CB - Q3 2012 Venture Capital Activity Report (CB Insights)

Venture Capital Activity Report | Q3 2012
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QUARTER SUMMARY 2
QUARTERLY TRENDS 3
SECTOR REVIEW 12
1 INTERNET 12
2 MOBILE & TELECOM 19
3 HEALTHCARE 26
4 GREEN / CLEAN TECH 33
GEOGRAPHIC REVIEW
1 CALIFORNIA 40
2 MASSACHUSETTS 47
3 NEW YORK 52
4 WASHINGTON 58
5 TEXAS 63

DEFINITIONS & DATA INTEGRITY 68

TABLE OF CONTENTS
2010, CB Insights. All rights reserved. For more information about CB Insights, please email info@cbinsights.com.
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Q3 2012 This Quarter in Venture Capital
Deal strength continues as Q3'12 registers most deals since dot com boom. Funding
remains strong but down vs. Q2'12's big quarter. Overall, 2012 looks like it will be a
down year for VC funding relative to 2011 barring a freakish 4
th
quarter tally.
2
VCs remained ready, willing and able to invest in Q3 2012 making 835 investments totaling $7.5 billion. The deal count was
the highest since the dot com days largely driven by what seems to be an insatiable VC appetite for making small seed
investments in fledgling companies. The funding tally was also strong at $7.5 billion but down relative to Q3'11 when it
registered $7.9 billion. It was also down versus the gargantuan $8.1 billion witnessed in the prior quarter.

Of course, when one reads the words "dot com in the same sentence as VC, the bubble chatter begins. We, again, think it
is without merit. Unless Q4'12 registers in at $9.2 billion of VC funding (and we'll bet a healthy sum of money that it won't),
2012 will actually be a down year in terms of total VC funding to companies.

Yes, there continues to be frothiness in the Seed VC investing area as Q3'12 saw yet another uptick in already-high Seed
VC deal volumes. And yes, the size of Seed VC deals is growing, following suit with volumes. So the reality is that there will
eventually be blood among these Seed VC companies as many will be orphaned or just unable to raise follow-on financing.
The proverbial "blood, however, in this case will not be that of VCs. Seed VC is a low risk call option for most VCs. f all
Seed VC deals failed, it would be the equivalent of a single medium-sized VC fund going out of business. That happens all
the time and presents no risk to the entire VC ecosystem. If it becomes easy for companies with little or no traction to raise
big Series C and D rounds, then we'll more openly entertain talk of a VC bubble.

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. 68 to see what is included/excluded as there is a great amount of misinformation out there.
Bigger, Faster Seed Planting

Seed investing represented 31% of all VC deals. Mobile
saw 42% of its deal volume at the Seed VC level.
Healthcare also saw growth in Seed investing as well.

Both internet and mobile saw larger Seed VC medians
hitting the $1 million mark for the first time suggesting that
the frenzy for Seed VC investing is allowing entrepreneurs
to raise larger seed rounds than in the past.

The Mobile Wild West

VCs clearly are positioning themselves for the next big
wave they see in mobile. While big deals in security and
payments buoyed funding totals, the deal breakdown by
industry within mobile remains diverse. For the first time,
Cali actually saw more activity to the mobile sector than
Healthcare.

Green Tech Fizzes; Reveals Unusual Suspects

The clean tech doldrums continued with both deals and
funding hitting five quarter lows. Interestingly, NY and
Illinois took #2 spots for green tech deal and funding
activity, respectively.

Healthcare Deals Dip; Funding Stabilizes

Third straight quarter where healthcare deals decline.
Funding climbs a bit over Q2'12 but down 7% vs. Q3'11.

Southern California Can I Get a Little Respect?

We broke out some stats on Silicon Valley vs. SoCal (p
46) after some of our customers in the area told us SoCal
was the Rodney Dangerfield of VC markets. And there
was something to their claims. Based on VC funding,
SoCal was actually the 3
rd
biggest market ahead of NY
and just behind Silicon Valley and Massachusetts.

NY Does it Smaller; Maybe Not a One-Trick Pony

New York deal count hit five quarter high but is dominated
by lots of small Seed VC deals (49% of deals). Although
still very tech dominant, the quarter did see NY register
signs of life in both green tech and healthcare which
typically are nowhere to be found.

Mass Bucks National Trend Deals and Dollars Up

Massachusetts, which fell on both deals and dollars last
quarter, increased on both this go around. The market
saw strength in mobile as well as a modest comeback in
the healthcare sector.

