FIN 500 Washington University Venture Capital Questions

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Required Readings

  1. National Venture Capital Association ("NVCA") 2020 Yearbook, pages 5-28, 34-37.
  2. CalPERS’ Private Equity Fees $3.4 Billion (from Wall Street Journal)
  3. Inside CalPERS Direct (from Chief Investment Officer)
  4. Lower VC Returns on Horizon (from Pensions & Investments)
  5. Cambridge Associates Q1 2020 US Venture Capital Return Benchmarks, pages 6-7.
  6. Now What? (from Pitchbook Private Market Playbook Q2 2020)

After reading the required readings, use those materials and your own knowledge to answer the following questions.

Please be concise in your responses, focusing on key facts and interpretations rather than repeating extensive contents of the readings. The maximum length of your entire response is limited to one page of 12-point text double-spaced. (It is not necessary to repeat the questions in your response.)

Questions:

  1. Of statements (A) and (B) below, which are you more inclined to agree with? Why? What evidence supports your position?(A) "Compared to the most relevant benchmark, the NASDAQ Composite, Cambridge Associates finds that venture capital has either underperformed or only minutely outperformed the benchmark over the last 5, 10, 15 and 20 years. I see no reason to commit capital to risky, illiquid assets that fails to outperform the public markets."(B) "Cambridge Associates finds that venture capital has substantially overperformed all the comparable public-market indices over a twenty-five year window, the longest provided, by increments ranging from 25-28% depending upon the specific index chosen. I expect venture capital to continue to overperform public markets in the future, consistent with the weight of historical experience."
  2. How do you anticipate that the VC industry will be impacted by the ongoing COVID-19 crisis? You may wish to consider elements including the ability to raise capital for new venture funds, the ability to identify and adequately capitalize new portfolio company investments, the management of existing portfolio companies, and the ability to exit existing portfolio company investments.

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Y E ARBOOK Data provided by Credits & Contact National Venture Capital Association (NVCA) Washington, DC | San Francisco, CA | Palo Alto, CA nvca.org | nvca@nvca.org | 202-864-5920 NVCA Board of Directors 2019-2020 EXECUTIVE COMMITTEE JAN GARFINKLE Arboretum Ventures, Chair BARRY EGGERS Lightspeed Venture Partners, BOBBY FRANKLIN President and CEO Chair-Elect JEFF FARRAH General Counsel DENISE MARKS SV Health Investors, Treasurer JUSTIN FIELD Senior Vice President of Government ANDY SCHWAB 5AM Ventures, Secretary Affairs MICHAEL BROWN Battery Ventures, At-Large MARYAM HAQUE Senior Vice President of Industry RICH WONG Accel, At-Large Advancement, NVCA; Executive Director, Venture MAHA IBRAHIM Canaan Partners, At-Large Forward STEPHANIE VOLK Vice President of Development AT-LARGE HANNAH MUNIZZA Senior Director of Development BRUCE BOOTH Atlas Venture RHIANON ANDERSON Programs Director, Venture DIANE DAYCH Granite Growth Health Partners Forward RYAN DRANT Questa Capital ALLYSON CHAPPELL Director of Conferences & PATRICK ENRIGHT Longitude Capital Events STEVE FREDRICK Grotech Ventures CASSIE ANN HODGES Director of Communications CHRIS GIRGENTI Pritzker Group Venture Capital CHARLOTTE SAVERCOOL Director of Government JOE HOROWITZ Icon Ventures Affairs GEORGE HOYEM In-Q-Tel MICHELE SOLOMON Director of Administration CHARLES HUDSON Precursor Ventures DEVIN MILLER Manager of Communications & NAGRAJ KASHYAP M12 Digital Strategy MARK KVAMME Drive Capital JONAS MURPHY Manager of Government Affairs LISA LAMBERT National Grid Ventures EMILY VARADY Executive Assistant MOHAMAD MAKHZOUMI NEA EMILY MELTON Threshold Ventures PitchBook Data, Inc. pitchbook.com RESE ARCH reports@pitchbook.com EDITORIAL editorial@pitchbook.com SALES sales@pitchbook.com JOHN GABBERT Founder, CEO ADLEY BOWDEN Vice President, Market Development & Analysis PATRICIA NAKACHE Trinity Ventures VIC PARKER Spectrum Equity WILL PRICE Next Frontier Capital RENATA QUINTINI Lux Capital SCOTT RANEY Redpoint Ventures GLENN RIEGER NewSpring Capital PHIL SANDERSON Griffin Gaming Partners DANA SETTLE Greycroft JOHN SOMORJAI Salesforce Ventures JENNIFER TEGAN Cayuga Venture Fund NICOLE WALKER Baird Capital DAVID YORK Top Tier Capital Partners DATA AND DESIGN VAN LE Senior Data Analyst AMBER HENDRICKS Lead Copy Editor CAROLINE SUT TIE Junior Graphic Designer This publication has been created for the National Venture Capital Association by PitchBook Data, Inc. COPYRIGHT © 2020 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means— graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment. Data provided by Contents Dear Readers 4 Executive Summary 5-7 Venture Capital 101 8-11 The US Venture Industry At-A-Glance 12-19 Capital Commitments: Venture Fundraising 20-23 Capital Deployed: Investment into Venturebacked Companies 24-33 Exit Landscape: Venture-Backed IPOs & M&As 34-37 NVCA Decade in Review 38-40 What’s Ahead for 2020 41 2019 NVCA Public Policy Initiatives 43-44 NVCA Member Community - Diverse, Engaged, Committed 45-46 Glossary 47-58 Data Methodology 59 Geographic Definitions 60 Industry Code Definitions 61-70 3 N VC A 2020 Y E A RBOOK Data provided by Dear Readers March 2020 Dear Readers: With NVCA’s 23rd annual Yearbook, we District of Columbia, 242 metropolitan an industry that has grown larger and close the books on a vibrant decade for statistical areas, and 397 Congressional more complex. The data and analysis the US venture capital (VC) industry. Districts across the country—raised in the Yearbook unpack these trends We start a new decade of uncovering $133 billion to help build, grow, and scale for seasoned industry veterans and their businesses. At the same time, 270+ newcomers. We also offer resources on venture funds closed on $50+ billion to what VC is, how it works and why it’s deploy into promising startups. important, and a glossary of important the potential of budding entrepreneurs, innovative technologies, and the next generation of American companies that will fuel the economy of the 2020s and beyond. VC experienced an unprecedented transformation in the 2010s. The industry today looks very different than it did 10 years ago, when we were slowly recovering from the 2008 global financial crisis. We’re excited to release the 2020 NVCA Yearbook, highlighting not only important trends from the past year but also the past decade. We look at how VC has evolved, the impact