palo Alto, CA 22 deals | $120M Chicago, IL 11 deals | $103M Sammamish, WA 1 deals | $100M Redwood City, CA 5 deals | $75M Los Angeles, CA 10 deals | $74M
2% 2% 3%
VC Investment ($) in Internet by State, Q2 2012

2% 2%
6%
California
New York
Massachusetts
Florida
6% 6% 7% 13%
Washington
51%
Illinois Utah Colorado Maryland Connecticut All Other

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Cambridge, MA
14
Cali and NY The Two Horsemen of the Internet

Internet
Almost 65% of internet deals, a 5 qtr high, occur in Cali and NY. Washington gives Mass a scare for the #3 spot as its deal & dollar share rises for the 2nd straight quarter.
Share of Internet VC by State - Number of Deals

Last Five Quarters
24% 3% 8% 3% 14%
25% 3% 8% 4% 20%
28% 2% 7% 3% 15%
27% 3% 6% 4% 17%
21% 2% 8% 5% 16%
48%
39%
44%
44%
48%
Q2'11 California
Q3'11 New York
Q4'11 Washington
Q1'12 Texas
Q2'12 Other
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Massachusetts
Share of Internet VC by State - Dollars of Funding

Last Five Quarters
30%
21% 2% 3% 3% 20%
20% 7% 6% 2% 15%
22% 4% 5% 5% 9%
22% 1% 7% 6% 13%
1% 10% 2% 14%
43%
52%
51%
55%
51%
Q2'11 California
Q3'11 New York
Q4'11 Washington
Q1'12 Massachusetts Texas
Q2'12 Other
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15
Seed Deals Outpace Series A Deals for the First Time

Internet
On the back of seed deals, early stage deal share increases for the fifth straight quarter. Funding share remains mostly consistent with Q1 2012s levels.
Share of Internet VC by Series - Number of Deals
Last Five Quarters
5% 8%
4% 7% 12%
5% 9% 11% 21%
5% 7% 13%
17%
6% 7% 10% 16%
13%
26%
25%
30% 31% 33% 35%

34%
18% Q2'11 Seed
19% Q3'11 Series A Series B
19% Q4'11 Series C
24%
31%
Q1'12 Series D
Q2'12 Series E +
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Share of Internet VC by Series - Dollars of Funding

Last Five Quarters
28%
23%
20% 15% 16%
15% 20%
18% 17%
12% 15% 18% 18% 30%
20%
22%
30%
19%
17%
22% 15% 1% Q2'11
15% 2% Q3'11
17% 2% Q4'11
23%
23%
3% Q2'12
3% Q1'12
Seed
Series A
Series B
Series C
Series D
Series E +
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16
VCs Continue to Invest Across Diverse Array of Net Cos

Internet
Social internet continues to fall behind other sub-industries, as online apparel, educational technology, and business technology all claim larger share of funding.
VC Deal Volume (#) in Internet by Sub-Industry, Q2 2012

5% 6%
Apparel & Accessories Education & Training Bus. Intelligence, Analytics & Performance Mgmt Social Healthcare Advertising, Sales & Marketing Data & Document Management Video Monitoring & Security Information Providers & Portals Data Storage Accounting & Finance eCommerce enablement Gaming All Other
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37%
11%
6%
8% 3%
3%
4% 5%
1% 2% 3%
2%
4%
VC Investment ($) in Internet by Sub-Industry, Q2 2012

10% 24% 9% 9% 7% 6%
Apparel & Accessories Education & Training Bus. Intelligence, Analytics & Performance Mgmt Social Healthcare Advertising, Sales & Marketing Data & Document Management Video Monitoring & Security Information Providers & Portals Data Storage Accounting & Finance eCommerce enablement Gaming All Other
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2% 3% 3% 3%
4%
4%
5% 5% 6%
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17
Median Deal Sizes Climb to 5-Quarter Highs

Internet
Median deal size across every round type hit five quarter highs. This is the first time weve observed an across-the-board increased in median deal sizes for any sector.
Internet Median Deal Size by Quarter

($ Million) $22.0
$17.9 $15.0
$9.0
$4.0 $1.2 Seed

Q2'11
Series A
Q3'11
Series B
Q4'11
Series C
Q1'12
Series D
Q2'12
Series E +
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18
MOBILE & TELECOM
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19
Instagram Effect Mobile Deal & Funding Stay Strong

Mobile
Mobile deal activity rises to a five quarter high. Additionally, funding is up 21% vs. Q211 and 54% vs. Q112.
Mobile & Telecom VC Investment and Deal Volume

Last Five Quarters 100 92 93 102
68
$756 $669 $554 $553 $435
Q2'11
Q3'11
Q1'12
Q2'12
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20
California Rakes it in with Large Mobile Deals

Mobile
Large deals enable Cali funding share to dominate. NY is #2 on deals but the high proportion of early stage deals in NY give it little juice in terms of funding. Mass is #3 on mobile deal volume but #2 on funding.
Quarter Highlights
VC Deal Volume (#) in Mobile & Telecom by State, Q212
102 deals | $669M

California Massachusetts
17% 3% 1% 1%
3% 12%
Top Deals
Instagram PATH TangoMe MobileIron SpiderCloud Wireless
Illinois Florida
44%
Virginia New York Washington Oklahoma Ohio Texas All Other

www.chubbybrain.com
4%
6%
2%
7%
Top Cities
San Francisco, CA 22 deals | $211.4M
VC Investment ($) in Mobile & Telecom by State, Q212

