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1: Slide 1 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial






7: Slide 7 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial About The Report PricewaterhouseCoopers and the National Venture Capital Association produce the MoneyTree Report� based on data from Thomson Financial Companies have received at least one round of financing involving a professional VC firm or equivalent Captures: tranches, not term sheets, foreign VCs, qualified private placement Excludes: debt, bridge loans, recaps, roll-ups, IPOs, PIPEs, leasing, etc. MoneyTree� Report in its 12th year Results online at www.pwcmoneytree.com, www.nvca.org, www.ventureeconomics.com


9: Slide 9 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial MoneyTree Total Investments: Q1 1998 � Q3 2006 $5.3 billion invested in 714 companies in the Q3 2005, down from $6.1 billion invested in Q2 2005 But, higher than Q1 2005 of $5.0 billion and Q3 2004 of $4.6 billion. For the first nine months of 2005, investing totaled $16.3 billion compared to $15.9 billion for the first nine months of 2004. On track to break some post-bubble records: Total venture capital investing in calendar 2005 could meet or exceed 2002�s $21.7 billion which is the highest level in the prior three years. Investments in Later stage companies rose to $2.6 billion � a four-year high -- following the upward trend that began in late 2004. Life Sciences continued its dominance with $1.6 billion in Q3, on track to equal or better calendar 2004 which was a three-year high. Within the Telecommunications industry, the Wireless sub-category jumped to $455 million, also a four-year high. $5.3 billion invested in 714 companies in the Q3 2005, down from $6.1 billion invested in Q2 2005 But, higher than Q1 2005 of $5.0 billion and Q3 2004 of $4.6 billion. For the first nine months of 2005, investing totaled $16.3 billion compared to $15.9 billion for the first nine months of 2004. On track to break some post-bubble records: Total venture capital investing in calendar 2005 could meet or exceed 2002�s $21.7 billion which is the highest level in the prior three years. Investments in Later stage companies rose to $2.6 billion � a four-year high -- following the upward trend that began in late 2004. Life Sciences continued its dominance with $1.6 billion in Q3, on track to equal or better calendar 2004 which was a three-year high. Within the Telecommunications industry, the Wireless sub-category jumped to $455 million, also a four-year high.

10: Slide 10 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial MoneyTree Total Investments: 1980 � YTD Q3 2006

11: Slide 11 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial MoneyTree Total Investments: 1995 � YTD Q3 2006

12: Slide 12 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Region: Q3 2006 Silicon Valley broke the $2 billion mark for the first time in a year and accounted for nearly 40% of all venture capital invested in the U.S. New England was second behind Silicon Valley, capturing $612 million in Q3 The Southeast was third with $461 million going into 59 deals during the quarter Rounding out the top 5 are LA/Orange County with $340 million and NY Metro with $249 million Silicon Valley broke the $2 billion mark for the first time in a year and accounted for nearly 40% of all venture capital invested in the U.S. New England was second behind Silicon Valley, capturing $612 million in Q3 The Southeast was third with $461 million going into 59 deals during the quarter Rounding out the top 5 are LA/Orange County with $340 million and NY Metro with $249 million

13: Slide 13 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Region: Q3 2006

14: Slide 14 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Region � Quarterly Percent of Total U.S. Investments

15: Slide 15 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial

16: Slide 16 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Industry: Q3 2006 Life Sciences continues it�s dominance The Life Sciences sector (Biotechnology and Medical Devices industries, together) outpaced the prior quarter with $1.6 billion invested in 155 companies in the third quarter. Although the Telecommunications industry category has languished in recent years, the Wireless sub-category has shown steady growth. Year-to-date, 114 wireless-related companies received $984 million compared to full-year 2004 of 135 companies and $1.1 billion. Notably, the two largest deals of the quarter were wireless-related companies. FiberTower Corporation � received $150 million in Q3 Visto Corporation � received $70 million in Q3 The Software industry dipped in the third quarter, but retained its position as the largest single industry category with 185 companies capturing $1.0 billion. Year-to-date, Software amounted to $3.5 billion in 627 companies, lagging full-year 2004 with 881 companies and $5.2 billion. Life Sciences continues it�s dominance The Life Sciences sector (Biotechnology and Medical Devices industries, together) outpaced the prior quarter with $1.6 billion invested in 155 companies in the third quarter. Although the Telecommunications industry category has languished in recent years, the Wireless sub-category has shown steady growth. Year-to-date, 114 wireless-related companies received $984 million compared to full-year 2004 of 135 companies and $1.1 billion. Notably, the two largest deals of the quarter were wireless-related companies. FiberTower Corporation � received $150 million in Q3 Visto Corporation � received $70 million in Q3 The Software industry dipped in the third quarter, but retained its position as the largest single industry category with 185 companies capturing $1.0 billion. Year-to-date, Software amounted to $3.5 billion in 627 companies, lagging full-year 2004 with 881 companies and $5.2 billion.

