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![Tech. Angel Funding Is More Difficult To
Decipher
• UNH Angel report estimates 2013 angel
funding grew 5% to $24B for ~70,000
companies funded
– However many companies are not tech.
– Average deal size of $342,000
• TechCrunch estimates Just $700M was
invested in technology angel deals [which
feels low – Ed.]
• Silicon Valley • Honolulu
Page
20
Source: UNH Angel Report, TechCrunch, NVCA](https://image.slidesharecdn.com/startupcapvcmarket2014-140424200700-phpapp02/75/Venture-Capital-Angel-Investing-Market-2014-20-2048.jpg)
Uploaded byTim Dick
Venture Capital & Angel Investing Market 2014
The 2014 U.S. venture capital (VC) landscape indicates a rebound in fundraising and investment activity, with $29 billion invested, primarily in software and biotech sectors. While earlier stage investments have declined, expansion stage financing is increasing, reflecting shifts in investor focus. The exit market is strong, with high levels of IPOs and M&A activity, leading to robust returns for limited partners.
Venture Capital & Angel Investing Market 2014
- 1. US VC &Angel Investing Climate 2014
- 2. What’s Going OnIn The US VC Cycle? Page 2 VCs Invest In Startups Startups Exit Via M&A or IPO VCs return capital to LPs LPs Invest In VCs • Silicon Valley • Honolulu
- 3. An Outstanding MarketFor Entrepreneurs & VCs • US VC fundraising returning to strength in 2014 on back of strong exit markets • Highest level of VC investment since 2003 • Highest levels of IPO activity since 2003 • Investment shifted from seed to later stages • California & software sector taking growing share of VC $ and deals • Angel investors concentrating on different sectors than VC, presenting challenges to entrepreneurs • Silicon Valley • Honolulu Page 3
- 4. Agenda • LP InvestmentsIn VC • VC Investing Activity • Angel, Accelerator & Crowdfunding • Exit Activity • Conclusions • Silicon Valley • Honolulu Page 4
- 5. VC Moneys RaisedDeclined In 2013 But Up Well In Q1 2014 Page 5 • Silicon Valley • Honolulu Source: Thomson Reuters / PwC / NVCA
- 6. Number Of FundsRaised Increased Slightly • Silicon Valley • Honolulu " Page 6" Source: Thomson Reuters / PwC / NVCA
- 7. Growing % ofNew Vs. Follow-On Funds So Far In 2014 • Silicon Valley • Honolulu " Page 7" Source: Thomson Reuters / PwC / NVCA
- 8. Agenda • Silicon Valley •Honolulu Page 8 • LP Investments In VC • VC Investing Activity • Angel, Accelerator & Crowdfunding • Exit Activity • Conclusions
- 9. $29B Of VentureCapital Invested In 2013 Is At Post .com High • Silicon Valley • Honolulu " Page 9" Source: Thomson Reuters / PwC / NVCA
- 10. VC Dollars ConcentratingIn Software, Biotech. & Media / Entertain • Silicon Valley • Honolulu " Page 10" Source: Thomson Reuters / PwC / NVCA
- 11. Number Of DealsAlso Concentrating In Software • Silicon Valley • Honolulu " Page 11" Source: Thomson Reuters / PwC / NVCA
- 12. California Makes UpOver 50% of US VC $ • Silicon Valley • Honolulu " Page 12" Source: Thomson Reuters / PwC / NVCA LA / Orange County
- 13. 2013 Saw MoreExpansion Rounds While Seed Stage Rounds Continued To Fall • Silicon Valley • Honolulu " Page 13" Source: Thomson Reuters / PwC / NVCA
- 14. Q1 Seed DealSize Fell After a “Big” 2013 While Later Round Sizes Grew • Silicon Valley • Honolulu " Page 14" Source: Thomson Reuters / PwC / NVCA
- 15. 71% Of NewVenture Financings Were Up-Rounds… • Silicon Valley • Honolulu Source: Fenwick " Page 15"
- 16. …But Less Than40% of Series-C Or Later Deals Were Up-Rounds • Silicon Valley • Honolulu " Page 16" Source: Fenwick
- 17. Media And SoftwareHave Greatest % Of Uprounds (i.e. lower risk) • Silicon Valley • Honolulu " Page 17" Source: Fenwick
- 18. Venture Investment EnvironmentIs Evolving • “Seed and early stage financing numbers are down, but expansion stage dollars invested are up. This was to be expected when you consider the domination by seed and early stage deals in 2012 and 2013” - Bobby Franklin, CEO NVCA • “Investments into the Software sector continue to remain healthy as investors look for companies with disruptive technology.” - Mark McCaffery, PwC • Silicon Valley • Honolulu Page 18