it continues to have on our economy and society, Perhaps most noteworthy was the terms to reference. industry’s exit activity ending on a high The Yearbook and its supporting data note in 2019, with record IPO exit value may be accessed three ways: 1) this PDF generated from several startups that report; 2) the PDF data pack, which is received their first venture funding in available to the public; and 3) the XLS the late 2000s and early 2010s. The VC data pack, which is available only to industry ended the decade with 1,300+ NVCA members. We hope you find this active institutional venture investors industry resource helpful and encourage managing a total of $444 billion in VC you to share your feedback with us. We assets. thank all of our NVCA members whose On the surface, the trends in US VC assets under management, active support makes resources like these and our advocacy efforts possible! investors, fundraising, investments, Here’s to another vibrant decade of VC and the role of NVCA in the venture and exits are all “up and to the right,” activity! ecosystem. but there’s more nuance that reflects Critical to the growth and health of VC is public policy that encourages new company formation and makes the US the most attractive place to start and grow a business. 2019 proved an important year for NVCA’s advocacy on foreign investment legislation, capital markets reform, high-skilled immigration, and new regulatory proposals. Against the backdrop of several critical public policy debates in Washington, the VC industry surged in the latter half Bobby Franklin President and CEO Washington, DC bfranklin@nvca.org of the decade. In the last year of the 2010s, more than 10,000 venture-backed companies—across 50 states and the 4 N VC A 2020 Y E A RBOOK Maryam Haque Senior Vice President of Industry Advancement, NVCA Executive Director, Venture Forward San Francisco, CA mhaque@nvca.org Data provided by Executive Summary The US venture capital (VC) industry ended the decade on a high note in 2019. For the second consecutive year, high-growth startups raised more than $130 billion, and 2019 represented the second year on record (after 2015) where more than 10,000 venture-backed companies received an investment. From 2010 to 2019, investors deployed $761 billion into 87,000+ venture-backed companies across 94,000+ financings to start, build, and grow their businesses across the country. The VC industry grew steadily over the decade. At the end of 2019, there were 1,328 venture firms in existence, managing 2,211 active venture funds and translating to approximately $444 billion in US venture capital assets under management. Compared to 2010, this represents a growth of: 65% in number of firms, 73% in venture funds, and 87% in VC assets under management. As the numbers of venture firms, startups, and available capital expanded in 2019, so did the prevalence of mega-funds and megadeals, most of which have been concentrated in a few metro areas on the coasts. However, these few metro areas do not have a monopoly on talent and innovation. Startups and investors across the country continue to disrupt industries, create new sectors, and fuel the next era of transformative American companies. And investors on the coasts are taking notice. An important trend over the past decade has been the wave of new participants in the venture ecosystem. These include the surge in first-time funds raised and companies receiving their first venture investment. The industry has also seen an evolution in the investor base, with traditional venture funds now part of a broad mix of capital sources available to startups, i.e., accelerators, incubators, angel groups, corporate venture group, growth equity firms, platforms like AngelList, mutual funds, hedge funds, and sovereign wealth funds. And while the venture ecosystem still has a long way to go to demographically reflect the broader population of our country, the industry has made some progress towards lowering barriers and increasing opportunities for historically underrepresented founders and funders. The start of a new decade brings a wave of excitement to the venture industry after riding on the waves of robust activity to end the 2010s. Many of the companies that will be making headlines ten years from now for their innovation, disruption, and value creation are the ones being funded today. Highlights of the US venture ecosystem in 2019 CAPITAL COMMITMENTS TO VENTURE FUNDS (More details starting on page 20) • Venture capital investors raised $51 billion across 272 funds to deploy into promising startups, marking the fifth consecutive year of $35 billion or more raised. • 35 first-time funds raised $4.0 billion in commitments last year, both a drop from 2018’s 15-year high. • TCV’s $3.2 billion final close for its tenth fund was the largest VC fund closed last year, one of eight funds closed at $1 billion or more. • VC funds based in 26 states and the District of Columbia held final closes on venture funds in 2019, with Connecticut, Ohio, Illinois, the District of Columbia, Georgia, and Michigan seeing the biggest year-over-year absolute gains. • The overall US median VC fund size in 2019 was $80 million, the highest since 2008 and a 7% increase from 2018. • Outside of California, Massachusetts, and New York, median VC fund size reached $43 million in 2019, an increase of 57% compared to 2018, but still relatively small to the dominant venture hubs—the median for California, Massachusetts, and New York, collectively, was $100 million. 5 N VC A 2020 Y E A RBOOK Data provided by CAPITAL DEPLOYED TO STARTUPS (More details starting on page 24) • 10,430 venture-backed companies received $133 billion in funding in 2019, the second consecutive year more than $130 billion has been invested. • The 237 mega-deals (i.e., investments of $100 million+ into venture-backed companies) recorded in 2019 is the highest annual deal count on record and accounted for nearly half (40%) of total capital invested in 2019. • Unicorns (i.e., venture-backed companies valued at $1 billion+), many of which raised mega-deals, attracted $37 billion, or 27% of total capital invested, but 1.4% of the total deals completed last year. • The number of angel/seed VC investments in 2019 remained steady compared to 2018, with 4,760 deals completed representing 42% of total deals in 2019. Angel/seed deal count last year was more than 2.7x higher than in 2010. • Nearly 4,000 early-stage investments closed in 2019, representing a little over one-third of total deal count. Early-stage VC grew 1.8x in absolute terms but dropped to 34% from 39% of deal share compared with 2010. • Later-stage VC investments surged in the latter part of the decade, reaching more than 2,700 closed in 2019 and a 1.7x increase compared with 2010. Last year, later-stage deals comprised about one-quarter of total deal count. • The number of first-time financings (i.e., first round of equity funding in a startup by an institutional venture investor) spiked in the middle of the decade and returned to pre-2012 levels in 2019. 