Washington and Texas Both Fall Down

After a couple of strong quarters, Washington fails to
keep its momentum slipping on both deals and dollars.
Texas continues its recent descent with deals and funding
both being weak.
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$7.5B in 835 Deals Deal Volume Continues to Climb
Q3 2012 sees deal volume continue to climb although overall funding drops from the
previous quarter. Funding levels down 6% year over year.
3
$5.4
$6.5
$7.5
$7.7
$7.9
$7.6
$5.9
$8.1
$7.5
715
735
749
781
790
755
785
812
835
Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Quarterly VC Investment and Deal Volume Trend
Q3 '10 to Q3 '12
Investment ($M) Deals
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4
Top 3 for Deal Volume Remains Unchanged: Cali, NY, Mass
California takes 45% of deal volume for the second straight quarter, followed by New
York and Massachusetts which both see a slight uptick in deal share.
40% 40% 40%
45% 45%
11%
12%
10%
9% 10%
11%
10%
11%
10%
11%
4%
3%
5%
3% 3%
4% 3% 4%
4%
3%
31% 31% 31%
28%
29%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Venture Capital by State - Number of Deals
Five Quarter Trend
California Massachusetts New York Texas Washington Other
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5
Cali Creeps Back to Earth; Still Unchallenged for Top Spot
California loses some share of funding to the field, but still takes over half of overall VC
dollars. Massachusetts and New York each slightly grow their share in Q3 2012.
48%
52%
49%
58%
53%
9%
13%
11%
10%
11%
10%
8%
6%
6%
7%
4%
6%
6%
2%
2%
2%
2%
4%
4%
2%
26%
19%
25%
20%
26%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Venture Capital by State - Dollars of Funding
Five Quarter Trend
California Massachusetts New York Texas Washington Other
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6
41 States (including DC) Register a VC Deal in Q3 2012
Cali, Mass, New York, Pennsylvania and Virginia comprise the top five states for
funding in Q3 2012, while Cali, New York, Mass, Pennsylvania and Colorado are atop
the leader board for deal volume.
Rank State Investment ($M) # of Deals
1 California 3,879.80 366
2 Massachusetts 847.24 84
3 New York 488.92 86
4 Pennsylvania 218.89 30
5 Virginia 195.67 12
6 Illinois 153.77 17
7 Michigan 141.27 9
8 Colorado 135.63 27
9 Washington 132.49 24
10 New Jersey 128.44 10
11 Texas 125.96 21
12 Maryland 104.23 5
13 Georgia 101.67 16
14 Utah 93.35 13
15 Ohio 74.20 7
16 Minnesota 67.66 6
17 Rhode Island 59.52 8
18 Florida 56.56 7
19 Oregon 49.02 6
20 Tennessee 46.04 9
21 North Carolina 45.91 9
22 Wisconsin 38.63 3
23 Arizona 34.25 3
24 Indiana 30.87 3
25 Alabama 29.45 3
Rank State Investment ($M) # of Deals
26 Connecticut 25.58 10
27 New Hampshire 24.37 5
28 Kansas 23.60 4
29 Oklahoma 23.00 2
30 Kentucky 18.41 4
31 DC 15.54 7
32 Louisiana 10.43 4
33 Vermont 8.00 1
34 Missouri 5.86 3
35 New Mexico 5.30 2
36 Maine 5.00 1
37 Nevada 4.70 1
38 Delaware 3.62 3
39 Nebraska 1.70 2
40 Idaho - 1
41 Mississippi - 1
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July Sees Biggest Month for VC Since the Dot Com Days
Q3 2012 starts where Q2 left off, registering $3.1B in VC investment across a
stratospheric 302 deals. Thereafter, however, things cool off with a considerable drop-
off in August followed by a strong September.
8
$2.5
$2.7
$2.7
$2.6 $2.6
$2.4
$2.2
$1.7
$2.0
$2.6
$2.7
$2.8
$3.1
$1.9
$2.4
267
263
260
258
233
264
292
245
248
231
292
289
302
254
279
Monthly VC Investment and Deal Volume Trend
July 2011 to September 2012
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Seed Explodes, Driving Growth in Overall Early Stage
Seed VC continues to surge, commanding 31% of overall deal volume. Seed and
Series A combine for 55% of overall deal share.
9
15% 14%
19%
22%
31%
29%
35%
29%
28%
24%
25%
20%
21%
18%
17%
15% 13% 15%
13%
14%
9%
9%
9%
9%
7%
7%
8% 7%
9%
7%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Venture Capital by Series - Number of Deals
Five Quarter Trend
Seed Series A Series B Series C Series D Series E +
www.cbinsights.com
1% 1% 2% 2%
3%
13%
21%
18% 17%
20%
26%
25%
20%
17%
21%
21%
20%
23%
23%
21%
16%
15%
18%
22%
16%
22%
19% 20% 19% 18%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Venture Capital by Series - Dollars of Funding
Five Quarter Trend
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Mobile Continues to Grow Share of Deals and Dollars
VCs continue their push into mobile which shows continued signs of strength. For 3
rd

straight quarter, healthcare deals are down. Internet remains steady atop the board.
10
39%
37%
42%
46% 45%
18%
23%
19%
17%
16%
13%
12% 12%
13%
14%
4%
3%
3%
3%
4% 7%
5% 3%
6% 6% 3% 3%
4%
2% 2%
17% 16% 17%
13% 13%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Venture Capital by Sector - Number of Deals
Five Quarter Trend
Internet Healthcare
Mobile & Telecommunications Computer Hardware & Services
Software (non-internet/mobile) Industrial
Other
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38%
33%
35%
38%
36%
21%
25%
24%
19%
21%
7% 10% 7%
8%
13%
3%
3% 5%
4%
7%
6%
5% 3%
3%
4%
2%
2% 4%
4%
4%
23% 22% 22%
24%
15%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Venture Capital by Sector - Dollars of Funding
Five Quarter Trend
Internet Healthcare
Mobile & Telecommunications Computer Hardware & Services
Software (non-internet/mobile) Industrial
Other
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INTERNET
Q3 2012 Venture Capital
12
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Internet Funding Drops, but Deal Volume Remains Steady
Early stage deal activity ensures another strong quarter for Internet deal volume. Q3
sees one more deal than Q2, while up 21% versus Q3 2011. Funding to internet
companies, however, fall 11% versus the same quarter a year ago.
13
I
n
t
e
r
n
e
t

$2,989
$2,514
$2,067
$3,107
$2,672
308
283
326
371 372
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Internet VC Investment and Deal Volume Trend
$ Funding # of Deals
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Last Five Quarters
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14
Quarter Highlights

372 deals | $2,672M

Top Deals

Top Cities

Cali, New York and Mass Atop Internet Sector
The holy trinity of California, New York and Massachusetts continue to sit atop the
Internet sector in terms of both deals and dollars. Cali snags seven of top ten deals in
Internet, leaving two for NY and one for Mass.
I
n
t
e
r
n
e
t

San Francisco, CA
69 deals | $843M
New York, NY
52 deals | $352M
Los Altos, DC
1 deals | $125M
Waltham, MA
5 deals | $117M
El Segundo, CA
1 deals | $76M
Palo Alto, CA
13 deals | $75M
San Mateo, CA
9 deals | $73M
Los Angeles, CA
8 deals | $70M
Boston, MA
11 deals | $67M
Sunnyvale, CA
6 deals | $55M
Box
AirBnB
Fab.com
GitHub
Social Finance
47%
16%
9%
6%
4%
3%
2%
1%
1%
14%
VC Deal Volume (#) in Internet by State, Q3 2012
California
New York
Massachusetts
Utah
Pennsylvania
Illinois
Virginia
Colorado
Texas
Oregon
All Other
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62%
14%
10%
2%
1%
1%
1%
1%
1%
1%
6%
VC Investment ($) in Internet by State, Q3 2012
California
New York
Massachusetts
Utah
Pennsylvania
Illinois
Virginia
Colorado
Texas
Oregon
All Other
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15
Cali Sees Five-Quarter High for Share of Internet Dollars
California snags over 60% of overall investment into the Internet sector marking a five-
quarter high for the Golden State. Mass sees an uptick in % of Internet investment
dollars, but NY still commands the #2 spot by a sizable margin.
I
n
t
e
r
n
e
t