- 19. Agenda • Silicon Valley •Honolulu Page 19 • LP Investments In VC • VC Investing Activity • Angel, Accelerator & Crowdfunding • Exit Activity • Conclusions
- 20. Tech. Angel FundingIs More Difficult To Decipher • UNH Angel report estimates 2013 angel funding grew 5% to $24B for ~70,000 companies funded – However many companies are not tech. – Average deal size of $342,000 • TechCrunch estimates Just $700M was invested in technology angel deals [which feels low – Ed.] • Silicon Valley • Honolulu Page 20 Source: UNH Angel Report, TechCrunch, NVCA
- 21. Average Tech. AngelRound Size Remains Flat • Silicon Valley • Honolulu " Page 21" Source: SVB / Angel Resource Institute
- 22. Adding Co-investors ToAngels Substantially Increases Round Size • Silicon Valley • Honolulu " Page 22" Source: SVB / Angel Resource Institute $ M
- 23. Healthcare Draws LargestAngel / Coinvestor Rounds (But Is Most Capital-Intensive) • Silicon Valley • Honolulu " Page 23" Source: SVB / Angel Resource Institute $ M
- 24. Angel Investing MixDifferent From Venture Funding: Software Just 4% • Silicon Valley • Honolulu " Page 24" Source: SVB / Angel Resource Institute
- 25. Angel Funding IsBalanced Vs Population • Silicon Valley • Honolulu " Page 25" Source: SVB / Angel Resource Institute
- 26. Accelerators Funded Over1,000 Companies In 2013 • Silicon Valley • Honolulu " Page 26" High risk: just 36% of portfolio companies received additional funding within 3 years
- 27. Crowdfunding Industry ReportedFew Numbers for 2013… Deloitte estimates over $700M was raised from product crowdfunding in 2013 (e.g. Kickstarter) SEC has still not finalized equity crowdfunding rules Last industry numbers from 2012 • $2.8B worldwide according to Massolution • $300M equity worldwide (crowdfunding.org) • Silicon Valley • Honolulu Page 27
- 28. Agenda • LP InvestmentsIn VC • VC Investing Activity • Angel, Accelerator & Crowdfunding • Exit Activity • Conclusions • Silicon Valley • Honolulu Page 28
- 29. " Page 29" VC-Backed ExitMarket Is Strong With IPOs At Highest Level Since 2007 • Silicon Valley • Honolulu Source: Thomson Reuters / PwC / NVCA
- 30. VC-backed IPO andM&A Valuations Remain Robust • Silicon Valley • Honolulu " Page 30" Facebook, Groupon, Twitter, Zynga Source: Thomson Reuters / PwC / NVCA
- 31. 18% Of VCM&A Produces 10X Returns While 22% Produces < 1X * • Silicon Valley • Honolulu " Page 31" Source: Thomson Reuters / PwC / NVCA * Excludes unvalued deals (70% of total)
- 32. • VC Returns Continueto Outperform • Public MarketsVC Returns Typically Exceed Public Markets Over Long Term Source: NVCA, Cambridge Associates • Silicon Valley • Honolulu Page 32
- 33. Agenda • LP InvestmentsIn VC • VC Investing Activity • Angel, Accelerator & Crowdfunding • Exit Activity • Conclusions • Silicon Valley • Honolulu Page 33
- 34. VCs Invested $29B In Portfolio $134BIn Venture Exit Liquidity (IPO + M&A) LPs Invested $16B In VCs Despite Strong Returns VC Is Not Receiving Enough Capital To Sustain Today’s Venture Market Page 34 Sources: NVCA, Thomson Reuters, Cambridge • Silicon Valley • Honolulu
- 35. Market Equilibrium WillReturn (One Way Or Another) • Good exit markets create strong returns for LPs • VCs continue to fund new deals at high levels • LP funding declining and lagging VC investment Page 35 Venture capital shrinks to match LP investment in VC VC funding grows as LPs increase VC funding • Silicon Valley • Honolulu
- 36. Page 36 Author: TimDick • General Partner, Startup Capital Ventures – Boards: SilverTail (acquired by EMC), TuneIn, Adama Materials, TagArray • Entrepreneur, angel and advisor has raised over $300M in early stage capital with over $1.2B of exits – Match.Com (Angel, acquired by IAC) – WorldPages.com (Founder, CEO, IPO NYSE:WPZ acquired by BT) – TRUSTe.org / Privacy Assured (Internet privacy standard) – Accept.com (mentor capitalist, acquired by Amazon) – Grassroots Enterprise (Founding President, acquired by Edelman) – Hawaii Superferry (founding CEO) – Dali Wireless (turnaround CEO) • Boston Consulting Group • Beckman Instruments: invented first “instrument on a chip” (1985) & first ICU usable speech synthesizer for intubated patients (1981) • MBA, Stanford University • BSEE, University of California
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