The Florida Venture Forum, the Gulf Coast Venture Forum and the EDC of Sarasota are proud to present

1. The Florida Venture Forum, the Gulf Coast Venture Forum and the EDC of Sarasotaare proud to present MARK G. HEESEN State of the Venture Capital Industry October 14, 2009 Sarasota, Florida

2. Thank you to our sponsors

3. State of the Venture Capital Industry October 2009 Mark G. Heesen President

4. In 2008, venture backed companies: Provided 12.05 million US jobs Had sales of $2.3 trillion Represents 20.5% of GDP Still dominated venture-created sectors 74% of telecommunications jobs 81% of software jobs 55% of semiconductor revenue 67% of electronics/instrumentation revenue Global Insight Study Source: Venture Impact 2009 by Global Insight

5. Fundraising & Resources

6. Capital under mgt & # firms peaked; Industry capital now $197B Source: NVCA 2008 Yearbook prepared by Thomson Reuters

7. VC Fundraising Matches Investment - Late 2008’s Denominator Effect Killed Fundraising (Less than $2B in 3Q 2009 Does not include Corporate Venture groups. Source: Thomson Reuters/NVCA

8. Investment Marches On -Rumors that the Venture Industry has stopped investing are exaggerated

9. VC Investment Peaked in 2000; 2008 Was Down 8%; 1H09 was $6.8B $103B $28B $7B Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

10. Investment Started Slowing Considerably in 3Q08 from a 5-year Steady Slow Growth Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

11. Clean Technology investment grows significantly2008: $4B in 286 Deals Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

12. Despite the recession Q4, VCs funded 1,202 new companies in 2008; Very slow YTD …. Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

13. Florida is currently ranked 17th for overall venture capital investment. Venture Capital Investment In Billions 2008 State Ranking 13

14. Venture-backed companies are a critical engine of economic growth for Florida. From 1970 – 2008 venture capitalists invested $10.2 billion in 639 companies in FL. Public companies headquartered in FL that were once venture-backed account for 242,074 jobs and $76 billion in revenue.* FL ranks #11 in jobs and #9 in revenues at venture-backed companies headquartered in the state.* One U.S. job was created for every $42,135 of venture capital dollars invested in the state of Florida. 14 * According to 2009 Global Insight study

15. Annual average venture capital investment in Florida from 2003-2008 was $400 million. * # Companies $ Billions 15 * 2000 numbers reflect technology bubble

16. Florida venture-backed companies receiving top funding in 2008 represent a broad range of industries. Top venture-funded FL companies - 2008 16

17. The highest venture funded industries in Florida are software, telecom, and energy. VC Investment in FL - Industry Breakout - 2008

18. 93% of venture capital investment intoFL companies comes from out of state. In 2008, venture capital dollars invested in FL companies came from venture firms headquartered in:

19. The Exit Scene - the importance of acquisitions has become clear over the past several years

20. IPO Levels Were Good in 2004 and Okay in 2007; Awful Now Source: Thomson Reuters/National Venture Capital Association

21. What’s in the IPO Pipeline?Dismal Short Term…Don’t confuse “uptick” with “recovery”… Source: Thomson Reuters/National Venture Capital Association

22. VB Acquisition Counts Were Steady; Down Now – Quality Varies Source: Thomson Reuters/National Venture Capital Association

23. M&A Exits Aren’t Providing Much Liquidity Either Source: Thomson Reuters/National Venture Capital Association

24. Those Few Acquisitions Which Do Happen Are Not Great Source: Thomson Reuters/National Venture Capital Association – Undisclosed txns are prorated

25. Venture Exit Counts- IPOs and M&A by Year Source: Thomson Reuters/National Venture Capital Association

26. Performance

27. Venture Capital Returns: Still Around 20% over the long haul net to the LPs Through Q2 2009 Except * through Q1 2009 Source: Cambridge Associates U.S Venture Capital Index®, the performance benchmark of the National Venture Capital Association

28. Public Policy andThe Venture IndustrySome Wins; Many Challenges …

29. More people will graduate in the US [in 2006] with sports-exercise degrees than electrical engineering degrees. So if we want to be the massage capital of the world, we’re well on our way … American competitiveness ... • Jeffrey Immelt • CEO of GE in a • 2006 Globalist interview

30. Key US VC building blocks ...Our Ecosystem! • Capital formation • Prudent man rule – enabled pension investment • LP laws • Capital gains tax reduction • Empowered entrepreneurs • Capital gains tax reductions • Stock options/team building tools • Reasonable bankruptcy laws • Protect companies – IP laws • Abundant customers willing to do business with SMEs • Exit markets – the NASDAQ • Face-to-face investing/proximity • Cultural acceptance

31. “Buy low… sell high” is easier if you really buy low! Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

32. www.nvca.org