2,729 companies raised first-time funding and attracted $11.3 billion, the second highest annual amount of capital invested on record. • The software sector’s dominance continued in 2019. The life sciences sector has also seen significant growth, with more than $22 billion invested across 1,487 companies in 2019, accounting for 17% of total capital invested and 14% of total deal count last year. On a relative basis, both of these metrics are a decline compared with 2010. However, on an absolute basis, 2019 life science dollars invested and deal count were 2.9x and 1.7x higher, respectively, than 2010. • 2019 marked the seventh consecutive year where more than 1,200 venture investments involved corporate venture capital (CVC) participation. In 2019, 24% of all VC deals involved CVC. • Momentum for growth equity* investment continued in 2019 and grew rapidly over the decade. Investors deployed $66 billion across 1,217 growth equity investments last year, compared with $19.5 billion deployed across 551 deals in 2010. • Venture funding reached startups in all 50 states and the District of Columbia, 242 Metropolitan Statistical Areas (MSAs), and 397 Congressional Districts. Buffalo, NY, Boise City, ID, and Richmond, VA saw the biggest growth rate** for annual number of VC investments over the past five years (for those MSAs with at least 15 in 2019). Bend, OR, Rochester, NY, and Grand Rapids, MI saw the largest annual growth for VC investment over the past five years (for those MSAs with at least $10 million VC investment in 2014 and 2019). • Startups that were venture-backed in 2019 represented approximately 2.27 million*** employees. • Globally, $257 billion was invested across 23,000+ deals in 2019. The US represented 52% and 49% of the global total, respectively. In 2010, the US accounted for 67% of global VC dollars and 61% of global VC deal count. 6 N VC A 2020 Y E A RBOOK Data provided by EXIT LANDSCAPE (More details starting on page 34) • Venture-backed exit activity was the big story for VC in 2019, a record year for exit value following a buildup of large, latestage companies in the private markets. • The 82 venture-backed IPOs representing $199 billion in exit value in 2019 marked the highest annual exit value on record. • Venture-backed companies accounted for 43% of all US IPOs in 2019. • Mergers and acquisitions (M&As) remained strong in the second half of the decade, with six straight years of $40 billion+ in disclosed exit value. In 2019, 836 M&As (219 with disclosed values) represented a total of $61.4 billion in disclosed exit value, a 6% decrease year-over-year. • 36 late-stage companies, many of them unicorns, held exits in 2019 for an aggregate exit value of $208 billion, both metrics representing record highs. While investors and entrepreneurs had a busy 2019, NVCA led the charge in Washington, DC on several important public policy issues affecting the ecosystem (see page 43). NVCA also delivered on its mission to arm the venture community for success, serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. Our “Decade in Review” starting on page 38 highlights several of these in 2019 and over the past ten years. *Growth equity is not included as a subset of overall VC data in this publication, but is rather its own unique dataset. More details on the methodology are on page [33]. **Calculated as compound annual growth rate. ***Based on PitchBook’s custom estimation methodology for number of employees at venture-backed companies in the US. Data is as of early November 2019. Note to readers: Figures for prior years throughout this edition of the Yearbook may be different from last year’s edition due to new and updated information. 7 N VC A 2020 Y E A RBOOK Data provided by Venture Capital 101 This section offers an overview of what venture capital is, the impact this unique form of financing has had on our economy and society, and why it is important for the future. Risk Capital for HighGrowth Businesses Venture capital is unique as an institutional investor asset class. Venture capital funds make equity investments in a company whose stock is essentially Venture capital firms are professional, illiquid and worthless until a company institutional managers of risk capital Venture capital has enabled the United States to support its entrepreneurial talent by turning ideas and basic research into products and services that have transformed the world. Venture capital funds build companies from the simplest form—perhaps just the entrepreneur and an idea expressed as a matures five to eight years down the that enable and support the most road. Follow-on investment provides innovative and promising companies. Venture capital supports new ideas that 1) could not be financed with traditional bank financing; 2) threaten established products and services in a corporation or industry; and 3) typically require five to eight years (or longer!) to reach maturity. business plan—to freestanding, mature additional funding as the company grows. These “rounds”, typically occurring every year or two, are also based on equity in the company, with the shares allocated among the investors and management team based on an agreed “valuation.” However, unless a company is acquired or goes public, there is little actual value. organizations. Venture capital is a long-term investment. Venture Capital Plays a Vital Role in a Startup’s Growth Company Development Investment Stages Concept, business planning Idea/Startup Development Growth Maturity Seed/Angel Early Stage VC Late Stage VC Exit Product development Operational, rollout Growth Expansion Time Cash flow Sources of funding: VCs, angel investors, incubators, accelerators, strategic investors (corporate groups), growth equity investors, private equity firms, debt investors 8 N VC A 2020 Y E A RBOOK Data provided by Venture Investors Partner with Entrepreneurs The US venture industry provides the capital to create some of the most innovative and successful companies. However, venture capital is more than money. A venture capital professional’s most precious asset is time. According to year. Team, business model, product, a board seat at the company, and market, valuation, fit, ability to add hiring employees. With