52% 51%
55%
51%
62%
3%
6%
5%
7%
10%
20% 15% 9% 13%
14%
3%
2%
5%
6%
2%
7%
4%
1%
1%
21% 20%
22% 22%
13%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Internet VC by State - Dollars of Funding
California Massachusetts New York Washington Texas Other
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Last Five Quarters
39%
44% 44%
48% 47%
8%
7%
6%
8% 9%
20%
15%
17%
16%
16%
4%
3% 4%
5%
2% 3%
2%
3%
2%
25%
28%
27%
21%
25%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Internet VC by State - Number of Deals
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Last Five Quarters
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16
Seed Outpaces Series A Nearly Two to One
Seed VC continues its ascent, commanding an eye-popping 42% of Internet deal
volume in Q3 2012. In fact, Seed almost doubles Series A, which is the next largest
deal segment highlighting the early stage zeitgeist within the internet sector.
I
n
t
e
r
n
e
t

19% 19%
24%
31%
42%
33%
35%
34%
30%
22%
25% 21%
17%
16%
18%
12%
11%
13% 10%
11%
7%
9%
7%
7%
3%
4%
5% 5%
6%
4%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Internet VC by Series - Number of Deals
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Last Five Quarters
2% 2% 3% 3%
5%
15%
17%
23% 23% 19%
30%
30%
19%
17%
31%
18%
16%
20%
22%
20%
12%
15%
20%
17%
9%
23%
20%
15%
18%
15%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Internet VC by Series - Dollars of Funding
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Last Five Quarters
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17
Advertising Tops Deals, Data Storage Tops $
Data storage sees a strong quarter for funding thanks to Box's $125M late stage
megadeal. In general, the industries within the Internet sector seeing investment
remain diverse.
I
n
t
e
r
n
e
t

8%
7%
7%
7%
6%
6%
5%
4% 4%
4%
4%
3%
3%
3%
3%
26%
VC Investment ($) in Internet by Sub-Industry, Q3 2012
Data Storage
Advertising, Sales & Marketing
Apparel & Accessories
Collaboration & Project Management
Marketplace
Video
Travel (internet)
Bus. Intelligence, Analytics & Performance Mgmt
Discount
Education & Training
Data & Document Management
Customer Relationship Management
Monitoring & Security
Advertising Network or Exchange
Application & Data Integration
Other
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3%
10%
4%
3%
4%
7%
1%
7%
1%
4%
4%
3%
2%
3%
3%
41%
VC Deal Volume (#) in Internet by Sub-Industry, Q3 2012
Data Storage
Apparel & Accessories
Collaboration & Project Management
Marketplace
Video
Travel (internet)
Discount
Data & Document Management
Monitoring & Security
Application & Data Integration
Other
www.cbinsights.com
www.cbinsights.com
18
I
n
t
e
r
n
e
t

Seed Deal Median Climbs Above $1M
In addition to a surge in overall volume, Seed sees an uptick in median deal value
toping $1M for the first time in five quarters.
$1.1
$7.0
$8.0
$11.3
$12.7
$16.0
Internet Median Deal Size by Quarter
($ Million)
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
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MOBILE & TELECOM
19
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Mobile Up Big, Reaches Five-Quarter High for Deals and $
Mobile VC investment up 75% versus Q3 2011 and 45% since last quarter.
Meanwhile, deal volume continues its steady climb hitting a five-quarter high hitting
116 deals in Q3.
20
M
o
b
i
l
e

$553
$756
$435
$669
$968
100
92 93
102
116
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Mobile & Telecom VC Investment and Deal Volume
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Last Five Quarters
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21
Quarter Highlights

116 deals | $968M

Top Deals

Top Cities

Cali # 1 for Mobile; Virginia #2 in Terms of Investment
Unsurprisingly, California takes the top spot for Mobile in terms of deals and dollars.
NY and Mass are #2 and #3 for mobile deals. Virginia takes the #2 spot for Mobile
funding in Q3 on the back of a late stage megadeal to Alarm.com.
M
o
b
i
l
e

San Francisco, CA
23 deals | $320M
Vienna, VA
2 deals | $137M
Sunnyvale, DC
3 deals | $62M
Palo Alto, CA
6 deals | $48M
Cambridge, MA
4 deals | $47M
Mountain View, CA
4 deals | $30M
Marina del Rey, CA
1 deals | $29M
Los Altos, CA
3 deals | $27M
Seattle, WA
3 deals | $27M
Bethesda, MD
1 deals | $26M
Square
Alarm.com
Meraki
Magnet Systems
TeleSign 53%
4%
9%
6%
1%
11%
3%
2%
1%
12%
VC Deal Volume (#) in Mobile by State, Q3 2012
California
Virginia
Massachusetts
Washington
Maryland
New York
Tennessee
Texas
Pennsylvania
Florida
All Other
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63%
15%
8%
3%
3%
2%
2%
1% 1%
1%
1%
VC Investment ($) in Mobile by State, Q3 2012
California
Virginia
Massachusetts
Washington
Maryland
New York
Tennessee
Texas
Pennsylvania
Florida
All Other
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22
NY #2 for Mobile Deals, Mass #2 for Mobile Dollars
As the Mobile sector grows, Cali has established itself as the clear #1. Mass and NY
are duking it out for the #2 spot.
M
o
b
i
l
e

73%
40%
59%
64% 63%
2%
4%
9%
10%
8%
6%
5%
9%
3%
2%
3%
2%
8%
2%
3%
1%
34%
3%
1%
1%
15% 15%
11%
20%
22%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Mobile & Telecom VC by State - Dollars of Funding
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Last Five Quarters
56%
49%
51%
44%
53%
4%
9% 6%
7%
9%
6%
14%
12%
12%
11% 4%
4%
6%
3%
3%
3%
8%
4%
3%
3%
27%
16%
20%
31%
21%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Mobile & Telecom VC by State - Number of Deals
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
23
Early Stage Reigns in the Mobile Sector
Mobile follows suit with its big cousin, Internet, becoming a big time destination for
seed funding. Overall early stage commands two-thirds of overall early stage volume.
M
o
b
i
l
e

