Venture Capital Investment Plummets in Q1 2009 to 12-Year Low, According to the MoneyTree Report

Market Wire, April, 2009

Investments in Later stage deals fell 35 percent in dollars and 22 percent in deals to $1.3 billion going into 199 rounds. Later stage deals accounted for 36 percent of total deal volume in Q1 compared to 29 percent in Q4 2008 when $2.1 billion went into 254 deals. The average Later stage deal in the first quarter was $6.7 million, which was down from the prior quarter when the average Later stage deal size was $8.1 million.

First-Time Financings

The dollar value of first-time deals (companies receiving venture capital for the first time) declined by 48 percent to $596 million going into 132 first rounds, compared to the fourth quarter of 2008 when $1.1 billion went into 246 first-time deals. First-time financings accounted for 20 percent of all dollars and 24 percent of all deals in the first quarter compared to 20 percent of all dollars and 28 percent of all deals in the fourth quarter of 2008.

Companies in the Biotechnology, Industrial/Energy and Software sectors received the highest level of first-time dollars. The average first-time deal in the first quarter was $4.5 million compared to $4.6 million one quarter ago and $5.2 million one year ago. Seed/Early stage companies received the bulk of first-time investments garnering 59 percent of the dollars and 70 percent of the deals.

MoneyTree Report results are available online at www.pwcmoneytree.com and www.nvca.org .

Note to the Editor

Information included in this release or related venture capital investment data should be cited in the following way: "The MoneyTree(TM) Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters" or "PwC/NVCA MoneyTree(TM) Report based on data from Thomson Reuters." After the first reference, subsequent references may refer to PwC/NVCA MoneyTree Report, PwC/NVCA or MoneyTree Report. Charts and tables displaying the data are sourced to "PricewaterhouseCoopers/National Venture Capital Association MoneyTree(TM) Report, Data: Thomson Reuters." After the first reference, subsequent references may refer to PwC/NVCA MoneyTree Report, PwC/NVCA, MoneyTree Report or MoneyTree.

About the PricewaterhouseCoopers/National Venture Capital Association MoneyTree(TM) Report

The MoneyTree(TM) Report measures cash-for-equity investments by the professional venture capital community in private emerging companies in the U.S. It is based on data provided by Thomson Reuters. The survey includes the investment activity of professional venture capital firms with or without a US office, SBICs, venture arms of corporations, institutions, investment banks and similar entities whose primary activity is financial investing. Where there are other participants such as angels, corporations, and governments in a qualified and verified financing round the entire amount of the round is included. Qualifying transactions include cash investments by these entities either directly or by participation in various forms of private placement. All recipient companies are private, and may have been newly-created or spun-out of existing companies.