2% 1% 1% 3%
California Massachusetts Illinois Florida Virginia New York Washington Oklahoma
Mountain View, CA 3 deals | $42M Palo Alto, CA 2 deals | $41.1M Cambridge, MA 4 deals | $39.1M San Jose, CA 2 deals | $35M Venice, CA 2 deals | $34.1M Boston, MA 3 deals | $26.14M Chicago, IL 4 deals | $18.3M Santa Clara, CA 2 deals | $18.21M New York, NY 10 deals | $17.75M
3% 2%
4% 5%
5%
10%
64%
Ohio
Texas
All Other
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21
Unusual Suspects Challenge Traditional Mobile Players

Mobile
Californias deal share and New Yorks funding share both fall to five quarter lows as other states join the rapidly growing mobile & telecommunications sector.
Share of Mobile & Telecom VC by State - Number of Deals
Last Five Quarters
21% 1% 7% 10% 13%
27% 3% 4% 4% 6%
23% 1% 4% 9% 14%
22% 32% 3% 6% 6% 12% 2% 3% 7% 12%
47%
56%
49%
51%
44%
Q2'11 California
Q3'11 New York
Q4'11 Massachusetts Washington
Q1'12 Colorado
Q2'12 Other
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Share of Mobile & Telecom VC by State - Dollars of Funding

Last Five Quarters
20%
13%
4% 3% 2% 6%
3% 11% 17%
11% 4% 8%
49%
20% 2% 10% 3%
9% 9%
2% 4% 5% 73% 59% 49% 40% 64%
Q2'11 California
Q3'11 New York
Q4'11 Massachusetts
Q1'12 Washington Colorado
Q2'12 Other
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22
Seed VC Deals in Mobile Hit Five Quarter High Again

Mobile
Early stage companies in the mobile sector continue to be attractive to venture capital firms, although early stage funding share has taken a step back from Q1 2012.
Share of Mobile & Telecom VC by Series - Number of Deals
Last Five Quarters
9% 8% 14%
3% 11% 8%
7% 1% 9%
14%
5% 4% 10% 14%
6% 3% 14% 11%
15% 11% 33% 37% 44%
33%
33%
22% Q2'11 Seed
30%
24%
33%
34%
Q3'11 Series A Series B
Q4'11 Series C
Q1'12 Series D
Q2'12 Series E +
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Share of Mobile & Telecom VC by Series - Funding Dollars

Last Five Quarters
8% 20%
11% 22%
19% 14%
13% 3% 29%
31%
1%
16%
14%
39%
14% 28%
19%
18%
27%
8% 20%
2% Q2'11
23% 4% Q3'11
30%
30% 6% Q1'12
22% 5% Q2'12
4% Q4'11
Seed
Series A
Series B
Series C
Series D
Series E +
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23
Instagram Effect: Photo & Video Take Deals, Lead Funding

Mobile
Not very original perhaps, but photo and video mobile take most funding taking nearly 20% of funding. Application development remains a popular area for investment as VCs try to fund those providing picks & shovels to those seeking mobile riches.
VC Deal Volume (#) in Mobile & Telecom by Sub-Industry, Q2 2012

5% 3%
10%
32%
2%
9%
7% 4% 3% 3% 6% 4% 1% 2%
9%
Photo Video Wireless Telecom Equipment Storage & Systems Management Conferencing & Communication Advertising, Sales & Marketing Application Development Travel Gaming Government Location-Based & Navigation Security Healthcare Application & Data Integration All Other
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VC Investment ($) in Mobile & Telecom by Sub-Industry, Q2 2012

2% 3% 3% 2% 12%
15%
3% 3%
14%
4%
5% 7% 8% 8% 11%
Photo Video Wireless Telecom Equipment Storage & Systems Management Conferencing & Communication Advertising, Sales & Marketing Application Development Travel Gaming Government Location-Based & Navigation Security Healthcare Application & Data Integration All Other
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24
Early Stage Deal Size Grows; Late Stage Deals Shrink

Mobile
In another sign that VCs are buying into early stage mobile companies, the median deal size for early stage deals rises.
Mobile and Telecom Median Deal Size by Quarter

($ Million)
$13.6
$10.3 $9.0 $5.8 $3.8 $1.0 Seed Series A Q2'11 Series B Q3'11 Series C Q4'11 Series D Q1'12 Series E + Q2'12
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25
HEALTHCARE
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26
Healthcare Funding Ticks Up Although Deal Activity Falls

Healthcare
After Q112, the weakest funding quarter the healthcare sector experienced since 2010, VC dollars increased $85M, a 6% increase. Deal volume to healthcare hit a 5 quarter low.
Healthcare VC Investment and Deal Volume Trend

Last Five Quarters 172 147 $1,894 $1,677 $1,449 $1,534 143 $1,895 153 142
Q2'11
Q3'11
Q1'12
Q2'12
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27
California and Massachusetts combine for 50% of deal share and 60% of funding dollars. Beyond the top two, the field remains as fragmented as usual.
Quarter Highlights
142 deals | $1,534M
VC Deal Volume (#) in Healthcare by State, Q2 2012
California Massachusetts
Top Deals
Trivascular Global Blood Therapeutics Astute Medical Alder Biopharmaceuticals arstasis
22%
Washington
37%
3% 3% 3%
New Jersey Pennsylvania

Michigan Minnesota North Carolina
Top Cities
San Diego, CA 8 deals | $117M Cambridge, MA 10 deals | $93M
1%
3%
6%
Texas
4%
5%
13%
Colorado All Other

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VC Investment ($) in Healthcare by State, Q2 2012