30%
24%
33% 34%
42%
33%
44%
33% 33%
25%
15%
14%
14%
11%
18%
8%
9%
10%
14%
7%
11%
1% 4% 3%
4%
3%
7%
5% 6%
4%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Mobile & Telecom VC by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
4% 4%
6% 5% 4%
23%
30%
30%
22%
17%
19%
28%
18%
27%
20%
14%
16%
14%
29%
9%
31%
1%
14%
3%
28%
8%
22%
19%
13%
22%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Mobile & Telecom VC by Series - Funding Dollars
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Last Five Quarters
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24
Payments and Security Command Top Spots for Funding
Late stage megadeals lift Payments and Security to the #1 and #2 spots, respectively, in
Q3 2012. Overall, the field remains diverse as Mobile continues to be a relatively
immature and emerging sector.
M
o
b
i
l
e

26%
16%
10%
7%
5%
5%
5%
4%
3%
3%
2% 2%
2%
2%
1%
7%
VC Investment ($) in Mobile by Sub-Industry, Q3 2012
Payments
Security
Wireless
Application Development
Gaming
Wireless Telecom Equipment
Healthcare
Mobile Commerce enablement
Location-Based & Navigation
Search
All Other
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6%
4%
6%
5%
2%
10%
10%
4%
3%
4%
5%
3%
5%
2%
1%
33%
VC Deal Volume (#) in Mobile by Sub-Industry, Q3 2012
Payments
Security
Wireless
Application Development
Gaming
Wireless Telecom Equipment
Healthcare
Mobile Commerce enablement
Location-Based & Navigation
Search
All Other
www.cbinsights.com
www.cbinsights.com
25
Early Stage Median Deal Size Reaches $1M
Seed stage deals reach a median of $1M for first time akin to Internet seed deals.
Median deal sizes in Mobile generally rise across all stages. Late stage medians soar.
M
o
b
i
l
e

$1.0
$5.0
$10.0
$13.1
$24.5
$25.5
Mobile and Telecom Median Deal Size by Quarter
($ Million)
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
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HEALTHCARE
26
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Healthcare Deal Volume Down for Third Straight Quarter
Healthcare continues to weaken in terms of deal volume, while investment sees a
slight uptick from Q2. Funding levels, however, are down 7% from the same quarter a
year ago.
27
H
e
a
l
t
h
c
a
r
e

$1,677
$1,895
$1,449
$1,534
$1,560
143
172
153
142
134
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Healthcare VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
28
Cali and Mass Continue Healthcare Dominance
California and Massachusetts combine for over 50% of deal share and 43% of funding
dollars. Pennsylvania leads a diverse field of runner-ups in terms of investment dollars.
Quarter Highlights

134 deals | $1,560M

Top Deals

Top Cities

H
e
a
l
t
h
c
a
r
e

Cambridge, MA
11 deals | $199M
San Diego, CA
9 deals | $106M
Santa Clara, DC
3 deals | $87M
Waltham, MA
2 deals | $61M
Palo Alto, CA
1 deals | $58M
East Providence, RI
3 deals | $56M
New York, NY
5 deals | $53M
Princeton, NJ
2 deals | $44M
Newton Center, MA
1 deals | $39M
San Francisco, CA
1 deals | $38M

Relypsa
Bluebird Bio
CardioDx
Histogenics
Foundation Medicine
31%
22%
6%
5%
5%
4%
4%
3%
3%
2%
15%
VC Investment ($) in Healthcare by State, Q3 2012
California
Massachusetts
Pennsylvania
New Jersey
Ohio
Minnesota
Rhode Island
New York
Colorado
Texas
All Other
www.cbinsights.com
28%
15%
5%
6% 3%
2%
4%
7%
2%
29%
VC Deal Volume (#) in Healthcare by State, Q3 2012
California
Massachusetts
Pennsylvania
New Jersey
Ohio
Minnesota
Rhode Island
New York
Colorado
Texas
All Other
www.cbinsights.com
www.cbinsights.com
29
Massachusetts Recovers, Cali Slips in Healthcare
After a weak Q2 for Healthcare VC investment, Massachusetts recovers to climb
above 20% of overall funding. Meanwhile, California retains top spot for deals and
dollars but loses ground to a diverse field.
H
e
a
l
t
h
c
a
r
e

29% 28% 27%
37%
28%
24%
22%
19%
13%
15%
3%
3%
3%
3%
4%
4%
4%
3%
5%
4%
5%
4%
6%
3%
2%
35%
39%
41% 40%
46%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Healthcare VC by State - Number of Deals
www.cbinsights.com
Last Five Quarters
39%
41%
38%
45%
31%
22%
26%
23%
15%
22%
4%
5%
1%
1%
3%
2%
3%
2%
7%
3%
2%
7%
2%
3%
30%
24%
29% 30%
39%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Healthcare VC by State - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
30
Strong Quarter for Healthcare Seed Deals
Seed deals command over 14% of overall deal volume, which represents a five-
quarter high. Overall early stage investment concentration remains steady with Q2.
H
e
a
l
t
h
c
a
r
e

11%
7%
14%
10%
14%
23%
34%
27%
29%
25%
27%
19%
25%
19%
21%
18%
17%
14%
16%
20%
12% 15% 11%
16%
13%
9%
7%
9% 10%
7%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Healthcare VC by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
1% 0% 1% 1% 1%
10%
30%
16% 18%
25%
28%
19%
21% 20%
17%
34%
23%
26%
21%
25%
18%
22%
16% 25%
19%
10%
7%
20%
16%
13%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Healthcare VC by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
31
Medical Devices are Most Active Area Within Healthcare
Medical Devices command over one-third of Healthcare deals and dollars. Pharma,
Drug Development and Biotech are all runners up.
H
e
a
l
t
h
c
a
r
e