a startup, daily value, and industry are all important interaction with the management team factors venture investors consider when is common. This active engagement evaluating investments into startups. with a fledgling startup is critical to the Venture capital investors are seeking company’s success and often limits the entrepreneurs who are addressing number of startups into which any single global markets, have superb scalability, fund can invest. Many one- and two- demonstrate success within a reasonable person companies have received funding, timeframe, and truly innovative. but no one- or two-person company has ever gone public! Along the way, the a 2016 study, How Do Venture Capitalists A venture capital investor’s competitive Make Decisions?,1 for every company advantage is the expertise and guidance in which a venture firm eventually they provide to the entrepreneurs in their invests, the firm considers roughly 100 portfolio. Once the investment into a potential opportunities. The same study, company has been made, venture capital which included results from a survey partners actively engage with a company, of 889 venture capital professionals providing strategic and operational at 681 firms, showed that the median guidance, connecting entrepreneurs venture firm closes about four deals per with investors and customers, taking company must recruit talent and scale up. Any venture capital investor who has had a “home-run” investment will tell you that the companies capable of breaking through the gravity were able to evolve the original business plan concept due to careful input from an experienced hand. The VC Fund Structure Venture Capital Firm (General Partners or GPs) Limited Partners (LPs, Investors) VC LP Fund manager LP LP LP Examples: public pension funds, corporate pension funds, insurance companies, high net-worth individuals, family offices, endowments, foundations, fund-of-funds, sovereign wealth funds Ownership of the fund Venture Capital Fund (Limited Partnership) Fund ownership of portfolio companies Investment into company Investment into company Investment into company Investment into company Investment into company 1 Gompers, Paul A. and Gornall, Will and Kaplan, Steven N. and Strebulaev, Ilya A., How Do Venture Capitalists Make Decisions? (August 1, 2016). Stanford University Graduate School of Business Research Paper No. 16-33; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 477/2016. Available at SSRN: https://ssrn.com/abstract=2801385 9 N VC A 2020 Y E A RBOOK Data provided by Common Structure— Unique Results While the legal and economic structures used to create a venture capital fund are similar to those used by other alternative investment asset classes, venture capital itself is unique. Typically, a venture capital firm will create a limited partnership with the investors as LPs and the firm itself as the general partner. Examples of LPs include public pension funds, corporate pension funds, insurance companies, family offices, endowments, and foundations. Each “fund,” or portfolio, is a separate partnership. A new fund is established when the venture investors have high hopes for venture capital firm obtains necessary any company getting funded, the 2016 commitments from its investors, say study How Do Venture Capitalists Make $80 million (i.e., the median size of a US Decisions? found that, on average, venture fund closed in 2019). The money 15% of a venture firm’s portfolio exits is taken from limited partners as the are through IPOs while about half are investments are made through what are through an M&A. referred to as “capital calls.” Typically, an initial funding of a company will cause the venture fund to reserve three or four times that first investment for follow-on financing. Over the next three to eight Economic Alignment of All Stakeholders—An American Success Story years, partners from the venture firm Venture capital is rare among asset works with the founding entrepreneur classes in that success is truly shared. It to grow the company. The potential is not driven by quick returns, financial payoff comes only after the company engineering, debt, or transaction is acquired or goes public. Although fees. Economic success occurs when How Venture Capital Works Fundraising Investment Company Growth Exit Returns Re-investment VCs raise capital for funds from LPs. VCs typically invest in young, high-growth companies in need of capital to scale. VCs provide active management and act as advisors & mentors, taking board seats, providing strategic advice, facilitating introductions. After about 5–10 years of creating a high-growth company, the VC exits its stake via an acquisition or IPO. IPOs have more advantages: greater capital raised, higher returns, local job creation. In addition to companies benefitting, VCs and LPs make a profit on their investment. High-quality jobs are created, more capital is available for university research, retirees have more for retirement, foundations have more resources to fund their work. The fund ends when all investments have been exited and proceeds have been distributed to LPs. LPs can then reinvest earnings in a new crop of funds. 10 N VC A 2020 Y E A RBOOK Data provided by the stock price increases above the backed companies have scaled, gone pipeline of talent, and fair and open purchase price. When a company is public, and become household names, capital markets. It is dependent upon successful and has a strong public stock and at the same time have generated investment in scientific research, offering, or is acquired, the stock price high-skilled jobs and trillions of dollars of motivated entrepreneurs, protection of of the company reflects its success. The benefit for the US economy. entrepreneur benefits from appreciated stock and stock options. The rank and file employees throughout the organization historically also do well with their stock options. The venture capital fund and its LP investors split the capital gains per a pre-agreed formula. Many college endowments, pension funds, charities, individuals, and corporations have benefited far beyond the risk-adjusted returns of the public markets. At the same time, the risk capital that fuels startups can bring benefits to local economies in the form of company growth, competitiveness, and job creation. In fact, recent studies have found that high-growth startups account for as many as 50% of gross jobs created, and an average of 2.9 million net jobs created annually between 1980 and 2010.2 The Impact of Venturebacked Companies Beyond Financial Returns While venture investing has generated A 2015 study, The Economic