2% 2%
3% 3% 5% 45%
California
San Francisco, CA 7 deals | $82M Redwood City, CA 4 deals | $81M Santa Rosa, CA 1 deals | $60M Sunnyvale, CA 4 deals | $53M Kalamazoo, MI 3 deals | $46M South San Francisco, CA 3 deals | $45M Bellevue, WA 2 deals | $41M
2%
11%
Massachusetts Washington New Jersey Pennsylvania Michigan Minnesota North Carolina
5%
7% 15%
Texas
Colorado
All Other
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Boston, MA 2 deals | $39M
Healthcare
Cali and Mass Lead Healthcare Sector by Wide Margin
28
After falling for three straight quarters, Californias deal share rises to a five quarter high. Meanwhile, Massachusettss deal share falls for the third straight quarter, and its share of deals and dollars both fall to five quarter lows.
Share of Healthcare VC by State - Number of Deals
Last Five Quarters
35%
34%
40%
35%
40%
3% 3% 3%
20%
3% 4% 5% 24%
1% 5% 4% 22%
4% 9% 6%
19%
2% 6% 3% 13%
35%
29%
28%
27%
37%
Q2'11
California
Q3'11
Massachusetts
Q4'11
Texas
Q1'12
Pennsylvania Ohio
Q2'12
Other
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Share of Healthcare VC by State - Dollars of Funding

Last Five Quarters
18% 30% 2%
31% 2% 3% 3%
27% 4% 2% 26%
23% 4% 6% 7% 23%
32% 1% 5% 2% 15%
22%
46%
39%
41%
38%
45%
Q2'11 California
Q3'11 Massachusetts
Q4'11 Texas
Q1'12 Pennsylvania Ohio
Q2'12 Other
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Healthcare
Massachusetts Healthcare Continues to Stumble
29
Series D and E+ funding rounds rise to five quarter highs in share of deals and dollars as early stage Healthcare activity takes a step back.
Share of Healthcare VC by Series - Number of Deals

Last Five Quarters
10% 14% 18%
9% 12% 18%
7% 15% 17%
9% 11% 14%
10% 16% 16%
26%
27%
19%
25% 19%
28% 5%
Q2'11
23% 11%
Q3'11
34%
27%
29%
7%
Q4'11
14%
Q1'12
10%
Q2'12
Seed
Series A
Series B
Series C
Series D
Series E +
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Share of Healthcare VC by Series - Dollars of Funding

Last Five Quarters
13%
10% 18%
7% 20%
22%
16%
20%
16% 34% 23% 26% 19%
25%
21%
21%
27%
28% 30% 18%

0% Q2'11 10% 1% Q3'11
21% 16% 0% Q4'11 1% Q1'12
20% 18%
1% Q2'12
Seed
Series A
Series B
Series C
Series D
Series E +
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Healthcare
Late Stage Healthcare VC Activity Climbs to New High
30
Drug development overtakes pharmaceuticals in funding share. Nonetheless, medical devices and biotech own over half of all healthcare deals and dollars.
VC Deal Volume (#) in Healthcare by Industry, Q2 2012

Medical Devices & Equipment
3%
3% 1%
2% 10%
8%
Biotechnology
Drug Development
Pharmaceuticals / Drugs
6%
40%
Disease Diagnosis
Drug Discovery
Medical Facilities & Services

Medical Equipment & Supplies
9%
18%
Medical Information
All Other
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VC Investment ($) in Healthcare by Industry, Q2 2012

2%
3% 3% 3% 46% 2%
Medical Devices & Equipment Biotechnology Drug Development Pharmaceuticals / Drugs
Disease Diagnosis
Drug Discovery
11%
Medical Facilities & Services
12%
Medical Equipment & Supplies
Medical Information
14%
All Other
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Healthcare
Medical Devices and Biotech Claim Majority of Healthcare VC
31
Median deal size of all funding rounds increase significantly on a sequential basis. Deal size hits new five quarter high for Series A, B, D, and E financings.
Healthcare Median Deal Size by Quarter

($ Million) $16.5 $15.3
$11.3 $9.3
$5.0
$0.8 Seed Series A Q2'11 Series B Q3'11 Series C Q4'11 Series D Q1'12 Series E + Q2'12
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Healthcare
Healthcare Deal Size Increases Across the Board
32
GREEN & CLEAN TECH
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33
Green Tech Not Much Without Mega Deals

Green
The presence of green tech mega deals elevates funding totals to five quarter high, but deal activity continues to tumble down to a five quarter low. Funding is up 62% and deal activity is down 37% vs. Q211.
Green VC Investment and Deal Volume Trend

Last Five Quarters 78 70 69 56 49 $1,471 $1,220 $906 $1,281
$764
Q2'11
Q3'11
Q1'12
Q2'12
www.cbinsights.com
www.cbinsights.com
34
California Dominates; Colorado Sees Increased Deal Activity

Green
California dominates Green Tech deals and dollars while Mass maintains its #2 spot. Both Colorado and Texas take a sizable chunk of deal share, but the relatively small size of those deals translates to small portions of funding share.
Quarter Highlights
2% 2% 4% 2%
VC Deal Volume (#) in Green by State, Q2 2012

2% 2%
2%
California Massachusetts Texas Colorado Minnesota West Virginia
49 deals | $1,471M
Top Deals
Fisker Automotive Bloom Energy Sapphire Energy Harvest Power SunRun
10% 8% 13% 53%
Rhode Island Arizona
New Jersey Alabama All Other

www.cbinsights.com
Top Cities
Irvine, CA 1 deals | $392M San Diego, CA 6 deals | $225M Sunnyvale, CA 1 deals | $150M Waltham, MA 2 deals | $112M San Francisco, CA 3 deals | $112M San Jose, CA 2 deals | $61M Milpitas, CA 1 deals | $55M Austin, TX 4 deals | $49M Campbell, CA 1 deals | $48M El Segundo, CA 1 deals | $40M
VC Investment ($) in Green by State, Q2 2012

3% 1% 1% 1% 1%
California
3%
Massachusetts
Texas
10%
Colorado
Minnesota West Virginia Rhode Island Arizona New Jersey Alabama All Other
www.cbinsights.com
80%
www.cbinsights.com
35
Cali Share of Green Tech Rockets to New Highs

