Mark spoke about the state of the venture capital industry from both a national and regional perspective. He discussed where VCs are investing, the decline in the number of venture firms, the exit climate and what's happening in Washington that's important to the venture and entrepreneurial communities.
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Mark G. Heesen, President, NVCA - A CVG Second Thursday Event, 6/13/13
1. THANK YOU CVG SPONSORS
B Round
A Round
Venture Capital Sponsors Professional Service Firms
2. Mark Heesen
President, National Venture Capital Association
Welcome
Nat Brinn
Principal, Vital Financial
President, CVG Hartford Chapter
@CTVenture
3. Three Minute Pitches
@CTVenture @CTNEXT
Jeremy McCool
Joseph Glick
Paul Hallenbeck
Rhodemann Li
Chris Woods
Expertool Paradigm, LLC
4. Mark Heesen
President, National Venture Capital Association
Introduction
Jacqueline Pennino Scheib
Partner, Robinson & Cole LLP
Board Member, CVG Hartford Chapter
@CTVenture
5. Mark G. Heesen
President
National Venture
Capital Association
The State of Venture Investing and
Observations on the Industry
@CTVenture
6. The Number of US VC Firms Has Peaked
At Year
End
# Active
Firms
Capital
Managed
1970 28 $1B
1980 87 $4B
1990 100 $28B
2000 1,053 $224B
2012 522 $199B
Source: 2013 NVCA Yearbook, prepared by Thomson Reuters, figure 1.04
8. First Fundings - VCs Continue To Invest in Promising
Companies –
1,000-1,300 Considered Healthy; Life Sci particularly slow now
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
# Cos 1,430 2,469 3,390 1,234 850 776 975 1,076 1,280 1,417 1,305 828 1,086 1,325 1,203 263
#FirstTimeFundings
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
9. The Number of First Fundings of Life Sciences
Companies is Way Down…
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
# LS FF 153 193 203 167 191 170 178 168 190 205 275 270 256 173 188 180 140 20
0
50
100
150
200
250
300
Note: For this chart, biotech, pharmaceuticals, med devices, and therapeutics are included. HC services is not.
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
10. Investment Trends from
NVCA 2013 Yearbook
• A record 48 states and DC reported venture deals in 2012
• That said, a record 53% of the $ went to CA cos
• In 2012, 522 traditional and CVC groups invested vs 1,053
in bubble
• In 2012, 10 largest funds raised 48% of capital leaving 173
funds with the other 52%
• # of IPOs down from 2011 to 2012, but total IPO valuation
$122.3 (hi since 1986) and proceeds of 21.5B
• Corporate VC 8.2% of dollars and engaged in 15.2% of
deals
• 51.8% of deals are seed and early – highest since 1985
Source: NVCA 2013 Yearbook, prepared by Thomson Reuters
10
11. A Closer Look at Recent Connecticut Investing
Note that data “cuts” can be done from the historical trend
data section of www.pwcmoneytree.com or from the
National Aggregate Spreadsheet which can be downloaded
from that site.
11
13. First Fundings in Connecticut
Have Been Averaging 12-20/year
Recently Big $ for Biotech, Almost ½ the Deals into Software
-
5
10
15
20
25
30
35
40
45
50
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q13
# Cos 30 39 47 19 13 7 9 10 8 18 16 10 21 19 12 3
#FirstTimeFundings
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
14. Recent Connecticut Investment by Dollars -
Biotech & Medical Get the Majority of $
Biot
41%
SW
23%
Ind/Ener
16%
Med Dev
10%
IT Svcs
5%
Other
5%
VC Dollar Investment – 2Q 2011 to 1Q 2013
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
15. Recent Connecticut Investment by # Deals -
Software Gets More Than 1/3 of the Attention
SW
40%
Biotech
17%
Ind/Ener
11%
Med Dev
10%
IT Svcs
6%
Other
16%
VC Dollar Investment – 2Q 2011 to 1Q 2013
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,
Data: Thomson Reuters
16. The Exit Scene -
the importance of acquisitions has become clear
over the past several years
but the IPO market remains the key!
16
20. 2012 Was First Post-Bubble Year That
Distributions Exceeded Contributions in the US
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Dist/Contrib 149% 226% 92% 35% 42% 64% 96% 71% 95% 47% 47% 94% 94% 162%
0%
50%
100%
150%
200%
250%
US VC - Ratio of LP Distributions to LP
Contributions
Source: Cambridge Associates, NVCA
21. Recent Battles
• J.O.B.S. Act of 2012
• VC fund registration/regulation
• Taxation of long term capital gains taken as
carried interest
• FDA reform
• Clean technology science funding/supportive
policies (ARPA-E support)
• Healthcare
• Internet regulation
• Preserving investment company accounting
21
24. Welcome New CVG Members!
Jon Brodeur, Emme, Inc.
Glen Cohen, Click Flick LLC
Carrie Collins, CTNEXT
Len Doherty, L.J. Doherty & Associates
Joseph Dornfried, Carmody & Torrance LLP
Ryan Duques, TutaPoint.com
Joseph Glick, Expertool Paradigm LLC
Ansong Sam Omari, Afram Integrated Biotechnologies
Andy Zaback, Long Meadow Capital Partners
25. CVG Upcoming Hartford Events
Boardroom Series
7:30 AM – 9:00 AM
Second Thursday
4:30 PM – 7:00 PM
Fall Schedule
to be
announced!
October 10
Advanced Manufacturing
January 2014
Healthcare IT
26. CVG Regional Upcoming Events
Boardroom Series
7:30 AM – 9:00 AM
Second Thursday
4:30 PM – 7:00 PM
June 14
M&A: Tax Considerations
Stamford
June 19
Employment & Immigration Issues
New Haven
July 11
Grow with the Grove
New Haven
August 8
Summer Networking Party
Stamford
27. THANK YOU CVG SPONSORS
B Round
A Round
Venture Capital Sponsors Professional Service Firms