36%
13%
13%
17%
3%
2%
5%
3%
3%
2%
1%1%
1%
VC Deal Volume (#) in Healthcare by Sub-Industry, Q3 2012
Medical Devices & Equipment
Pharmaceuticals / Drugs
Drug Development
Biotechnology
Drug Discovery
Drug Delivery
Medical Facilities & Services
Stealth Mode
Disease Diagnosis
Medical Equipment & Supplies
Pharmaceutical Distribution & Wholesale
Healthcare Plans
Dental Products & Services
www.cbinsights.com
37%
17%
15%
13%
7%
4%
3%
2%
1% 1%
VC Investment ($) in Healthcare by Sub-Industry, Q3 2012
Medical Devices & Equipment
Pharmaceuticals / Drugs
Drug Development
Biotechnology
Drug Discovery
Drug Delivery
Medical Facilities & Services
Stealth Mode
Disease Diagnosis
Medical Equipment & Supplies
Pharmaceutical Distribution & Wholesale
Healthcare Plans
Dental Products & Services
www.cbinsights.com
www.cbinsights.com
32
Healthcare Deal Size Down Across the Board in Q3
Median deal size of all funding stages drops in Q3, creeping back from Q2 where
numbers were up across the board.
H
e
a
l
t
h
c
a
r
e

$1.0
$4.1
$7.3
$11.3
$14.6
$20.8
Healthcare Median Deal Size by Quarter
($ Million)
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
www.cbinsights.com
www.cbinsights.com
GREEN & CLEAN TECH
33
www.cbinsights.com
Green Tech Not Seeing Much Green These Days
The Green Tech funding spike witnessed in Q2 proves unsustainable as Q3 sees a
five-quarter low for the struggling sector in terms of both deals and dollars.
34
G
r
e
e
n

$1,220
$1,281
$764
$1,471
$698
70
69
56
49
47
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Green VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
35
California #1; Illinois and NY are Surprise Runners Up
California dominates Green Tech, while New York and Illinois surprise to take #2 spots
in terms of deals and dollars, respectively.
Quarter Highlights

47 deals | $698M

Top Deals

Top Cities

G
r
e
e
n

Woodridge, IL
1 deals | $104M
Anaheim, CA
1 deals | $104M
San Diego, DC
2 deals | $52M
Milpitas, CA
3 deals | $46M
Wilmington, MA
1 deals | $40M
Palo Alto, CA
1 deals | $38M
Allen Park, MI
1 deals | $33M
Collins, CO
1 deals | $31M
San Francisco, CA
1 deals | $30M
King OF Prussia, PA
1 deals | $25M
Elevance Renewable Sciences
Fisker Automotive
Genomatica
Lilliputian Systems
NuvoSun
36%
2%
7%
6% 4%
4%
9%
4%
4%
19%
VC Deal Volume (#) in Green by State, Q3 2012
California
Illinois
Massachusetts
Pennsylvania
Colorado
Michigan
Oregon
New York
New Hampshire
Utah
All Other
www.cbinsights.com
43%
15%
8%
6%
6%
5%
3%
3%
3%
2%
6%
VC Investment ($) in Green by State, Q3 2012
California
Illinois
Massachusetts
Pennsylvania
Colorado
Michigan
Oregon
New York
New Hampshire
Utah
All Other
www.cbinsights.com
www.cbinsights.com
36
Cali's Share Down Big as the Field Diversifies
f any good news can be gleaned from Q3 in terms of Green Tech, it's that the field is
wide and isn't completely dependent on California. That said, it seems as Cali goes,
so does the entire sector.
G
r
e
e
n

43%
39%
41%
53%
36%
11%
10%
9%
12%
6%
1%
9%
9%
4%
1%
4%
4%
10%
4%
7%
8%
30%
36%
39%
27%
45%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Green VC by State - Number of Deals
www.cbinsights.com
Last Five Quarters
43%
59%
53%
79%
43%
15%
4%
14%
10%
8%
1%
2%
3%
3%
10%
16%
6%
3%
27%
19%
26%
8%
45%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Green VC by State - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
37
Early Stage Share of Deal Volume Up From Q2
Early stage deal volume commands 37% of overall share. Funding driven by later
stage bets.
G
r
e
e
n

0%
8%
4%
8%
13%
24%
32%
13%
16%
24%
32%
18%
24%
24%
7%
19%
21%
35% 16%
36%
12%
8%
15%
18%
11%
13% 14%
11%
16%
9%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Green VC by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
3%
6%
15%
6%
3%
5%
18%
22%
11%
8%
1%
18%
30%
44%
25%
39%
16%
10%
9%
43%
18%
42%
23%
29%
20%
34%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Green VC by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
38
Renewables Bounce Back in Terms of Deal Volume
Renewables which saw relatively weak deal volume in Q2 bounces back to take 43%
of overall Green Tech deals in Q3. Conversely, Renewables experiences a five-
quarter low for share of investment dollars.
G
r
e
e
n

43%
46%
59%
42%
34%
2%
4%
27%
15%
23%
6%
4%
2%
6% 3%
3%
3%
5% 3%
28%
28%
41%
25%
27%
20%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Green VC by Industry - Dollars of Funding
Renewables Automobile Manufacturing
Energy Storage Energy Efficiency
Basic Materials Other
www.cbinsights.com
Last Five Quarters
36%
32%
34%
29%
43%
1%
5%
2%
2%
10%
4%
5%
6%
9%
12%
14%
4%
6%
4%
6%
7%
8%
11%
41%
45%
34%
51%
38%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of Green VC by Industry - Number of Deals
Renewables Automobile Manufacturing
Energy Storage Energy Efficiency
Basic Materials Other
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
39
G
r
e
e
n

$3.0 $3.0 $3.0
$15.0
$33.0
$59.5
$8.8
Seed Series A Series B Series C Series D Series E + Overall
Green Median Deal Size by Quarter
($ Million)
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
www.cbinsights.com
Overall Median Slightly Down for Green Tech VC
As deal activity to green tech has diminished, so have median deal sizes. Interest in
capital efficient areas of green tech such as green IT or cleanweb have also helped to
bring down medians.
www.cbinsights.com
CALIFORNIA
40
www.cbinsights.com
41
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Cali Remains Steady on Deal Volume
California can't maintain stratospheric funding levels reached in Q2, but investment
dollars remain nearly steady with the same quarter a year ago. Deal volume sees a
slight uptick from Q2, topping out at 366 deals.
42
C
a
l
i
f
o
r
n
i
a