Green
Massachusetts deal share increases to a five quarter high, but is overshadowed as California takes over half of all green tech deals and nearly four-fifths of funding.
Share of Green VC by State - Number of Deals
Last Five Quarters
29% 40% 10% 3% 4% 11% 43%
32%
27% 8% 0% 12%
10% 3% 1% 10%
4% 1% 1% 10%
7% 4% 7% 9%
53% 36%
43%
39%
41%
Q2'11 California
Q3'11 Massachusetts
Q4'11 Illinois
Q1'12 Pennsylvania Texas
Q2'12 Other
www.cbinsights.com
Share of Green VC by State - Dollars of Funding

Last Five Quarters
11% 22% 36% 10% 4% 6% 15% 16% 4% 21% 6% 8% 8% 14%
8% 3% 10%
12% 1% 0% 7%
79% 59%
44%
53%
43%
Q2'11 California
Q3'11 Massachusetts
Q4'11 Illinois
Q1'12 Pennsylvania Texas
Q2'12 Other
www.cbinsights.com
www.cbinsights.com
36
Early Stage Funding Share Falls to Five Quarter Low

Green
Green tech deal share is mostly evenly distributed, but large Series D deals take up 43% of funding and boosts late stage dollar share.
Share of Green VC by Series - Number of Deals
Last Five Quarters
9% 19%
13% 12% 19%
14%
11% 15%
16% 18%
8% 21%
22%
35% 18% 32% 32% 24% 24%
16%
22%
24%
14% 14% Q2'11 Seed 0% Q3'11 Series A Series B
16%
13%
8% Q4'11 Series C
4% Q1'12 Series D
8% Q2'12 Series E +
www.cbinsights.com
Share of Green VC by Series - Dollars of Funding

Last Five Quarters
12% 23% 42%

30%
29%
20%
10% 9% 43% 16% 30% 44% 18% 22% 25%

11%
28%
21%
18% 6% Q3'11 15% Q4'11
8% Q2'11
6% Q1'12
8% 3% Q2'12
Seed
Series A
Series B
Series C
Series D
Series E +
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www.cbinsights.com
37
Renewables Fall to Under 30% for the First Time

Green
Although renewables retain the top spot in both deals and dollars, overall downward trends in deal share over the last five quarters shows that the Green Tech sector is still very much in flux as VCs place their bets in different industries.
Share of Green VC by Industry - Number of Deals
Last Five Quarters
46%
45% 56% 57%
51%
3% 5% 8%
1% 4% 3%
1% 6%
4% 5% 7% 5%
2% 8% 10%
38%
36%
32%
34%
29%
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
Renewables Basic Materials Oil & Gas Production & Exploration
Electronic Components Automobile Manufacturing Other

www.cbinsights.com
Share of Green VC by Industry - Dollars of Funding

Last Five Quarters
22% 14% 1% 8% 51% 46%
22% 4% 4% 5% 5%
25%
27% 3% 4%
6% 55% 43%
2% 3% 59%
46%
42%
Q2'11
Q3'11
Q4'11
Q1'12 Electronic Components Automobile Manufacturing Other
Q2'12
Renewables Basic Materials Oil & Gas Production & Exploration
www.cbinsights.com
www.cbinsights.com
38
Green Tech Deal Sizes Also Increasing

Consistent with trends weve seen in the other sectors, the median deal size of green tech deals has also been increasing. With the exception of Series E+, deal sizes are up for all financing rounds, reaching new five quarter highs in Seed, Series B, C, and D rounds.
Green Median Deal Size by Quarter

($ Million)
$40.0
$20.9
$10.0 $3.0
$1.0
$11.0
$10.1
Seed
Series A Q2'11
Series B Q3'11
Series C Q4'11
Series D Q1'12
Series E + Q2'12
Overall
www.cbinsights.com
www.cbinsights.com
Green
39
CALIFORNIA
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40
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41
Cali Recovers With a Bang

California
After Californias precipitous drop in funding in the previous quarter, deals are up 17% and funding is up 64%, sending Cali 5 quarter highs on both deals and dollars.
California VC Investment and Deal Volume Trend

Last Five Quarters 341 363 315 $3,833 300 $3,836 309 $4,683
$3,671
$2,857
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
$ Funding
# of Deals
www.cbinsights.com
www.cbinsights.com
42
Mega Deals Spur Cali Automotive and Energy

California
Boosted by Fisker Automotives $392M deal and numerous Green Tech mega deals, Californias automotive and energy sectors climb near the top of funding share. Nonetheless, internet, mobile, and healthcare continue to lead Calis VC activity.
Quarter Highlights
VC Deal Volume (#) in California by Sector, Q2 2012
1% 3% 4% 4% 49% 1% 3%
Internet Healthcare Energy & Utilities Mobile & Telecommunications Electronics Computer Hardware & Services Industrial Software (non-internet/mobile) Financial
363 deals | $4,683M

Top Sector
# of Deals Internet $ of Funding Internet
5%
Top Deals
Fisker Automotive Bloom Energy Sapphire Energy Legendary Entertainment Castlight Health
13%
3%
14%
Automotive & Transportation All Other

www.cbinsights.com
Top Cities
San Francisco 106 deals | $1156M Irvine 5 deals | $423M Mountain View 28 deals | $422M San Diego 21 deals | $416M Palo Alto 31 deals | $373M Sunnyvale 13 deals | $235M Redwood City 11 deals | $181M San Jose 10 deals | $137M Milpitas 3 deals | $123M Menlo Park 10 deals | $108M
VC Investment ($) in California by Sector, Q2 2012

Internet Healthcare Energy & Utilities
3%
0%
5%
9%
34%
Mobile & Telecommunications Electronics
5% 4%
Computer Hardware & Services

Industrial
6%
9% 15%
Software (non-internet/mobile)
Financial Automotive & Transportation All Other
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10%
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43
Healthcare & Internet Combine for Over 60% of Deals