Impact of Venture Capital: Evidence from Public Companies, 3 analyzed the impact venture-backed companies, as a subset of all US public companies founded between 1974 and 2015, have had on the economy. The study found that of the 1,339 US companies that went public in that period, 556 (or 42%) are venturebacked. These 556 companies represent 63% of the market capitalization and 85% of total research and development. At the end of 2019, venture-backed companies accounted for the five largest publicly traded companies by market capitalization in the US: Apple ($1.29 trillion), Microsoft ($1.20 trillion), Alphabet ($920.3 billion), Amazon ($920.2 billion), and Facebook ($585 billion).4 intellectual property, a skilled workforce, and public policies that encourage new company formation. The nascent deployment of venture capital in some countries is gated by a country’s or region’s cultural fit, tolerance for failure, services infrastructure that supports developing companies, intellectual property protection, efficient capital markets, and the willingness of big business to purchase from small companies. Venture capital investing is now global. While the US historically has been a stronghold of global venture capital activity, the rest of the world has been catching up. In the 1990s, US-based startups attracted more than 90% of annual global venture capital dollars invested. Today, US-based startups account for about half of global venture capital dollars invested. It’s important Furthermore, recent research released by Silicon Valley Bank found that 42% of FDA-approved US drugs between 2009 and 2018 originated with venture capital funding.5 What’s Ahead billions of dollars for investors and their Much of venture capital’s success has institutions and created millions of jobs come from the vibrant entrepreneurial over the years, the economic impact of spirit in the US, financial recognition venture-backed companies has been of success, access to good science, a to note that global investment has grown over that time, i.e., the US decline in global market share is on relative terms, not by absolute dollars. However, with global competition increasing for innovation and talent, empowering high-growth startups and ensuring the US is the most attractive place to start a company are critical to the continued success of our country’s entrepreneurial ecosystem. even more far-reaching. Many venture- 2 Kauffman Foundation, The Economic Impact of High-Growth Startups (January 7, 2016). https://www.kauffman.org/-/media/kauffman_org/resources/2016/ entrepreneurship-policy-digest/pd_highgrowth060716.pdf and Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda. 2014. “The Role of Entrepreneurship in US Job Creation and Economic Dynamism.” Journal of Economic Perspectives, 28 (3): 3-24. https://www.aeaweb.org/articles?id=10.1257/ jep.28.3.3 3 Gornall, Will and Strebulaev, Ilya A., The Economic Impact of Venture Capital: Evidence from Public Companies (November 1, 2015). Stanford University Graduate School of Business Research Paper No. 15-55. Available at SSRN: https://ssrn.com/abstract=2681841 or http://dx.doi.org/10.2139/ssrn.2681841 4 Source: YCharts data as of December 31, 2019. 5 Silicon Valley Bank, “Trends in Healthcare Investments and Exits 2019” (Mid-year report 2019) https://www.svb.com/globalassets/library/managedassets/pdfs/ healthcare-report-2019-midyear.pdf 11 N VC A 2020 Y E A RBOOK Data provided by At-A-Glance: The US Venture Industry in the number of venture investors and VC AUM Summary Statistics 2007 2013 2019 # of VC Firms in Existence 946 917 1,328 end of 2019, 1,328 venture firms were # of VC Funds in Existence 1,586 1,422 2,211 in existence (i.e., those who have raised # of First-time VC Funds Raised 31 23 35 # of VC Funds Raising Money This Year 187 215 272 funds and had approximately $444 VC Capital Raised This Year ($B) $35.1 $20.4 $50.5 billion in US venture capital assets under VC AUM ($B) $221.6 $257.6 $444.3 management (AUM) and $121 billion in Avg VC AUM Per Firm ($M) $221.6 $255.1 $337.9 Avg VC Fund Size to Date ($M) $128.1 $131.0 $138.4 Avg VC Fund Size Raised This Year ($M) $213.0 $102.4 $189.3 Median VC AUM Per Firm ($M) $66.5 $70.2 $77.7 The industry’s latest AUM and dry Median VC Fund Size to Date ($M) $55.0 $52.0 $50.0 powder figures are both record highs and Median VC Fund Size Raised This Year ($M) $133.0 $37.5 $80.0 Largest VC Fund Raised to Date ($M) $3,000.0 $1,100.0 $3,200.0 increase in VC AUM from 2018 to 2019. cap a decade where venture funds closed an aggregate of about $350 billion. From where the decade started with about $230 billion in VC AUM at the end of 2009, 2019’s VC AUM nearly doubled and Source: NVCA 2020 Yearbook, Data Provided by PitchBook Note: The number of firms in existence is based on a rolling count of firms that raised a fund in the last eight vintage years. The number of VC funds in existence is based on a rolling count of funds that have closed in the last eight vintage years. AUM is calculated by adding together a firm’s total remaining value and their total dry powder. had an annual growth rate* of 7%. US Venture Capital AUM by Year VC assets remain geographically $500 concentrated in three states—the $450 dominant hubs for venture activity— $400 $0 $257.6 $50 $248.5 $100 $253.2 $150 $237.0 increases of 7%, 1%, and 1%, respectively. $200 $229.1 New York saw slight year-over-year AUM $250 $227.7 2018. California, Massachusetts, and $300 $221.6 of total US VC AUM in 2019, on par with $350 $198.5 These three states together made up 84% $170.6 California, Massachusetts, and New York. $425.1 Elevated fundraising levels the past two years yielded a 5% year-over-year $347.1 dry powder at the end of 2019. $334.4 a fund in the last eight years). These 1,328 firms managed 2,211 venture $315.6 managed by the venture industry. At the $285.5 venture funds and the amount of assets $444.3 2019 bookended a decade of growth 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 12 N VC A 2020 Y E A RBOOK Data provided by Iowa, Ohio, the District of Columbia, The median venture firm size was $78 and Minnesota were among the states million in 2019. While VC AUM has 1,012. with the highest year-over-year VC grown and mega-funds have become AUM increases. At the end of 2019, 28 more prevalent, most firms (755 firms or The US share of global fundraising has states had more than $100 million in 56% of firms) managed less than $100 AUM. States that saw the largest annual million at the end of 2019, and 92 firms growth rate* in VC AUM over the decade managed $1 billion+. were Montana, Arizona, North Dakota, Delaware, and Nebraska. However, it’s