17: Slide 17 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Industry � Quarterly Percent of Total U.S. Investments

18: Slide 18 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Life Science Investments � Percent of Total U.S. Investments For the first nine months 2005, Life Sciences accounted for $4.2 billion or 26% of all venture investing. At the current rate, Life Sciences will meet or exceed 2004�s total of $5.8 billion. For the first nine months 2005, Life Sciences accounted for $4.2 billion or 26% of all venture investing. At the current rate, Life Sciences will meet or exceed 2004�s total of $5.8 billion.

19: Slide 19 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Stage of Development: Q3 2006 The sustained dominance of Later stage investing over the past 12 months reflects venture capitalists continued support of existing portfolio companies via additional follow-on rounds. In the third quarter, Later stage funding rose slightly to $2.6 billion going into 248 companies. Year-to-date 2005, Later stage amounted to $7.2 billion, approaching full-year 2004 figures of $7.6 billion which was a three-year peak. Funding for Start-Up and Early stage companies fell back in Q3 to $1.0 billion 216 companies, but still above the first quarter. However, the year-to-date 2005 totals of $3.2 billion and 697 deals are on track to match full-year 2004 of $4.3 billion and 1028 deals. Investing in Expansion stage companies fell to its lowest point of the year in the third quarter; $1.6 billion in 250 companies. Year-to-date figures of $6.0 billion and 825 deals point to a full-year 2005 that will be significantly lower than 2004 of $9.7 billion and 1,217 deals. The sustained dominance of Later stage investing over the past 12 months reflects venture capitalists continued support of existing portfolio companies via additional follow-on rounds. In the third quarter, Later stage funding rose slightly to $2.6 billion going into 248 companies. Year-to-date 2005, Later stage amounted to $7.2 billion, approaching full-year 2004 figures of $7.6 billion which was a three-year peak. Funding for Start-Up and Early stage companies fell back in Q3 to $1.0 billion 216 companies, but still above the first quarter. However, the year-to-date 2005 totals of $3.2 billion and 697 deals are on track to match full-year 2004 of $4.3 billion and 1028 deals. Investing in Expansion stage companies fell to its lowest point of the year in the third quarter; $1.6 billion in 250 companies. Year-to-date figures of $6.0 billion and 825 deals point to a full-year 2005 that will be significantly lower than 2004 of $9.7 billion and 1,217 deals.

20: Slide 20 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Stage of Development � Quarterly Percent of Total First Sequence Dollars

21: Slide 21 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Stage of Development � Quarterly Percent of Total First Sequence Deals

22: Slide 22 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Investments by Sequence of Financing: Q3 2006

23: Slide 23 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial First Sequence Financing � Investment Amount Venture capitalists continued to make new investments at a steady clip in the third quarter. A total of 215 companies got their first-ever round of institutional venture capital which amounted to $1.1 billion. Year-to-date, 653 companies received their first venture capital for a total of $4.0 billion. Full-year 2004 figures of 854 companies and $4.6 billion were both three-year highs, putting 2005 on track to a four-year high. Venture capitalists continued to make new investments at a steady clip in the third quarter. A total of 215 companies got their first-ever round of institutional venture capital which amounted to $1.1 billion. Year-to-date, 653 companies received their first venture capital for a total of $4.0 billion. Full-year 2004 figures of 854 companies and $4.6 billion were both three-year highs, putting 2005 on track to a four-year high.

24: Slide 24 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial First Sequence Financing � Number of Deals The most first-time deals were in the Software industry and Life Sciences sector with 46 companies in each. For the first nine months 166 Software companies got institutional venture capital for the first time, or 25% of all first-time deals. Life Sciences followed closely with 120, or 18%. First-time Telecommunications investing reached a four-year high with 26 deals, reflecting renewed interest in the wireless arena. Media & Entertainment and Industrial/Energy followed with 13 deals each. First sequence investing in other industries generally mirrored the pattern of overall industry investing.The most first-time deals were in the Software industry and Life Sciences sector with 46 companies in each. For the first nine months 166 Software companies got institutional venture capital for the first time, or 25% of all first-time deals. Life Sciences followed closely with 120, or 18%. First-time Telecommunications investing reached a four-year high with 26 deals, reflecting renewed interest in the wireless arena. Media & Entertainment and Industrial/Energy followed with 13 deals each. First sequence investing in other industries generally mirrored the pattern of overall industry investing.

