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Louisville Venture Club January 6, 2010 Mark G. Heesen President

Louisville Venture Club January 6, 2010 Mark G. Heesen President. Many Options to Choose From. Entrepreneur Personal Funds “Friends and Family” Personal credit card and other borrowings Angel investors Venture capital Corporate direct investment Venture leasing Mezzanine Financing

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Louisville Venture Club January 6, 2010 Mark G. Heesen President

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  1. Louisville Venture Club January 6, 2010 Mark G. Heesen President

  2. Many Options to Choose From • Entrepreneur Personal Funds • “Friends and Family” • Personal credit card and other borrowings • Angel investors • Venture capital • Corporate direct investment • Venture leasing • Mezzanine Financing • Merger and Acquisition • Initial Public Offering • Secondary/Follow-on Public Offering • Private Placements – Debt & Equity • Buyout/Acquisition Financing • Corporate Debt

  3. Venture Impact 2008The Economic Impact of Venture Capital on the US Economy ...It’s Not Just Deals and Exits! So how do we measure the results?

  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. The Number of US VC Firms Has Peaked .. Thankfully Source: 2008 NVCA Yearbook, prepared by Thomson Reuters, figure 1.04

  8. VC Fundraising Matches Investment - Does not include Corporate Venture groups. Source: Thomson Reuters/NVCA

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

  10. VC Investment Peaked in 2000; 2008 Was Down 8%; 9M09 was $12B $103B $28B $12B Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

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

  12. Clean Technology investment grows significantly2008: $4.1B in 290 Deals Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  13. Despite the recession Q4, VCs funded 1,211 new companies in 2008; Very slow in 2009 Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  14. History has shown VC Deploys Capital To Most Promising Sectors: Four Examples (“Sector Churn”) Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  15. The Midwest –IL, MO, IN, KY, OH, MI, and western PANote that data “cuts” can be done from the historical trend data section of www.pwcmoneytree.com.

  16. Recent Midwest Investment Tracks National Decline2008: $1.3B in 281 Deals9M09: $557M in 152 Deals * $ Millions Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters 16

  17. Midwest Investment: Heavily Weighted Toward Hot Sectors (Energy and Life Sciences)Last 8 Quarters Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  18. Kentucky, Indiana, and OhioA Close Up Look*For more detail, use the online stats calculator at www.pwcmoneytree.com > Historical Trend Data. Use the dialogue boxes at the bottom to filter the data. Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  19. Relative State Investment Varies by Specific Opportunities and Sector Strengths Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  20. Stats on Money Invested Is Very Deal-Specific Especially in Lesser-Traveled Areas Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

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

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

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

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

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

  26. “Later Stage” is bloated with companies which can’t move on * - Through 3Q 2009 Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

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

  28. www.nvca.org

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