important to note that VC assets by a firm’s headquarter state oftentimes is not the most telling since firms frequently invest in companies outside their state, as noted on the charts on page 28. remained steady, accounting for 67% of total funds raised. US companies gained ground on global investment, accounting for 52% of VC dollars in 2019. However, this is a marked difference from the In 2019, 7,958 active investors (all types 84% share of global investment the US and headquartered globally) made one accounted for in 2004 and has rapidly or more investment in US companies, a declined. Exit activity yielded the biggest steady decline after peaking in 2015. change in the US global market share Active US-based VC investors also after a record year of exits—78% of continued to dip (2,279 in 2019) after global venture-backed exit value in 2019 peaking in 2017, while US VC investors came from US companies. making first round investments fell to *Calculated as compound annual growth rate. Fund and Firm Analysis Total Cumulative Funds Total Cumulative Firms 2005 2,520 1,066 2006 2,715 2007 Total Cumulative Capital ($B) Existing Funds Firms That Raised Funds in the Last 8 Vintage Years $281.7 1,655 931 $170.6 $148.1 $180.8 $60.0 $60.4 1,127 $313.0 1,672 960 $198.5 $188.4 $202.4 $92.0 $60.0 2,902 1,180 $348.1 1,586 946 $221.6 $213.0 $221.6 $133.0 $66.5 2008 3,096 1,238 $380.2 1,388 843 $227.7 $182.3 $225.4 $84.5 $65.1 2009 3,218 1,279 $393.3 1,264 788 $229.1 $121.2 $223.6 $50.0 $68.5 2010 3,368 1,344 $412.3 1,281 805 $237.0 $138.6 $242.3 $50.0 $75.7 2011 3,522 1,406 $435.6 1,330 830 $253.2 $163.4 $262.6 $45.6 $79.7 2012 3,727 1,496 $460.3 1,378 872 $248.5 $130.6 $250.6 $26.3 $66.6 2013 3,942 1,591 $480.7 1,422 917 $257.6 $102.4 $255.1 $37.5 $70.2 2014 4,235 1,727 $515.6 1,520 981 $285.5 $129.7 $261.3 $30.0 $60.5 2015 4,549 1,853 $552.9 1,647 1,041 $315.6 $126.7 $258.8 $33.5 $55.2 2016 4,877 1,987 $595.6 1,781 1,094 $334.4 $142.1 $265.9 $50.0 $53.9 2017 5,157 2,132 $631.6 1,939 1,200 $347.1 $137.9 $272.3 $47.5 $59.4 2018 5,461 2,271 $689.7 2,093 1,284 $425.1 $203.3 $334.0 $74.9 $71.7 2019 5,733 2,371 $740.2 2,211 1,328 $444.3 $189.3 $337.9 $80.0 $77.7 AUM ($B) Average Fund Size ($M) Average Commitments + NAV ($M) Median Fund Size ($M) Median Commitments + NAV ($M) Source: NVCA 2020 Yearbook, Data Provided by PitchBook *Defined as Commitments + Net Asset Value 13 N VC A 2020 Y E A RBOOK Data provided by Number of Active Investors (#) # of Active Investors # of # of Active 1st Round Investors Active # of Life Active VC Science Investors Investors # of # of Active VC 1st Round Investors # of # of Active # of VC Life Active US Science Investors Investors Active Active US 1st Round Investors US Life Science Investors # of Active US VC Investors # of # of Active US Active US VC 1st VC Life Round Science Investors Investors 2005 2,536 1,020 818 1,284 564 473 1,851 814 572 1,034 491 367 2006 2,785 1,262 840 1,375 693 497 2,031 970 635 1,082 561 399 2007 3,358 1,478 977 1,563 743 548 2,415 1,134 725 1,244 629 445 2008 3,573 1,478 976 1,631 725 552 2,562 1,136 758 1,287 598 444 2009 3,063 1,281 870 1,433 582 499 2,208 986 667 1,114 500 404 2010 3,552 1,648 830 1,576 700 484 2,558 1,256 649 1,242 589 408 2011 4,592 2,352 879 1,809 894 504 3,092 1,652 714 1,406 741 429 2012 5,734 2,934 1,010 2,060 1,022 535 3,594 1,959 782 1,592 839 445 2013 7,306 3,432 1,126 2,330 1,072 586 4,046 1,990 848 1,740 859 482 2014 9,429 3,848 1,359 2,703 1,196 622 4,646 2,115 935 2,001 973 494 2015 10,278 3,789 1,610 2,957 1,252 726 4,805 1,995 1,063 2,146 1,002 579 2016 8,676 2,864 1,264 3,128 1,261 672 4,475 1,659 888 2,224 1,019 531 2017 8,512 2,829 1,558 3,369 1,444 849 4,436 1,689 1,048 2,377 1,155 640 2018 8,608 2,814 1,737 3,600 1,508 942 4,421 1,672 1,129 2,388 1,129 687 2019 7,958 2,477 1,497 3,453 1,319 833 4,213 1,500 987 2,279 1,012 604 *VC investors include entities with primary investor type as: Venture Capital, Corporate Venture Capital, or Not-forprofit Venture Capital *VC investors are headquartered globally, but only counted if they invested in a US company Source: NVCA 2020 Yearbook, Data Provided by PitchBook US as a % of Global VC Deal Flow by Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Global Deal Value ($B) $47.6 $49.8 $37.0 $47.2 $66.0 $62.0 $71.4 $114.8 $158.1 $161.8 $183.9 $308.5 $257.3 US Deal Value ($B) $37.9 $36.9 $27.5 $31.6 $44.8 $41.3 $47.7 $72.3 $83.5 $78.1 $87.1 $141.8 $133.4 Global Deal Value (#) 6,499 7,218 6,988 8,943 11,381 13,604 16,785 20,212 22,481 21,286 21,952 23,726 23,268 US Deal Value (#) 4,338 4,772 4,546 5,463 6,822 7,958 9,413 10,720 11,073 9,694 10,392 10,648 11,359 US as % of Global ($) 79.6% 74.0% 74.2% 66.9% 67.9% 66.6% 66.8% 62.9% 52.8% 48.3% 47.4% 46.0% 51.9% US as % of Global (#) 66.7% 66.1% 65.1% 61.1% 59.9% 58.5% 56.1% 53.0% 49.3% 45.5% 47.3% 44.9% 48.8% Source: NVCA 2020 Yearbook, Data Provided by PitchBook 14 N VC A 2020 Y E A RBOOK Data provided by Active Investor Count in 2019 Deals by HQ State 118 1 7 24 1 5 19 - 28 91 26 106 4 63 30 28 36 28 1 21 9 1,473 43 7 - 126 18 3 51 1 11 25 40 22 6 3 265 19 7 5 10 525 32 1 2- 3 33 5 0 53 4 Source: NVCA 2020 Yearbook, Data Provided by PitchBook US as a % of Global VC Exits by Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Global Exit Value ($B) $84.0 $25.3 $35.2 $66.1 $95.0 $133.2 $101.0 $203.0 $122.5 $113.2 $157.2 $394.5 $332.7 US Exit Value ($B) $57.1 $17.4 $21.5 $41.4 $66.7 $124.4 $72.3 $111.6 $75.6 $73.3 $97.8 $130.3 $260.6 Global Exit Value (#) 1,075 837 793 1,196 1,260 1,428 1,549 1,959 2,007 1,825 1,849 1,837 1,719 US Exit Value (#) 627 493 480 707 739 868 906 1,081 1,030 908 929 1,022 918 US as % of Global ($) 68.0% 68.8% 61.3% 62.7% 70.2% 93.4% 71.6% 55.0% 61.7% 64.7% 62.2% 33.0% 78.3% US as % of Global (#) 58.3% 58.9% 60.5% 59.1% 58.7% 60.8% 58.5% 55.2% 51.3% 49.8% 50.2% 55.6% 53.4% Source: NVCA 2020 Yearbook, Data Provided by PitchBook 15 N VC A 2020 Y E A RBOOK Data provided by Active Investor Count in 2019 Deals by Investor HQ State 56 1 2 19 2 12 2 3 23 2 55 9 40 27 24 7 909 37 17 1 35 7 - 79 14 3 24 1 6 11 25 5 2 19 5 151 20 8 99 17 359 34 5 7 1- 1 30 3 0 48 0 Source: NVCA 2020 Yearbook, Data Provided by PitchBook Note: This map breaks out the 2,113 active VC investors by their HQ state. Note that active VC investors headquartered outside of the US are not included in this map. US as a % of Global VC Fundraising by Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $53.6 $52.4 $24.3 $35.3 $45.8 $39.5 $40.4 $52.2 $74.6 $72.8 $59.0 $87.0 $75.1 $35.1 $32.1 $13.1 $19.0 $23.4 $24.7 $20.4 $34.9 $37.4 $42.6 $36.0 $58.1 $50.5 413 447 341 398 434 432 394 490 522 534 466 460 432 