California
Internet exceeds its previous deal share highs as healthcare maintains its hold on the #2 spot in both share of deals and dollars. Meanwhile, Calis energy & utilities sector falls to five quarter low in terms of deal share.
Share of VC in California by Sector - Number of Deals
Last Five Quarters
22%
22% 3%
18%
18% 4% 15% 6%
15% 5% 15% 5% 14%
17%
4% 12% 3% 14%
7% 9% 5%
15%
6% 13% 16%
42%
38%
41%
46%
49%
Q2'11 Internet
Q3'11 Energy & Utilities Electronics
Q4'11 Healthcare
Q1'12 Mobile & Telecommunications Other
Q2'12
www.cbinsights.com
Share of VC in California by Sector - Dollars of Funding

Last Five Quarters
25% 6% 7% 6% 24%
19% 4% 11% 9%
17%
17% 5% 8% 17% 20%
16% 27%
6% 9%
10%
19%
6% 9%
10%
15%
32%
40%
33%
40%
34%
Q2'11 Internet
Q3'11
Q4'11 Healthcare
Q1'12
Q2'12
Energy & Utilities

Electronics
Mobile & Telecommunications

Other
www.cbinsights.com
www.cbinsights.com
44
Seed Deals Take Nearly 1/4 of Deals

California
Although Series A deal share falls to five quarter low, seed deals increase dramatically, leading overall early stage deal share to reach a five quarter high. From a funding perspective, later stage funding reaches new highs as well.
Share of VC in California by Series - Number of Deals
Last Five Quarters
12% 12% 16% 18%
9% 11% 16%
11% 10% 14% 20%
8% 13% 15% 17%
11%
11%
12%
15%
22%
27% 29% 29% 32% 30%
13%
13% Q3'11
Seed Series A
13% Q4'11
Series B Series C
17% Q1'12
Series D
24% Q2'12
Series E +
www.cbinsights.com
Q2'11
Share of VC in California by Series - Dollars of Funding

Last Five Quarters
17% 28% 17% 16% 27%
20% 14%
20%
21%
25% 22%
28%
18% 28%
22%
22% 13% 14% 2% Q2'12 Series E +

www.cbinsights.com
20%
26%
14% 16%
1% Q4'11
18% 1% Q2'11 Seed
12% 1% Q3'11
16% 2% Q1'12 Series C Series D
Series A
Series B
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45
MASSACHUSETTS
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46
Massachusetts Hits Five Qtr Low on Deals

Deal activity remains consistent with Q1 2012, but funding increases 18%. YoY, deals and dollars have gone down 18% and 33%, respectively.
Massachusetts VC Investment and Deal Volume Trend

Last Five Quarters 92 $1,143 83 76 $959 $710 75 $768 $650 93
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
$ Funding
# of Deals
www.cbinsights.com
www.cbinsights.com
Massachusetts
47
Internet Deal Count Overtakes Healthcare in Massachusetts

Healthcare barely maintains top position in funding share, but internet convincingly leads Massachusetts in deal share. Meanwhile, Energy easily retains its #3 spot in terms of funding.
Quarter Highlights
VC Deal Volume (#) in Massachusetts by Sector, Q2 2012
75 deals | $768M
0%
Healthcare
1%
7% 9% 1% 7%
9%
24%
Top Sector
# of Deals Internet $ of Funding - Internet
Internet Energy & Utilities Industrial Mobile & Telecommunications Software (non-internet/mobile) Business Products & Services Computer Hardware & Services Risk & Security All Other
www.cbinsights.com
Top Deals
Harvest Power OvaScience Mitralign Veracode Rethink Robotics
39%
Top Cities
Cambridge 30 deals | $259M Waltham 4 deals | $129M Boston 9 deals | $85M Burlington 3 deals | $57M Lexington 2 deals | $37M Newton 4 deals | $37M Tewksbury 1 deals | $35M Needham 2 deals | $26M Woburn 2 deals | $21M Avon 1 deals | $14M
VC Investment ($) in Massachusetts by Sector, Q2 2012

2% 3%
8% 4%
0% 4%
3%
Healthcare
Internet
29%
Energy & Utilities Industrial Mobile & Telecommunications Software (non-internet/mobile)
18% 28%
Business Products & Services

Computer Hardware & Services Risk & Security All Other
www.cbinsights.com
www.cbinsights.com
Massachusetts
48
Internet and Mobile Continue to Gain Momentum

Healthcare, which took at least half of VC dollars over the previous four quarters, falls dramatically. Internet and mobile both hit 5 quarter deal and funding highs.
Share of VC in Massachusetts by Sector - Number of Deals

Last Five Quarters
14% 8% 13% 7%
13% 5% 5% 6% 30%
13% 9% 10% 6%
23%
17% 8% 11% 3% 24%
15% 9% 7% 7%
26%
39%
33%
41%
40%
38% 24%
Q2'11
Q3'11 Healthcare Energy & Utilities
Q4'11 Internet
Q1'12
Q2'12
Software (non-internet/mobile) Other

www.cbinsights.com
Share of VC in Massachusetts by Sector - Dollars of Funding

Last Five Quarters
9% 5% 5% 6% 24%
8% 2% 3% 22% 13%
14%
3% 10% 5%
12% 6% 5% 11% 15%
13%
8% 3%
18%
17%
28% 52% 53% 51% 51% 29%
Q2'11
Q3'11 Healthcare
Energy & Utilities
Q4'11 Internet
Q1'12
Q2'12
Software (non-internet/mobile)
Other
www.cbinsights.com
www.cbinsights.com
Massachusetts
49
Early Stage Deals Account for Nearly Half of VC Activity

On the back of a strong quarter for Series A, early stage deals rise to a five quarter high in deal share.
Share of VC in Massachusetts by Series - Number of Deals