$3,833 $3,836
$2,857
$4,683
$3,880
315
300
309
363
366
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
California VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Internet and Mobile Take Top Spots in Cali
Mobile registers the single largest deal of the quarter, with mobile payments company
Square receiving $200M in funding. Meanwhile, Internet continues to reign supreme in
terms of both deals and dollars.
43
Quarter Highlights

366 deals | $3,880M

Top Sector
# of Deals Internet
$ of Funding Internet

Top Deals

Top Cities

San Francisco
105 deals | $1302M
Palo Alto
27 deals | $279M
Sunnyvale
19 deals | $224M
San Diego
19 deals | $215M
San Jose
14 deals | $178M
Mountain View
22 deals | $173M
Los Altos
4 deals | $152M
Santa Clara
13 deals | $140M
San Mateo
15 deals | $127M
Anaheim
1 deals | $104M

C
a
l
i
f
o
r
n
i
a

Square
Box
AirBnB
Fisker Automotive
GitHub
48%
17%
10%
5%
6%
1%
5%
1%
3%
1%
3%
VC Deal Volume (#) in California by Sector, Q3 2012
Internet
Mobile & Telecommunications
Healthcare
Software (non-internet/mobile)
Electronics
Industrial
Energy & Utilities
Financial
All Other
www.cbinsights.com
43%
16%
13%
9%
5%
3%
3%
3%
2%
1% 2%
VC Investment ($) in California by Sector, Q3 2012
Internet
Healthcare
Electronics
Industrial
Energy & Utilities
Financial
All Other
www.cbinsights.com
www.cbinsights.com
Mobile Supplants Healthcare for First Time in Cali History
For the first time ever, Mobile overtakes Healthcare in terms of both VC deals and
dollars in California. Internet takes largest share of dollars in five quarters.
44
C
a
l
i
f
o
r
n
i
a

38%
41%
46%
49% 48%
13%
16%
14%
14%
10%
6%
6%
5%
3%
2%
18%
15%
15% 12%
17%
9%
4%
3% 5% 6%
16%
17% 17% 16% 16%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in California by Sector - Number of Deals
Internet Healthcare
Energy & Utilities Mobile & Telecommunications
Software (non-internet/mobile) Other
www.cbinsights.com
Last Five Quarters
40%
33%
40%
34%
42%
17%
20%
19%
15%
13%
9% 17%
10%
10%
2%
11%
8% 9%
9%
16%
8%
5% 3%
3%
5%
15%
17%
19%
30%
22%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in California by Sector - Dollars of Funding
Internet Healthcare
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Seed Takes 1 out of Every 3 Deals in California
California follows suit with national trend, experiencing a strong uptick in share of seed
volume in Q3. Seed and Series A combine for a five-quarter high in terms of
concentration of early stage deals.
45
C
a
l
i
f
o
r
n
i
a

13% 13%
17%
24%
33%
29%
32%
30%
27%
22%
22%
20% 17%
15%
17%
16% 14%
15% 12%
12%
11%
10%
13%
11%
8%
9%
11%
8%
11%
7%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in California by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
1% 1% 2% 2% 3%
12%
16%
16%
14%
16%
26%
28%
14%
13%
25%
18%
22%
22%
22%
17%
16%
14%
25%
28%
21%
28%
20% 20% 21%
19%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in California by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
SoCal Bigger than NY Market for VC Funding
Not surprisingly, Silicon Valley commands the lions share of deals and dollars in
California. But SoCal takes 70 deals totaling $695M in Q3, which would place it above
New York as a destination for investment if it were a standalone state.
46
C
a
l
i
f
o
r
n
i
a

80%
84%
77%
72%
82%
20%
16%
23%
28%
18%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in California by Region - Dollars of Funding
Silicon Valley So Cal (LA/SD)
www.cbinsights.com
Last Five Quarters
77% 78%
76% 77%
81%
23% 22%
24% 23%
19%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in California by Region - Number of Deals
Silicon Valley So Cal (LA/SD)
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
MASSACHUSETTS
47
www.cbinsights.com
Massachusetts Continues VC Surge
Massachusetts bucks the national trend, as deals and dollars are both up versus Q2
2012. Year-over-year, deal volume growth is flat, while funding is up 19%.
48
M
a
s
s
a
c
h
u
s
e
t
t
s

$710
$959
$650
$768
$847
83
93
76
75
84
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Massachusetts VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Internet Tops Deal Volume, Healthcare Tops Funding
Internet and Healthcare combine for nearly two-thirds of deal volume and three-
quarters of total investment in Massachusetts in Q3 2012.
49
Quarter Highlights

84 deals | $847M

Top Sector
# of Deals Internet
$ of Funding - Healthcare

Top Deals

Top Cities

Cambridge
27 deals | $301M
Waltham
10 deals | $232M
Boston
18 deals | $92M
Wilmington
1 deals | $40M
Newton Center
1 deals | $39M
Somerville
1 deals | $17M
Bedford
1 deals | $17M
Medford
1 deals | $15M
Wellesley
2 deals | $14M
Concord
2 deals | $11M
M
a
s
s
a
c
h
u
s
e
t
t
s

Bluebird Bio
Care.com
Histogenics
Foundation Medicine
Lilliputian Systems
24%
41%
13%
4%
8%
1%
1%
1%
3%2%2%
VC Deal Volume (#) in Mass by Sector, Q3 2012
Healthcare
Internet
Energy & Utilities
Financial
Agriculture
Food & Beverages
Industrial
All Other
www.cbinsights.com
40%
32%
9%
7%
4%
4% 2%
1% 1%
VC Investment ($) in Mass by Sector, Q3 2012
Healthcare
Internet
Energy & Utilities
Financial
Agriculture
Food & Beverages
Industrial
All Other
www.cbinsights.com
www.cbinsights.com
Mobile Squashes Energy for the #3 Spot in Mass
Following suit with Cali, Mobile sees a strong quarter in Massachusetts. In fact, the
Mobile sector tops Energy in terms of both deals and dollars for the first time in
Massachusetts history.
50
M
a
s
s
a
c
h
u
s
e
t
t
s

