VentureSource

U.S. -- 2Q 2014 VentureSource The following report presents Dow Jones VentureSource’s quarterly findings for U.S. venture capital fundraising, investment, valuation, and liquidity. The included charts and graphs offer a comprehensive view of the trends currently affecting the venture capital market.

Highlights for 2Q 2014 include:

U.S. venture capital fundraising amount raised and number of funds on decline from 1Q 2014;

Venture capital investment was at its highest since 1Q 2001;

Median pre-money valuation totaled $58M, more than double the valuation figure for 1Q 2014;

Amount raised and transactions on decline for both venture-backed mergers and acquisitions (M&As) and Initial public offerings (IPOs).

2 VentureSource Venture Fundraising in U.S. on decline from 1Q 2014

FUNDRAISING 76 funds garnered $7.4 billion in 2Q 2014, down 28% from the amount raised in the previous quarter. Number of funds also experienced a 5% decrease.

Tiger Global Private Investment Partners VIII LP was the largest U.S. venture capital fund of 2Q 2014 raising $1.5 billion and accounting for 20% of the total amount raised during the quarter.

Median U.S. fund size was $172 million in the first half of 2014.

U.S. VC Fundraising (2011 – 2014) 90 $12.00 Based on multiple closings 80 $10.00 70

60 $8.00

50 $6.00 40

30 $4.00

20 $2.00 10

0 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Amount Raised ($B) $3.59 $2.92 $6.76 $7.45 $6.57 $5.11 $3.04 $4.58 $6.76 $4.11 $4.80 $10.3 $7.43 Number of Funds 44 50 53 55 46 55 54 58 58 69 79 80 76

3 VentureSource Largest VC Funds Raised in 2Q 2014

FUNDRAISING

Firm Name Fund Name Amount ($M) City State Offering Status Fund Type Fund Category Closing Type

Tiger Global Private Investment Multi-stage venture Tiger Global Management LLC $1,500.00 New York NY Closed Final Partners VIII LP capital Venture Capital

Bain Capital Venture Capital Early-stage venture Bain Capital Ventures $650.00 Boston MA Closed Final Fund 2014 LP capital Venture Capital

Early-stage venture GGV Capital GGV Capital V LP $621.92 Menlo Park CA Closed Final capital Venture Capital

Multi-stage venture Oak Investment Partners Oak HC/FT Partners LP $400.00 Norwalk CT Open First capital Venture Capital

Multi-stage venture Iconiq Strategic Partners ICONIQ Strategic Partners LP $393.09 San Francisco CA Open First capital Venture Capital

4 VentureSource U.S. Venture Investment on the Rise in 2Q 2014

U.S.-based companies raised $13.8 billion from 917 venture capital deals during 2Q 2014, a 21% and 4% FINANCING increase both in capital and deal count from the previous quarter.

Compared to the same period in 2013, amount invested registered a 60% increase, while number of deals dipped 2%.

Consumer Services and Business and Financial Services were the strongest sectors, respectively with 28% and 24% share of total amount invested.

Equity Financings into U.S. – $16.00 1200 based, VC-backed Companies (2011 – 2014) $14.00

$12.00

$10.00

$8.00 1000

$6.00

$4.00

$2.00

$0.00 800 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Amount Raised ($B) $9.15 $10.77 $8.12 $7.60 $9.34 $7.78 $9.03 $7.60 $8.64 $9.36 $9.34 $11.41$13.84 Number of Deals 937 960 913 889 1011 916 918 903 938 925 981 885 917

5 VentureSource

FINANCING

Equity Financings into U.S.–based, VC–backed Companies, by Round Class (2011 – 2014)

Number of Deals

400

300

200

100

0 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Restart 26 13 11 10 14 11 18 7 7 8 12 8 7 Later 284 296 290 253 307 281 285 263 287 276 280 283 340 Second 179 157 152 139 179 148 158 145 199 198 212 177 208 First 302 326 311 310 353 323 309 340 301 312 349 293 292 Seed 107 134 108 139 121 116 104 113 115 100 88 89 38

6 VentureSource

FINANCING

Equity Financings into U.S.–based, VC–backed Companies, by Round Class (2011 – 2014)

Amount Raised ($B)