Last Five Quarters
7%
11%
8% 14% 12%
11%
7% 11% 22%
4% 9%
16%
12% 15% 21%
13%
27%
22% 32%
19%
28%
24%
34%
25%
36%
13% Q2'11 Seed
10% Q3'11 Series A
16% Q1'12 Series D
12% Q2'12 Series E +

www.cbinsights.com
Share of VC in Massachusetts by Series - Dollars of Funding

Last Five Quarters
6% 24% 22% 16%

29%
15%
14% 15% 11%

17% 31% 19%
28% 23%
9%
33%
30%
17%
27% 17% 29% 14% 1% Q1'12 Series D Series E +

www.cbinsights.com
18% 1% Q2'11 Seed
12% 1% Q3'11 Series A Series B
18% 1% Q2'12
1% Q4'11 Series C
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Massachusetts
50
NEW YORK
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51
New Yorks deal count slightly increases vs. Q112, but is up a more impressive 36% from Q211. Meanwhile, funding is up 49% from Q112, but is actually down 7% from Q211.
New York VC Investment and Deal Volume Trend

Last Five Quarters 86 61 $831 73 81 83
$539
$568 $500 $336
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
$ Funding
# of Deals
www.cbinsights.com
www.cbinsights.com
New York
New York Recovers After Weak Showing in First Quarter
52

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Newsletter
Email
info@cbinsights.com
Telephone
646-964-5044
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53
Internet continues to command a convincing majority of deal and funding share. Early stage deals push mobile to stable #2 spot in deal volume further entrenching NY as a tech town.
Quarter Highlights
VC Deal Volume (#) in New York by Sector, Q2 2012
4% 1% 2%
Internet
83 deals | $500M
Top Sector
2%
5%

Financial
15%
Healthcare
Top Deals
10gen Etsy Moda Operandi Ideeli Yext
Electronics
71%
Business Products & Services
Food & Beverages

All Other
www.cbinsights.com
Top Cities
New York 76 deals | $422M Brooklyn 4 deals | $50M Buffalo 1 deals | $18M Geneva 1 deals | $5M
VC Investment ($) in New York by Sector, Q2 2012

2%
1% 3%
Internet
6% 5%

Financial Computer Hardware & Services
Healthcare
Electronics Business Products & Services
82%
Food & Beverages

All Other
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www.cbinsights.com
New York
New York VC Still Primarily a One-Trick Pony: Internet
54
Internets funding share climbs to five quarter high. Combined with mobile deals, it is clear that tech investments continue to dominate New Yorks VC activity.
Share of VC in New York by Sector - Number of Deals
Last Five Quarters
10% 5%
15%
10% 5% 3% 2% 7%
15% 7% 1% 18%
10% 6% 1% 1% 14%
7% 5% 2% 14%
70%
72%
59%
68%
71%
Q2'11 Internet
Q3'11
Q4'11
Q1'12 Mobile & Telecommunications Computer Hardware & Services Other
Q2'12
Financial Healthcare
www.cbinsights.com
Share of VC in New York by Sector - Dollars of Funding

Last Five Quarters
9% 1% 17%
14% 7% 4% 1% 4%
11% 16%
3% 6%
11% 6% 7% 9% 12%
9% 3% 5%
73%
83% 71% 64% 55%
Q2'11 Internet
Financial
Q3'11
Q4'11
Q1'12
Q2'12

Healthcare
Other
www.cbinsights.com
www.cbinsights.com
New York
Over 70% of Deals and 80% of Funding Goes to Internet
55
Seed deals reach new high in deal share as early stage deal share increases for the third straight quarter. Early stage funding share decreases implying smaller investments in more early stage companies.
Share of VC in New York by Series - Number of Deals

Last Five Quarters
7% 12% 25%
8% 5% 14%
3% 6% 13% 18%
4% 6% 9%
4% 5% 10% 14%
19%
26% 33% 36%
26%
42%
32% 30% 15% Q3'11 Seed Series A

18%
25%
31%
Q2'11
Q4'11 Series B Series C
Q1'12 Series D
Q2'12 Series E +
www.cbinsights.com
Share of VC in New York by Series - Dollars of Funding

Last Five Quarters
4% 28% 32%
3%
13%
14%
11%
22% 11% 23%
21% 10% 30% 25% 23%
15%
26% 20%
19% 13% 3% Q2'11 Seed
23% 37% 13% 2% Q3'11 Series A 30% 21% 2% Q4'11 Series B Series C 5% Q1'12 Series D 3% Q2'12 Series E +
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www.cbinsights.com
New York
Early Stage Deal Share Continues to Surge
56
WASHINGTON
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57
Deal activity is slightly up compared to Q211 and Q112, but funding is up 136% vs. Q211 and 51% vs. Q112.
Washington VC Investment and Deal Volume Trend

Last Five Quarters 32 29 28 24 28
$312
$197 $132 $146
$206
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
$ Funding
# of Deals
www.cbinsights.com
www.cbinsights.com
Washington
Call It a Comeback? Washington VC Hits Five Quarter High
58
Internet and healthcare take 85% of all deals and 95% of all dollars. With the exception of mobile, other sectors fail to make a dent on Washington VC activity.
Quarter Highlights
VC Deal Volume (#) in Washington by Sector, Q2 2012
3% 3%
Internet Mobile & Telecommunications
32 deals | $312M
Top Sector
22%
Healthcare Computer Hardware & Services Consumer Products & Services Energy & Utilities
Top Deals
Donuts Alder Biopharmaceuticals Kona Medical Avalara SEOmoz
9%
63%
Food & Beverages Software (non-internet/mobile) All Other