25: Slide 25 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial First Sequence Financing �Percent of Total U.S. Investments

26: Slide 26 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial First Sequence Deals in Startup & Early Stage Companies Year-to-date, the most first-time financings, 69%, went to Start-Up and Early stage companies. Expansion stage companies were 26% and Later stage 5%. Year-to-date, the most first-time financings, 69%, went to Start-Up and Early stage companies. Expansion stage companies were 26% and Later stage 5%.

27: Slide 27 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Median Deal Size vs. Mean Deal Size �Quarterly Total U.S. Investments

28: Slide 28 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Post-Money Valuations � Early Stage Companies 1995 to Q2 2006 Average post-money valuations of Early stage companies were essentially flat at $14.4 million for the 12 months ending Q2 2005 compared to $14.2 million for the period ending Q1 2005. (Note that valuation data lags investment data by one quarter.)Average post-money valuations of Early stage companies were essentially flat at $14.4 million for the 12 months ending Q2 2005 compared to $14.2 million for the period ending Q1 2005. (Note that valuation data lags investment data by one quarter.)

29: Slide 29 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Post-Money Valuations � Expansion Stage Companies 1995 to Q2 2006 Average post-money valuations dropped to $46.2 million versus $53.3 million for the prior period. Average post-money valuations dropped to $46.2 million versus $53.3 million for the prior period.

30: Slide 30 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Post-Money Valuations � Later Stage Companies 1995 to Q2 2006 The average post-money valuation rose to $78.9 million for the 12 months ending Q2 2005 compared to $63.2 million for the Q1 2005 period. The average post-money valuation rose to $78.9 million for the 12 months ending Q2 2005 compared to $63.2 million for the Q1 2005 period.

31: Slide 31 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Q3 2006 � Most Active Venture Investors

32: Slide 32 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Thomson Venture Economics�U.S. Private Equity Performance Index (PEPI) The most recent performance data available is from the 1st quarter of 2005. Short-term venture capital performance showed signs of fluctuation at the close of the 1st quarter of 2005 with a decline in the 1 and 5 year investment horizons and an improvement in the 3 year horizon. Despite the short-term swing, the 10 and 20 year horizon returns remained constant for venture capital for the period ending 3/31/05 at 25.4% and 15.6% respectively. For the same time horizon, buyout funds returned 8.7% and 13%. All private equity continued to outperform both the NASDAQ and the S&P 500 for the long-term with a 12.5% ten year return.The most recent performance data available is from the 1st quarter of 2005. Short-term venture capital performance showed signs of fluctuation at the close of the 1st quarter of 2005 with a decline in the 1 and 5 year investment horizons and an improvement in the 3 year horizon. Despite the short-term swing, the 10 and 20 year horizon returns remained constant for venture capital for the period ending 3/31/05 at 25.4% and 15.6% respectively. For the same time horizon, buyout funds returned 8.7% and 13%. All private equity continued to outperform both the NASDAQ and the S&P 500 for the long-term with a 12.5% ten year return.

33: Slide 33 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Analysis of Venture-Backed IPO and M&A Activity 19 VC-backed companies raised $1.5b through IPOs, and 76 vc-backed companies were acquired in the third quarter of 2005. Q3 marks the first time in 2005 that the total venture-backed IPO offering amount has been over $1 billion. The technology sector led the quarter with 9 venture-backed IPOs raising a total of $759.1 million. In addition to the IPOs completed this quarter, there are currently 30 venture-backed companies in-registration with the SEC. This figure is down from the 38 in-registration at the end of the second quarter.19 VC-backed companies raised $1.5b through IPOs, and 76 vc-backed companies were acquired in the third quarter of 2005. Q3 marks the first time in 2005 that the total venture-backed IPO offering amount has been over $1 billion. The technology sector led the quarter with 9 venture-backed IPOs raising a total of $759.1 million. In addition to the IPOs completed this quarter, there are currently 30 venture-backed companies in-registration with the SEC. This figure is down from the 38 in-registration at the end of the second quarter.

34: Slide 34 PricewaterhouseCoopers/National Venture Capital Association MoneyTree� Report based on data from Thomson Financial Venture Capital and LBO/Mezzanine Fundraising* The private equity fundraising climate remained robust in Q3 2005 with 45 venture funds raising $5.4 billion and 45 buyout & mezzanine funds fetching $16.8 billion. While the quarterly totals represented a fall off in activity from a strong 2nd quarter, the average venture fund size continued to remain strong at $119 million. After the 3 quarters of this year, both venture and buyout fundraising levels have already surpassed 2004 levels.The private equity fundraising climate remained robust in Q3 2005 with 45 venture funds raising $5.4 billion and 45 buyout & mezzanine funds fetching $16.8 billion. While the quarterly totals represented a fall off in activity from a strong 2nd quarter, the average venture fund size continued to remain strong at $119 million. After the 3 quarters of this year, both venture and buyout fundraising levels have already surpassed 2004 levels.

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