$10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Restart $0.40 $0.23 $0.08 $0.09 $0.16 $0.24 $0.69 $0.08 $0.18 $0.08 $0.11 $0.29 $0.14 Later $4.58 $5.97 $4.69 $4.15 $5.11 $4.54 $4.43 $4.44 $4.84 $5.26 $5.10 $6.35 $9.24 Second $1.90 $1.96 $1.50 $1.01 $1.56 $1.27 $1.34 $1.30 $1.73 $1.55 $1.84 $1.81 $2.55 First $1.60 $2.11 $1.46 $1.47 $2.08 $1.38 $1.64 $1.52 $1.35 $1.63 $1.86 $1.42 $1.69 Seed $0.10 $0.13 $0.11 $0.10 $0.09 $0.10 $0.09 $0.07 $0.08 $0.09 $0.06 $0.06 $0.04

7 VentureSource

FINANCING

Equity Financings into U.S.-based, VC-backed Companies, Median Deal Size ($M) (2011 – 2014)

Median Equity Deal Size ($M)

$7.00

$6.00

$5.00

$4.00

$3.00

$2.00

$1.00

$0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Median Equity Deal Size ($M) $5.00 $5.28 $4.00 $3.96 $4.58 $3.71 $4.17 $4.00 $4.54 $4.00 $4.30 $4.50 $6.25

8 VentureSource Equity Financings into U.S.-based, VC-backed Companies, by Industry Group (2Q 2014)

Consumer Services saw the largest investment allocation, with 171 deals garnering almost $3.9 billion and FINANCING accounting for 28% of total equity investment.

The Business and Financial Services sector raised the second highest proportion of investment for 2Q’14 - $3.3 billion into 242 deals, up 4% and 9% in dollars and deals, respectively, from 1Q’14 figures.

IT and Healthcare shared third position. IT decreased 13% quarter over quarter, with $3 billion invested in 236 deals, a 4% drop also for the number of deals. The sector’s investment figure represents a 22% share of total equity investment into U.S. VC-backed companies for the quarter.

Healthcare companies raised $3 billion across 201 deals, a 33% and 18% increase compared to the previous quarter.

2Q’14 Industry Breakdown 2Q'14 Industry Breakdown By Amount Raised ($B) By Number of Deals

Business and Financial Services Business and Financial Services 236 242 Consumer Goods 22% 24% Consumer Goods Consumer Services Consumer Services 2% 24 26 Energy & Utilities 1% Energy & Utilities Healthcare

201 171 22% Healthcare Industrial Goods & Materials 15 28% Industrial Goods & Materials 1% Information Technology Information Technology

9 VentureSource Top 5 Deals into VC-backed Companies (2Q 2014)

FINANCING

Industry Industry Raised Round Investors Co. Name Location Industry Code Brief Description Close Date Round Type Group Segment ($M) (* denotes lead)

BlackRock Private Equity Partners*, Fidelity Uber Provider of an on-demand Investments*, Google Ventures, San Francisco, Consumer Transportation Technologies Travel and Leisure transportation service 06/06/2014 5th $1,200.00 Kleiner Perkins Caufield & Byers, CA Services Services Inc. platform. Menlo Ventures, Summit Partners, Wellington Management Co. LLP*

Provider of an online Travel Dragoneer Investment Group*, San Francisco, Consumer marketplace for rental and Airbnb Inc. Travel and Leisure Arrangement/ 4/18/2014 4th $450.00 Sequoia Capital, T. Rowe Price CA Services short-term stay Tourism Group Inc., TPG Growth LLC* accommodations.

Fidelity Investments, Greylock Partners, Index Ventures, Manufacturer of flash- Redpoint Ventures, Sutter Hill PURE Storage Mountain Information Electronics and Data Storage storage boxes for data 4/17/2014 5th $225.00 Ventures, T. Rowe Price Group Inc. View, CA Technology Computer Hardware centers. Inc., Tiger Global Management LLC, Wellington Management Co. LLP

Andreessen Horowitz, Bessemer Provider of a visual discovery Venture Partners, Fidelity San Francisco, Consumer Consumer Online Pinterest Inc. tool to find ideas for projects 5/15/2014 6th $200.00 Growth Partners Europe, CA Services Information Services Communities and interests. FirstMark Capital LLC, SV Angel, Valiant Capital Management LP