www.cbinsights.com
Top Cities
VC Investment ($) in Washington by Sector, Q2 2012

Internet Mobile & Telecommunications
Healthcare
36%
Computer Hardware & Services Consumer Products & Services Energy & Utilities Food & Beverages Software (non-internet/mobile) All Other
www.cbinsights.com
59%
Sammamish 1 deals | $100M Seattle 21 deals | $96M Bellevue 3 deals | $41M Bothell 1 deals | $38M Bainbridge Island 1 deals | $20M Redmond 3 deals | $16M
5%
www.cbinsights.com
Washington
Internet and Healthcare Sectors Dominate Washington
59
After briefly taking over the #2 spot from healthcare in Q112, the mobile sectors share of deals and funding falls dramatically.
Share of VC in Washington by Sector - Number of Deals
Last Five Quarters
31% 0% 7% 17% 17%
14% 0% 4% 21% 14%
8% 4% 4% 29%
11% 4% 4% 18%
6%
22% 9%
21%
17%
63%
46%
28%
38%
43%
Q2'11
Q3'11 Internet Healthcare
Q4'11
Q1'12
Q2'12
Mobile & Telecommunications Computer Hardware & Services Other

www.cbinsights.com
Consumer Products & Services
Share of VC in Washington by Sector - Dollars of Funding

Last Five Quarters 5% 6%
30%
23%
14%
5% 3% 9% 36% 14%
1% 17% 8%
36% 17% 13%

59% 4%
12% 12%
40%
45%
52% 39%
Q2'11 Internet
Healthcare
Q3'11
Q4'11
Q1'12 Mobile & Telecommunications

Q2'12
Consumer Products & Services
Other
www.cbinsights.com
www.cbinsights.com
Washington
Internet Rises to 5 Qtr High, but Mobile Falls to New Lows
60
Seed deal share more than doubles, leading early stage VC to lead in deal and funding share. Later stage deals continue to be rare in Washington.
Share of VC in Washington by Series - Number of Deals
Last Five Quarters
4% 27%
11% 21%
5% 5% 9%
23%
4%
15%
11%
3% 6%
19%
15% 27% 29%
13%
31% 14% 27% 11% 28% 12% Q2'11 Seed

14%
45%
44%
11% Q1'12 Series D Q2'12 Series E +

www.cbinsights.com
Q3'11 Series A
Share of VC in Washington by Series - Dollars of Funding

Last Five Quarters
3%
12%
12% 16%
5%
4% 19%
31% 18% 14% 15% 14%
43%
33%
8% 21%
38% 37%
42%
42% 33%
11% 11% 1% Q2'11 Seed 6% 1% Q3'11 Series A 2% Q4'11 Series B Series C 0% Q1'12 Series D 3% Q2'12 Series E +
www.cbinsights.com
www.cbinsights.com
Washington
Washington Experiences Influx of Seed Deals
61
TEXAS
www.cbinsights.com
62
Despite a strong quarter for overall VC activity, Texas experienced a decline in both deals and dollars. Furthermore, due to a lack of megadeals, funding fell 53% from Q112 to a five quarter low.
Texas VC Investment and Deal Volume Trend

Last Five Quarters 39 34 24 $476 $336 27 39
$312
$304
$157
Q2'11
Q3'11
Q4'11
Q1'12
Q2'12
$ Funding
# of Deals
www.cbinsights.com
www.cbinsights.com
Texas
Funding and Deals Fall Sharply in Texas
63
VC activity in Texas is diverse, as internet, healthcare, energy, electronics, and computer hardware all contribute significant portions to deal and funding share.
Quarter Highlights
VC Deal Volume (#) in Texas by Sector, Q2 2012
27 deals | $157M
Healthcare
12% 8%
11%
15%
Internet Energy & Utilities Computer Hardware & Services Electronics
Top Sector
# of Deals Internet $ of Funding Healthcare
Top Deals
SolarBridge Technologies WhiteGlove Health NextIO Alert Logic OrthoAccel Technologies
27% 15%
Mobile & Telecommunications Financial Industrial
8% 4%
All Other
www.cbinsights.com
Top Cities
Austin 20 deals | $128M Houston 2 deals | $22M Frisco 1 deals | $4M Richardson 1 deals | $1M Dallas 2 deals | $1M Amarillo 1 deals | $0M
VC Investment ($) in Texas by Sector, Q2 2012

Healthcare
6% 5% 22%
Internet
Energy & Utilities Computer Hardware & Services
14%
Electronics
17%
19%
Financial Industrial All Other

www.cbinsights.com
17%
www.cbinsights.com
Texas
Texas Deal and Funding Spread Across Many Sectors
64
Texas registers one of the most evenly distributed quarters in terms of funding. Healthcare is the only sector that takes over 20% of VC dollars.
Share of VC in Texas by Sector - Number of Deals
Last Five Quarters
33%
29%
23% 42% 10% 8% 4% 25% 10%
33%
10% 8%
13%
6% 3% 15%
15% 7% 4%
26% 23% 13% Q2'11 21% Q3'11 Healthcare Energy & Utilities Electronics 29%
26%
26% 23%
15% Q2'12
Q4'11 Internet
Q1'12
Computer Hardware & Services Other

www.cbinsights.com
Share of VC in Texas by Sector - Dollars of Funding

Last Five Quarters
14% 40% 8% 3%
12% 8% 57% 8% 16%
17% 13% 16% 16% 18%
12% 8% 25% 11% 4%

Q2'11
36% 24% 21% 35% 31% 18%

Q3'11 Healthcare
21%
Q2'12
8%
Q4'11 Internet Q1'12
Energy & Utilities Electronics
Computer Hardware & Services Other

www.cbinsights.com
www.cbinsights.com
Texas
Energy and Healthcare Slip in Texas
65
Seed Rounds Attain Five Qtr High in Deal Share