30%
23% 24%
39%
40%
41%
40% 38%
24%
24%
6%
6%
3%
7% 4%
5%
9%
8%
9% 13%
5%
10%
11%
7%
8%
13% 13%
17%
15%
11%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Massachusetts by Sector - Number of Deals
Internet Healthcare
www.cbinsights.com
Last Five Quarters
13%
17% 15%
28%
32%
53%
51%
51%
29%
41%
22%
5%
11%
18%
7%
2%
3%
6% 8%
9%
3%
10%
5% 3%
4%
8%
14%
12% 13%
8%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Massachusetts by Sector - Dollars of Funding
Internet Healthcare
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
51
M
a
s
s
a
c
h
u
s
e
t
t
s

Early Stage Comes Back to Earth in Massachusetts
After commanding nearly half of overall dealflow in Q2, early stage investment creeps
back to normal but still strong levels. Seed sees its strongest period in five quarters.
10%
8%
16%
12%
17%
24%
34%
25%
36%
20%
32%
21%
19%
22%
21%
12%
15%
22%
16%
21%
14%
12%
11%
9%
12%
8%
11%
7%
4%
8%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Massachusetts by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
1% 1% 1% 1% 1%
12%
29%
14%
18%
20%
19%
17%
17%
27%
18%
17%
23%
30%
33%
16%
28%
14%
9%
15%
26%
22%
16%
29%
6%
19%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Massachusetts by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
NEW YORK
52
www.cbinsights.com
New York Deal Volume Matches Five-Quarter High
New York experiences another strong quarter for deal volume, while deal activity
remains relatively flat vs. Q2, but funding is down 41% versus the year ago quarter.
53
N
e
w

Y
o
r
k

$831
$568
$336
$500
$489
86
73
81
83
86
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
New York VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
54
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Email

info@cbinsights.com
Telephone

212-292-3148
www.cbinsights.com
Mobile Registers Strong Quarter with15% of Deal Volume
Internet continues to dominate in terms of both deals and dollars in New York. More
interestingly, however, Mobile registers the number two spot for deal volume while
Healthcare registers a large deal lifting it to the two spot for investment.
55
Quarter Highlights

86 deals | $489M

Top Sector
# of Deals Internet
$ of Funding - Internet

Top Deals

Top Cities

New York
75 deals | $445M
Brooklyn
4 deals | $13M
Germantown
1 deals | $12M
Rochester
1 deals | $9M
Lynbrook
1 deals | $3M
Bronx
1 deals | $3M
Ithaca
1 deals | $2M
Pittsford
1 deals | $2M
N
e
w

Y
o
r
k

Fab.com
Quirky
Warby Parker
Intercept Pharmaceuticals
Totsy
76%
11%
4%
3%
3% 1% 1%
1%
VC Investment ($) in New York by Sector, Q3 2012
Internet
Healthcare
Energy & Utilities
Media (Traditional)
Financial
Industrial
Electronics
All Other
www.cbinsights.com
68%
6%
3%
15%
1%
1%
2% 1%
1% 1% 1%
VC Deal Volume (#) in New York by Sector, Q3 2012
Internet
Healthcare
Energy & Utilities
Media (Traditional)
Financial
Industrial
Electronics
All Other
www.cbinsights.com
www.cbinsights.com
Mobile Continues to Steady its Presence in New York
For the fifth time in as many quarters, Mobile takes the #2 spot for deals in New York.
Healthcare surprises in Q3, taking the number two spot for investment dollars.
56
N
e
w

Y
o
r
k

72%
59%
68%
71%
67%
5%
7%
6%
5%
6%
1%
3%
2%
7%
18%
14%
14% 15%
1%
2%
14% 14%
12%
10%
7%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in New York by Sector - Number of Deals
Internet Healthcare
www.cbinsights.com
Last Five Quarters
71%
64%
55%
83%
76%
7%
16%
6%
3%
11%
2%
1%
0%
0%
4%
4%
6%
12%
5%
3%
16%
12%
27%
10%
5%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in New York by Sector - Dollars of Funding
Internet Healthcare
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Seed Commands Nearly Half of Overall Dealflow in NY
Seed commands 49% of overall deal volume in New York, boosting overall early stage
to 76%. Two big time Series C deals combine for over half of NY VC total investment.
57
N
e
w

Y
o
r
k

15%
18%
30%
31%
49%
32%
42%
33%
36%
27%
26%
18%
19%
14%
8% 14%
13% 9% 10%
13%
5%
6%
6% 5%
1%
8%
3% 4% 4%
2%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in New York by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
2% 2%
5%
3%
9%
13%
37%
30%
21%
19%
23%
23%
26%
20%
15%
25%
21%
15%
23%
55%
10%
13%
11%
11%
28%
3%
14%
22%
2%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in New York by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
WASHINGTON
58
www.cbinsights.com
After Strong Q2, Washington Falls Off a Cliff
Optimism grew in Washington after two straight strong quarters, but Q3 sees a
precipitous drop in deals and funding vs. Q2 2012 as well as vs. a year ago quarter.
Funding and deal volume hit or match five-quarter lows.
59
W
a
s
h
i
n
g
t
o
n

$197
$146
$206
$312
$132
28
24
28
32
24
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Washington VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Mobile is Tops for Investment, while Internet #1 for Deals
The Mobile and Telecommunications surge happens in Washington as the sector
commands 25% of overall VC dollars. Internet and Healthcare lead the pack in terms of
deal volume.
60
Quarter Highlights

24 deals | $132M

Top Sector
# of Deals Internet
$ of Funding - Mobile

Top Deals

Top Cities

Seattle
14 deals | $84M
Redmond
3 deals | $21M
Bellevue
4 deals | $19M
Kirkland
3 deals | $8M

W
a
s
h
i
n
g
t
o
n

Impinj
Discovery Bay Games
Kymeta
Airbiquity
Tier 3
17%
29%
4%
25%
4%
4%
4% 9%
4%
0% 0%
VC Deal Volume (#) in Wash by Sector, Q3 2012
Internet
Electronics
Healthcare
Industrial
Energy & Utilities
All Other
www.cbinsights.com
25%
17%
16%
14%
9%
8%
5%
4%
2% 0% 0%
VC Investment ($) in Wash by Sector, Q3 2012
Internet
Electronics
Healthcare
Industrial
Energy & Utilities
All Other
www.cbinsights.com
www.cbinsights.com
Mobile Reappears in a Big Way in Q3
After being nearly invisible in Q2, Mobile surges back, taking one out of every four
deals in Washington in Q3 2012. Internet drastically loses share of dollars to
Healthcare and Mobile.
61
W
a
s
h
i
n
g
t
o
n