Endurance Ventures, Iconiq Strategic Partners, Insight Automattic San Francisco, Consumer Consumer Online Provider of open source 5/2/2014 3rd $160.00 Venture Partners, Tiger Global Inc. CA Services Information Services Communities blogging solutions. Management LLC, True Ventures, Individual Investors

10 VentureSource

FINANCING

Most Active Investors for U.S.-based, VC-backed Companies (2Q 2014)

35

30 29 27

25 23 23

20 19

15

10

5

0 Andreessen Horowitz New Enterprise SV Angel First Round Capital Sequoia Capital Associates

11 VentureSource Number of Deals Amount Raised ($B) by Primary Region by Primary Region

FINANCING 2Q 2014 2Q 2014

Alaska/ Islands 1 $0.0004 Mid-Atlantic 188 $1.95 Midwest Central 15 $0.18 Midwest East 52 $0.35 Mountain 38 $0.39 New England 102 $1.19 Northern California 326 $7.45 Pacific Northwest 32 $0.39 South Central 43 $0.30 South East 47 $0.36 Southern California 71 $0.86

Number of Deals in 2Q 2014 Amount Raised ($B) in 2Q 2014 by Primary Region by Primary Region

Alaska/Islands Alaska/Islands Mid-Atlantic Mid-Atlantic Midwest Central Midwest Central Midwest East Midwest East Mountain Mountain New England New England Northern California Northern California Pacific Northwest Pacific Northwest South Central South Central South East South East Southern California Southern California

12 VentureSource Number of Deals Amount Raised ($B) by subregion by subregion FINANCING 2Q 2014 2Q 2014

San Francisco Bay Area 323 $7.40 Boston Metro 78 $0.79 New York Metro 122 $1.57 Potomac 33 $0.18 Los Angeles Metro 37 $0.37 San Diego Metro 17 $0.29 Orange County 16 $0.18 Seattle Metro 26 $0.35 Austin Metro 26 $0.18 Dallas-Fort Worth 8 $0.07 Chicago Metro 21 $0.13

Subregion Breakout Subregion Breakout Number of Deals Amount Raised ($B)

Number of Deals by Subregion Amount Raised ($B) by Subregion San Francisco Bay Area San Francisco Bay Area 323 $7.40 Boston Metro Boston Metro 78 $0.79 New York Metro New York Metro 122 $1.57 Potomac Potomac 33 $0.18 Los Angeles Metro Los Angeles Metro 37 $0.37 San Diego Metro San Diego Metro 17 $0.29 Orange County Orange County 16 $0.18 Seattle Metro Seattle Metro 26 $0.35 Austin Metro Austin Metro 26 $0.18 Dallas-Fort Worth Dallas-Fort Worth 8 $0.07 Chicago Metro Chicago Metro 21 $0.13

13 VentureSource

VALUATIONS

Equity Financings into U.S. – based, VC-backed Companies, Median Pre-money Valuation ($M) (2011 – 2014)

$70.00

$60.00

$50.00

$40.00

$30.00

$20.00

$10.00

$0.00 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Median Pre-money Valuation ($M) $21.80 $28.50 $19.76 $16.00 $17.50 $29.88 $39.01 $13.60 $24.15 $15.80 $20.00 $28.35 $58.26

14 VentureSource Venture M&A and IPO Market Activity in the U.S. during 2Q 2014

Mergers and acquisitions (M&As) of venture-backed companies in 2Q 2014 decreased by 26% in value from LIQUIDITY those completed in 1Q 2014, with 108 deals garnering $12.6 billion.

25 venture-backed IPOs took place during 2Q 2014, a 34% decrease from the previous quarter.

Exit Opportunities for U.S. 2Q'14 VC-backed Companies 1Q'14 (2011 – 2014) 4Q'13 3Q'13 2Q'13 1Q'13 4Q'12 3Q'12 2Q'12 1Q'12 4Q'11 3Q'11 2Q'11 0 20 40 60 80 100 120 140 160 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 IPOs 14 11 10 20 12 10 8 9 20 25 20 38 25 M&As 117 146 142 111 122 104 126 98 91 122 127 128 108

15 VentureSource U.S. VC-backed M&As (2011-2014)

108 M&As of venture-backed companies in U.S. garnered $12.6 billion during 2Q 2014. LIQUIDITY

In contrast with 1Q 2014, when a total of 128 transactions accumulated almost $17 billion, both number of M&As and amount raised fell by 16% and 26% respectively.