Despite seed VC rising for the third straight quarter, overall early stage deal share in Texas has decreased for the third straight quarter.
Share of VC in Texas by Series - Number of Deals
Last Five Quarters
9% 18%
9% 9% 24%
5%
17% 9% 4% 26%
13% 13%
29% 4% 8%
26%
34% 21% 35% 39% 24% 3% Q2'11 Seed 15% 9% Q3'11 Series A 4% Q4'11 Series B Series C 11% Q1'12 Series D 29%
24%
17% 13% Q2'12 Series E +

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Share of VC in Texas by Series - Dollars of Funding

Last Five Quarters
17% 28% 17% 16%

27%
20% 14%
20%
21%
25% 22%
28%
18% 28%
22%
22% 13% 14% 2% Q2'12 Series E +

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20%
26%
14%
18% 1% Q2'11 Seed
12% 1% Q3'11 Series A
16% 1% Q4'11 Series B Series C
16% 2% Q1'12 Series D
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Texas
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Definitions Ensuring Data Integrity

Whats Included in our Quarterly Venture Capital Numbers? What is not?
Given the importance of venture capital in spurring innovation and entrepreneurship, measuring venture capital activity accurately is important. We encourage you to review the methodology and definitions employed by us to better understand the numbers presented in this report. If you have any questions about our definitions or methodological principles, we encourage you to reach out to us directly.
What is included?
Equity financings into emerging companies. Funding must come from venture capital firms including corporate venture groups. Fundings of only private companies. Public companies of any kind on any exchange (including Pink Sheets) are excluded from our numbers even if they received investment by a venture firm(s) Companies must be headquartered in the USA. Our geographic data is based on the city and state where the company receiving investment is headquartered. If a company has a satellite office/presence in multiple cities or was founded in a particular city but has moved its HQ, our results reflect only this HQ address. Only include the investment made in the quarter for tranched investments. If a company does a second closing of its Series B round for $5M and previously had closed $2M in a prior quarter, only the $5M is reflected in our results. Round #s reflect what has closed not what is intended. If a company indicates the closing of $5M out of a desired raise of $15M, our numbers reflect only the amount which has closed. Only verifiable fundings are included. Fundings are verified via (1) various federal & state regulatory filings (2) direct confirmation with firm or investor or (3) press release. Funding close date matters. Fundings are provided based on funding close date and not on announcement date.
What is excluded?
Angel investment. These are not included in numbers unless an investment round included Angels investing alongside a venture capital firm or corporate venture group. No contingent funding. If a company receives a commitment for $20M subject to hitting certain milestones but first gets $8M, only the $8M is included in our data. No business development/R&D arrangements whether transferable into equity now, later or never. If a company signs a $300M R&D partnership with a larger corporation, this is not equity financing nor is it from venture capital firms. As a result, it is not included. Buyouts, Consolidations and Recapitalizations. All three of these of transaction types are commonly employed by private equity firms and are tracked by CB Insights. However, they are excluded for the purposes of this report. Private equity investments into companies which may have received venture capital investment prior are also not included. Private placements. These investments also known as PIPEs (Private Investment in Public Equities) even if made by a venture capital firm(s) are not included. Debt/loans of any kind. Venture debt or any kind of debt/loan issued to emerging, startup companies even if included as an additional part of an equity financing is not included. If a company receives $3M with $2M from venture investors and $1M in debt, only the $2M is included in these statistics. Government funding. Grants, loans, equity financings by the federal government, state agencies or public-private partnerships to emerging, startup companies are not included. Strictly venture or corporate venture outfits. Incubator investments. Investments of money as equity or debt and/or services by incubators are not included. Strategic corporate investments. Corporations making strategic investments in companies but not as part of a specific organized venture group are not included.
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Q2 2012 Venture Capital Activity Report - CB Insights - Pre-Release Copy (Final)

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Venture Capital Activity Report | Q2 2012

DEFINITIONS & DATA INTEGRITY

Venture Capital Activity Report | Q2 2012

Q2 2012 This Quarter in Venture Capital

Venture Capital Activity Report | Q2 2012

$8.1B in 812 Deals Biggest Quarter Since Dot Com Era

Quarterly VC Investment and Deal Volume Trend

Venture Capital Activity Report | Q2 2012

Cali Gains on Deals. NY Holds #2 Spot for 2nd Straight Qtr

Share of Venture Capital by State - Number of Deals

31% 4% 4% 11% 11%

31% 3% 3% 10% 12%

31% 4% 5% 11% 10%

Q4'11 New York Texas

Venture Capital Activity Report | Q2 2012

The Juggernaut Cali Funding Rises Above the Rest

Share of Venture Capital by State - Dollars of Funding

Q4'11 New York Texas

Venture Capital Activity Report | Q2 2012

Venture Capital Activity Report | Q2 2012

Deals and Funding Consistently High Throughout Q212

Monthly VC Investment and Deal Volume Trend

$2.4 $2.2 $2.0 $1.7

Venture Capital Activity Report | Q2 2012

Early Stage Deals Account for Half of All VC Activity

12% Q2'11 Seed

15% Q3'11 Series A

14% Q4'11 Series B Series C

22% Q2'12 Series E +

Share of Venture Capital by Series - Dollars of Funding

20% 22% 21% 25% 21% 26% 21% 1% Q4'11

17% 17% 2% Q2'12

Venture Capital Activity Report | Q2 2012

Healthcare Slips Back on Deals While Internet Grows

19% Q1'12 Internet Software (non-internet/mobile) Mobile & Telecommunications

Healthcare Energy & Utilities Computer Hardware & Services Other

Share of Venture Capital by Sector - Dollars of Funding

Healthcare Energy & Utilities Computer Hardware & Services Other

Internet Software (non-internet/mobile) Mobile & Telecommunications

Venture Capital Activity Report | Q2 2012

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Venture Capital Activity Report | Q2 2012