46%
38%
43%
63%
29%
21%
29% 18%
22%
25%
4%
4%
7%
4%
14% 17% 21%
9%
17%
3%
8%
14%
13%
11%
3%
17%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Washington by Sector - Number of Deals
Internet Healthcare
www.cbinsights.com
Last Five Quarters
45%
39%
52%
59%
17%
17%
36%
14%
36%
14%
1%
4%
3%
2%
8%
13%
17%
4%
25%
4%
29%
8%
15%
38%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Washington by Sector - Dollars of Funding
Internet Healthcare
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Early Stage Down in Terms of Both Deals and Dollars
Seed has a relatively strong quarter in Washington, but is still down substantially from
Q2. Overall early stage commands 52% of overall dealflow but this was the state's
lowest % of early stage deal activity since Q3'11.
62
W
a
s
h
i
n
g
t
o
n

14% 14%
11%
28%
17%
11%
45%
44%
31%
35%
14%
23%
15%
13%
22%
29%
9%
11%
19%
13%
21%
5%
15%
6%
11%
5% 4% 3%
13%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Washington by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
1% 2%
0%
3%
4%
6%
42%
33%
42%
34%
11%
21%
15%
14% 28%
38%
8%
14%
18%
5%
33%
16%
31%
19%
12% 12%
5%
4%
29%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Washington by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
TEXAS
63
www.cbinsights.com
Texas VC Slides to Five-Quarter Low
Since a strong closing in 2011, VC in Texas has followed a steady downward trend.
Q3 2012 represents a five-quarter low for Lone Star state in terms of both deals and
dollars.
64
T
e
x
a
s

$304
$476
$336
$157
$126
34
24
39
27
21
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Texas VC Investment and Deal Volume Trend
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Healthcare Leads in Dollars, but Field Remains Diverse
Texas continues to be a melting pot for VC investment not seeing any particular sector
dominate.
65
Quarter Highlights

21 deals | $126M

Top Sector
# of Deals Computer
Hardware & Services
$ of Funding Healthcare

Top Deals

Top Cities

Austin
9 deals | $35M
Sugar Land
2 deals | $21M
San Antonio
2 deals | $21M
Grand Prairie
1 deals | $18M
Plano
2 deals | $14M
Richardson
1 deals | $10M
Farmers Branch
1 deals | $3M
League City
1 deals | $2M
McKinney
1 deals | $2M
Dallas
1 deals | $0M

T
e
x
a
s

Neos Therapeutics
Vazata
Bio2Medical
Applied Optoelectronics
FireHost
14%
19%
14% 24%
14%
10%
5%
VC Deal Volume (#) in Texas by Sector, Q3 2012
Healthcare
Internet
Electronics
Industrial
Energy & Utilities
All Other
www.cbinsights.com
31%
20%
19%
14%
11%
3%
2%
VC Investment ($) in Texas by Sector, Q3 2012
Healthcare
Internet
Electronics
Industrial
Energy & Utilities
All Other
www.cbinsights.com
www.cbinsights.com
Energy Disappears in Q3 2012
A large part of Texas' recent downward trajectory is tied to the struggles of larger
struggles of Green Tech / Energy investments which have languished as of late.
66
T
e
x
a
s

26%
25% 26% 26%
19%
21%
29%
23%
15%
14%
15%
4%
10%
4%
0%
9%
29%
10%
11%
14%
9%
0%
7%
10%
21%
13%
31%
37%
43%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Texas by Sector - Number of Deals
Internet Healthcare
www.cbinsights.com
Last Five Quarters
21%
35%
24%
18%
20%
18%
8% 31%
21%
31%
36%
16%
16%
2%
54%
4%
5% 11%
6%
6%
3%
17%
3%
25%
35% 35%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Texas by Sector - Dollars of Funding
Internet Healthcare
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Early Stage Sees a Five Quarter High for Deal Share
Like other states, Seed VC sees growth in Texas as well. Series A also registers a
strong quarter in deals and lifts overall early stage deal volume to 48%.
67
T
e
x
a
s

9%
4%
11%
13%
19%
15%
39%
24%
17%
29%
35%
26%
34%
29%
14%
24%
4%
13%
8%
29%
9%
9%
13%
4%
9%
17%
5%
29%
10%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Texas by Series - Number of Deals
www.cbinsights.com
Last Five Quarters
1% 1% 2% 2% 3%
12%
16%
16%
14%
16%
26%
28%
14%
13%
25%
18%
22%
22%
22%
17%
16%
14%
25%
28%
21%
28%
20% 20% 21%
19%
Q3'11 Q4'11 Q1'12 Q2'12 Q3'12
Share of VC in Texas by Series - Dollars of Funding
www.cbinsights.com
Last Five Quarters
www.cbinsights.com
Definitions Ensuring Data Integrity
What's ncluded in our Quarterly Venture Capital Numbers? What is not?
68
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.
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.
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.
What is included?
What is excluded?
www.cbinsights.com
69
With CB Insights you can access deep private company info that was once exclusively
available behind prohibitively expensive paywalls.
Coverage Universe

Venture Capital 1999 to present
Angel Investment
Private Equity
Federal SBIR Grants 3 years
State Grant Programs
Incubators Over 300
Middle Market Private Companies

Sector Coverage

Green/clean tech
Internet
Mobile & Telecom
Software
Energy & Utilities
Healthcare
Industrial
Business Products & Services
Electronics
Environmental Services &
Equipment
Financial Services
Food & Beverages
Leisure
Media
Metals & Mining
Retail
Risk & Security

82,000+ Private Company Profiles.
Company & Investor Updates via Email.
Add companies and investors of
interest to your CBI Watchlist and get
notified of changes and updates
automatically.
Over 82,000 high value private
company profiles across industries and
sectors. Medical devices to
mobile. Industrial to internet.
From Angel to Private Equity.
Angel investment to venture capital to
private equity to government funding to
under the radar mid-market private
companies.
Management & Board Information
Find out about the people behind the
companies including management and
board of directors profiles.
Analytics & Reporting
Downloadable reports and analytics
which allow you to manipulate data
when and how you want to.
www.cbinsights.com
70
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Email

info@cbinsights.com
Telephone

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