The largest M&A of the quarter was Oculus VR Inc., which was acquired by Facebook Inc. (Nasdaq: FB) for $2 billion.

U.S. VC-backed M&A Activity $18.00 160 (2011 - 2014) $16.00 140

$14.00 120 $12.00 100 $10.00 80 $8.00 60 $6.00 40 $4.00

$2.00 20

$0.00 0 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Amount Paid ($B) $11.98 $13.58 $9.69 $10.41 $11.95 $11.74 $8.91 $5.59 $9.21 $11.33 $14.14 $16.97 $12.64 Number of M&As 117 146 142 111 122 104 126 98 91 122 127 128 108

16 VentureSource Top 3 U.S. M&As (2Q 2014)

LIQUIDITY

Company Industry Industry Amount Location Brief Description Industry Code Close Date Round Type Acquirer Name Segment Group Paid ($M)

Provider of virtual reality Oculus VR Inc. Irvine, CA Sports/Leisure Goods Personal Goods Consumer Goods 4/25/2014 Acquisition $2,000.00 Facebook Inc. gaming technology.

Healthcare Medical Software Minneapolis, Provider of a Web-based Ability Network Inc. Administration and Information Healthcare 4/7/2014 Acquisition $550.00 Summit Partners MN health network. Software Services

Provider of a multi- Communications and Communications Information Maker Studios Inc. Culver City, CA 6/2/2014 Acquisition $500.00 Walt Disney Co. channel network. Networking: Other and Networking Technology

17 VentureSource U.S. VC-backed IPOs (2011-2014)

25 venture-backed companies raised almost $2.2 billion through public offerings in 2Q 2014. Number of deals LIQUIDITY decreased by 34% and capital raised also registered a 26% decrease from the previous quarter.

The largest IPO of the quarter was GoPro Inc. (NASDAQ:GPRO), which completed a $427 million IPO.

U.S. VC-backed IPO Activity (2011 - 2014) $9.00 40

$8.00 35

$7.00 30 $6.00 25 $5.00 20 $4.00 15 $3.00 10 $2.00

$1.00 5

$0.00 0 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Raised ($B) through IPO $1.71 $0.43 $2.37 $1.42 $7.75 $0.81 $1.22 $0.64 $1.80 $2.22 $3.55 $2.94 $2.18 Number of IPOs 14 11 10 20 12 10 8 9 20 25 20 38 25

18 VentureSource Top 3 U.S. IPOs (2Q 2014)

LIQUIDITY

Company Industry Industry Round Raised through Location Brief Description Industry Code Close Date Exchange Name Segment Group Type IPO ($M)

Provider of photo and video solutions for capturing, Electronics and Information GoPro Inc. San Mateo, CA Consumer Electronics 6/24/2014 IPO $427.20 NASDAQ: GPRO managing, sharing, and Computer Hardware Technology enjoying content.

Arista Networks Provider of cloud Communications Information Santa Clara, CA Fiberoptic Equipment 6/5/2014 IPO $225.75 NYSE: ANET Inc. networking solutions. and Networking Technology

Developer of cancer immunotherapy products Santa Monica, designed to harness the Biotechnology Kite Pharma Inc. Biopharmaceuticals Healthcare 6/20/2014 IPO $127.50 NASDAQ: KITE CA patient’s own immune Therapeutics system to eradicate cancer cells.

19 VentureSource Dow Jones VentureSource helps venture capitalists, corporate development executives, investment bankers and service providers find deal and partnership opportunities, perform comprehensive due diligence and examine trends in venture capital investment, fund-raising and liquidity. It provides ABOUT US accurate, comprehensive data on venture-backed companies – including their investors and executives – in every region, industry and stage of development throughout the world.

The investment figures included in this release are based on aggregate findings of Dow Jones' proprietary research and are contained in VentureSource. This data was collected through surveys of professional firms, interviews with company executives, and from secondary sources. These venture capital statistics cover equity investments into early stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors. Figures contained throughout the report current at time of editorial but are subject to change without notice. No statement herein is to be construed as a recommendation to buy or sell securities or to provide investment advice.

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