US Capital Raised (#) 187 194 122 150 154 205 215 293 314 328 280 304 272 US as % of Global ($) 65.6% 61.2% 53.8% 53.9% 51.1% 62.5% 50.4% 66.8% 50.1% 58.6% 61.0% 66.8% 67.3% US as % of Global (#) 45.3% 43.4% 35.8% 37.7% 35.5% 47.5% 54.6% 59.8% 60.2% 61.4% 60.1% 66.1% 63.0% Global Capital Raised ($B) US Capital Raised ($B) Global Capital Raised (#) Source: NVCA 2020 Yearbook, Data Provided by PitchBook 16 N VC A 2020 Y E A RBOOK Data provided by AUM by State in 2019 $7.3B $99.1M $71.6M $68.8M $50.0M $1.1B $31.9M $244.1M $46.2M - - $2.3B $9.7B $2.7B $3.6B $57.1B $92.1M $88.4M $84.0M $208.7M $1.3B $45.9M $3.2B $172.3M $3.1B - $1.6B $2.9B $52.7M $257.7B $1.3B $704.4M $1.3M $5.6B $3.3B $71.6M $760.8M $7.4B $1.4M $17.7M $11.3M $60.2B $34.95M - $46.2M $0.2B $0.5B $222.3M $1.9B $0.9M Source: NVCA 2020 Yearbook, Data Provided by PitchBook Top 5 States by AUM in 2019 ($B) AUM California $257.7 Massachusetts $60.2 New York $57.1 Distribution of Firms by AUM in 2019 350 294 300 250 236 200 177 166 176 150 121 100 Illinois $9.7 District of Columbia $7.4 Total $444.3 75 92 50 0 $0M$10M $10M$25M $25M$50M $50M$100M $100M$250M $250M$500M $500M$1B $1B+ Source: NVCA 2020 Yearbook, Data Provided by PitchBook Source: NVCA 2020 Yearbook, Data Provided by PitchBook 17 N VC A 2020 Y E A RBOOK Data provided by AUM by Year by State ($M) 2005 2006 2007 2008 2009 2010 2011 2012 Alabama $166.9 $184.0 $175.2 $176.8 $169.4 $171.4 $160.6 $143.8 Arizona $90.2 $90.9 $81.5 $71.7 $65.7 $51.8 $93.5 $129.2 Arkansas - - - - - - - - California $80,896.3 $95,485.7 $103,514.5 $109,986.4 $112,552.2 $117,765.0 $126,467.8 $125,427.6 Colorado $1,255.2 $1,171.6 $1,733.9 $1,656.6 $1,559.0 $1,950.7 $1,894.5 $1,742.6 Connecticut $7,054.0 $9,647.5 $10,111.2 $9,049.0 $9,137.4 $9,431.1 $9,064.3 $9,058.6 Delaware $6.6 $25.2 $18.0 $12.7 $11.5 $11.7 $11.7 $15.7 District of Columbia $1,459.7 $1,593.8 $2,483.7 $2,488.8 $2,297.0 $2,112.4 $2,616.6 $2,449.7 Florida $1,664.3 $1,638.4 $1,865.2 $1,935.4 $1,844.6 $1,807.2 $1,767.7 $2,162.6 Georgia $1,387.5 $1,510.3 $1,779.8 $1,627.8 $1,625.2 $1,785.8 $1,779.0 $1,610.7 Hawaii $11.5 $11.7 $11.6 $11.3 $11.3 $11.8 $12.0 $8.5 Idaho $22.0 $21.6 $93.9 $81.7 $78.9 $94.8 $96.2 $92.1 Illinois $3,080.6 $3,745.2 $4,195.0 $4,391.5 $4,229.4 $4,598.7 $5,442.3 $5,247.3 Indiana $321.3 $309.2 $289.4 $244.3 $226.2 $221.8 $205.6 $189.2 Iowa $28.7 $28.2 $26.3 $22.3 $18.8 $16.8 $14.9 $16.8 Kansas $3.3 $6.1 $2.5 - - - $2.7 $2.5 Kentucky $147.4 $352.7 $341.8 $320.4 $294.0 $279.8 $300.6 $276.2 Louisiana $542.5 $631.0 $627.4 $649.7 $691.2 $750.4 $693.1 $627.6 Maine $258.1 $251.3 $301.2 $271.6 $264.2 $284.6 $311.6 $263.0 Maryland $1,868.3 $2,169.3 $2,472.4 $2,134.8 $1,986.0 $1,777.3 $1,568.8 $1,506.3 Massachusetts $29,843.8 $32,960.6 $38,323.2 $37,048.7 $37,114.7 $38,704.1 $41,193.2 $39,174.4 Michigan $370.0 $365.3 $420.5 $1,310.2 $1,456.8 $1,468.6 $1,669.7 $1,568.2 Minnesota $1,180.6 $1,572.3 $2,061.0 $2,112.0 $1,913.8 $1,806.2 $1,685.5 $1,814.4 Missouri $1,252.8 $1,265.9 $1,508.1 $1,365.9 $1,293.5 $1,254.1 $1,297.1 $1,092.7 Montana - $1.7 $1.7 $1.7 $1.5 $1.6 $1.6 $1.5 Nebraska $25.7 $22.7 $21.2 $16.2 $14.6 $16.1 $51.8 $40.1 Nevada $48.8 $44.4 $43.7 $33.3 $30.6 $26.6 $21.3 $60.4 New Hampshire $14.2 $63.4 $63.0 $60.2 $53.1 $51.7 $51.8 $48.1 New Jersey $3,792.0 $5,216.9 $5,886.7 $5,183.6 $5,368.3 $5,135.1 $5,068.2 $4,900.1 New Mexico $98.1 $123.0 $105.7 $99.1 $99.1 $93.0 $66.7 $46.8 New York $15,570.5 $18,069.5 $20,809.3 $19,553.9 $19,266.3 $20,392.3 $24,265.0 $24,963.9 North Carolina $1,094.0 $1,434.2 $1,410.9 $1,379.6 $1,284.0 $1,213.7 $1,020.3 $1,069.6 North Dakota - - - $10.6 $10.4 $10.5 $10.7 $10.5 Ohio $1,040.2 $1,143.8 $1,217.8 $1,217.2 $1,184.0 $1,235.6 $1,267.4 $1,414.5 Oklahoma $45.2 $70.0 $68.4 $51.4 $47.7 $41.8 $27.1 $13.9 Oregon $95.6 $88.1 $82.0 $66.6 $61.9 $72.8 $68.6 $68.9 Pennsylvania $2,911.5 $3,227.6 $3,483.4 $3,645.1 $3,914.1 $4,059.1 $3,970.2 $3,668.4 Rhode Island - - - - - - - - South Carolina - - - - - - - - South Dakota $10.3 $9.9 $9.1 $40.5 $39.2 $54.8 $54.6 $54.4 Tennessee $629.1 $662.6 $688.9 $645.4 $611.0 $615.2 $552.0 $625.4 Texas $5,881.4 $5,968.5 $5,800.0 $6,021.9 $5,670.7 $5,596.5 $6,347.3 $5,493.9 Utah $400.1 $529.1 $850.4 $928.5 $1,045.9 $1,025.7 $1,237.7 $1,217.2 Vermont $12.8 $12.5 $11.7 $23.5 $21.5 $25.7 $25.0 $24.5 Virginia $2,175.5 $2,566.8 $2,722.3 $3,374.3 $3,346.4 $3,251.9 $3,328.2 $3,216.0 Washington $3,713.8 $3,954.0 $5,661.4 $8,104.7 $7,921.0 $7,255.7 $6,908.9 $6,353.5 Wisconsin $84.0 $246.4 $244.0 $280.0 $255.3 $442.8 $475.3 $572.5 Wyoming $16.3 $14.4 $13.4 $10.3 $9.3 $8.6 $7.1 $5.8 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 18 N VC A 2020 Y E A RBOOK Data provided by 2013 2014 2015 2016 2017 2018 2019 Alabama $128.6 $123.1 $117.9 $88.8 $52.0 $57.5 $46.2 Arizona $248.2 $422.1 $448.9 $481.4 $541.8 $794.4 $704.4 Arkansas - $10.1 $9.7 $11.3 $14.0 $21.7 $17.7 California $128,696.7 $150,508.8 $168,486.9 $185,559.0 $194,904.6 $241,916.3 $257,693.1 Colorado $2,097.8 $2,122.3 $3,130.4 $2,837.0 $2,765.8 $3,514.0 $3,645.2 Connecticut $8,538.0 $8,327.6 $6,401.8 $5,516.4 $5,007.4 $4,931.5 $5,619.5 Delaware $16.4 $42.6 $44.6 $57.2 $66.2 $86.3 $71.6 District of Columbia $2,689.7 $2,494.2 $2,457.5 $2,956.1 $5,106.0 $5,545.2 $7,431.7 Florida $2,081.8 $2,302.4 $2,358.3 $2,623.8 $2,675.6 $2,728.1 $1,902.7 Georgia $1,583.4 $1,497.5 $1,608.5 $1,435.0 $1,436.9 $1,586.1 $1,506.0 Hawaii $9.8 $8.0 $7.2 $5.8 $1.3 $0.9 $0.9 Idaho $103.2 $85.8 $73.7 $83.8 $119.4 $47.7 $46.2 Illinois $5,284.2 $6,095.4 $6,340.1 $6,505.9 $7,097.4 $9,136.8 $9,739.4 Indiana $179.6 $117.4 $110.8 $78.9 $40.8 $181.9 $172.3 Iowa $18.7 $5.0 $5.8 $5.5 $6.6 $7.4 $92.1 Kansas $2.7 $3.0 $3.3 $3.7 $3.3 $49.2 $45.9 Kentucky $277.5 $224.2 $238.5 $188.8 $156.6 $150.8 $52.7 Louisiana $655.2 $673.8 $629.8 $519.5 $324.5 $252.7 $222.3 Maine $301.4 $224.6 $336.0 $296.9 $206.4 $233.2 $208.7 Maryland $1,545.0 $1,428.0 $1,307.6 $1,032.4 $769.1 $906.2 $760.8 Massachusetts $42,043.6 $41,765.7 $46,173.1 $48,804.3 $48,792.8 $59,604.0 $60,230.0 Michigan $1,751.5 $1,774.3 $1,856.7 $2,016.6 $1,983.7 $2,072.9 $2,255.9 Minnesota $1,779.7 $1,889.8 $1,524.9 $1,123.4 $1,061.7 $866.7 $1,134.8 Missouri $1,285.8 $981.4 $1,041.3 $1,118.3 $1,296.6 $1,689.7 $1,574.9 Montana $1.5 $4.3 $4.1 $26.0 $28.3 $72.3 $71.6 Nebraska $41.8 $45.8 $50.3 $87.1 $82.8 $88.0 $88.4 Nevada $50.1 $53.2 $62.2 $55.2 $78.8 $85.6 $84.0 New Hampshire $50.2 $48.7 $50.0 $40.8 $40.4 $95.2 $68.8 New Jersey $4,926.4 $4,722.4 $4,828.8 $4,367.7 $3,671.0 $3,565.6 $3,335.7 New Mexico $48.2 $42.1 $42.3 $34.5 $32.5 $14.9 $11.3 New York $26,977.5 $33,234.8 $40,197.8 $40,967.0 $43,745.7 $56,343.3 $57,073.2 North Carolina $1,141.2 $1,070.9 $1,083.0 $1,206.5 $1,333.2 $1,295.2 $1,375.1 North Dakota $54.3 $62.4 $66.9 $67.6 $67.0 $77.3 $99.1 Ohio $1,651.4 $1,696.8 $1,782.0 $2,048.5 $2,064.5 $2,233.6 $3,097.3 Oklahoma $13.3 $12.8 $12.4 $9.6 $8.7 $6.3 - Oregon $97.8 $119.7 $131.5 $151.4 $168.2 $249.1 $244.1 Pennsylvania $3,602.6 $3,989.9 $4,196.1 $3,630.2 $3,281.9 $3,518.5 $3,233.7 Rhode Island - - - - - $1.4 $1.3 South Carolina $5.9 $12.4 $13.0 $13.4 $20.6 $27.7 $34.9 South Dakota $54.8 $67.0 $59.3 $55.1 $43.7 $32.0 $31.9 Tennessee $764.9 $808.9 $885.2 $1,177.9 $1,313.0 $1,274.9 $1,303.5 Texas $5,409.8 $4,680.3 $4,461.8 $4,378.2 $3,953.9 $5,024.4 $4,802.1 Utah $1,452.5 $1,705.4 $2,165.5 $2,335.3 $2,398.2 $2,773.4 $2,732.6 Vermont $24.7 $35.5 $31.4 $44.4 $45.0 $52.8 $50.0 Virginia $2,848.9 $3,509.4 $3,419.1 $2,840.6 $2,796.5 $3,281.5 $2,874.4 Washington $6,521.3 $5,616.2 $6,455.4 $6,629.7 $6,512.5 $7,376.6 $7,238.5 Wisconsin $591.8 $875.0 $840.3 $856.6 $942.6 $1,240.6 $1,300.4 Wyoming - - - - - - - Source: NVCA 2020 Yearbook, Data Provided by PitchBook 19 N VC A 2020 Y E A RBOOK Data provided by Capital Commitments: Venture Fundraising In 2019, 272 US venture capital funds closed on $50.5 billion in capital US VC Fundraising by Year commitments, representing an 11% and 293 13% year-over-year decline, respectively, compared with 2018. However, last year 171 187 205 194 Venture fund sizes remained elevated 150 154 $23.4 billion+ in fundraising. 195 $19.0 marked the sixth consecutive year of $30 314 328 280 304 272 215 122 with a median and average size of $80 accounted for 28% of total capital raised, $50.5 $58.1 $36.0 $42.6 $37.4 $34.9 $20.4 $24.7 $13.1 $32.1 $35.1 closed on $1 billion+ in 2019 and $31.3 Large funds drove this trend—8 funds $23.4 million and $189 million, respectively. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 led by TCV’s $3.2 billion tenth fund Capital Raised ($B) closed in 2019. This was lower than 10 Fund Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook funds of that size closing in 2018 and 50 First-time funds have also been an 55 47 43 42 important trend of the decade. These funds are typically created from 31 individuals who have spun out of 28 established firms, those who were 33 31 26 31 35 23 20 previously angel investors, or those who 31 $2.6 fund closed by Sequoia Capital. US VC First-time Fundraising by Year $2.2 accounting for 38% of capital that year, thanks largely to the record $8 billion seen healthy growth since then. 2018 set a record for the number of first-time funds closed and total capital raised, but $4.0 $5.4 $2.8 $2.4 $1.5 $1.7 $2.0 $0.9 $1.1 $2.3 $2.9 $3.0 companies. First-time funds dipped after the 2008 global financial crisis but have $3.3 were previously in operating roles at 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Capital Raised ($B) Fund Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook activity dipped in 2019. Last year, 35 first-time funds raised $4.0 billion. 344 first-time funds raised more than $25 billion from 2010 to 2019. The prevalence 20 N VC A 2020 Y E A RBOOK Data provided by of first-time funds, many of which are The overall US median VC fund size in Second, comparing fundraising to smaller in size, has made an impact 2019 was $80 million, the highest since investment figures in this report is on the number of players and capital 2008 and a 7% increase from 2018. not apples-to-apples. Why? 1) Firms availability at the seed and earlier stages Outside of California, Massachusetts, generally do not deploy all of their of the venture investment cycle. and New York, median VC fund size capital into startups in one year or in reached $43 million in 2019, an the year they close their fund. 2) The VC increase of 57% compared to 2018, but fundraising statistics only capture US still relatively small compared to the funds, whereas VC funds outside the VC funds based in 26 states and the District of Columbia held final closes on venture funds in 2019, with Connecticut, Ohio, Illinois, the District of Columbia, Georgia, and Michigan seeing the biggest year-over-year absolute gains. Funds based in California, New York, and Massachusetts accounted for 62%, 15%, US frequently invest in US startups. The VC investment statistics are inclusive collectively, was $100 million. of investors headquartered outside the Two important notes on the VC fundraising data: first, as mentioned in the prior section, a fund’s location doesn’t and 9%, respectively, of total capital mean the capital will only be deployed in raised in the US in 2019. Collectively, that geography. Local capital is important these three states represented 86% of total US capital raised, on par with 2018, but a noticeable jump from the 79% share in 2010. The ten largest funds closed in dominant venture hubs – the median for California, Massachusetts, and New York, to support the local ecosystem, but capital travels. Investors frequently invest in companies outside of their state. US; and 3) There are increasingly more types of investors becoming active in the venture ecosystem. Most of these investors do not invest in companies via venture funds, e.g., corporate venture groups, hedge funds, mutual funds, sovereign wealth funds, and family offices. 2019 were based in California. Top States by VC Raised in 2019 10 Largest US VC Funds in 2019 Investor Name Fund Name TCV TCV X Andreessen Andreessen Horowitz Horowitz LSV Fund I Norwest Venture Norwest Venture Partners Partners XV Founders Fund The Founders Fund VII Vivo Capital Sapphire Ventures Vivo Capital Fund IX Sapphire Ventures Fund IV Lightspeed Lightspeed Venture Venture Partners Partners Select III Bond Capital (San Francisco) Sequoia Capital Bond Capital Fund Fund Size ($M) Close Date Fund State $3,200.0 January 31, 2019 California $2,238.9 July 17, 2019 California $2,000.0 $1,496.4 $1,430.0 $1,400.0 $1,361.8 November 14, 2019 November 20, 2019 October 30, 2019 December 18, 2019 June 21, 2019 California California California California California # of Capital Raised Funds ($M) California 123 $31,513.4 Massachusetts 28 $7,515.5 New York 40 $4,583.5 Connecticut 2 $910.0 Ohio 7 $894.1 Illinois 10 $721.1 Washington 10 $689.1 Texas 9 $546.3 Pennsylvania 4 $417.0 2 $365.0 District of $1,250.0 May 1, 2019 California Columbia Source: NVCA 2020 Yearbook, Data Provided by PitchBook Sequoia Capital US Growth Fund VIII Andreessen Andreessen Horowitz Horowitz Fund VI $998.5 December 6, 2019 California $840.0 July 17, 2019 California Source: NVCA 2020 Yearbook, Data Provided by PitchBook 21 N VC A 2020 Y E A RBOOK Data provided by VC Fundraising by State by Year ($M) 2005 2006 2007 2008 2009 2010 2011 2012 Alabama $23.0 $21.9 - $25.7 - - - $5.0 Arizona - - - $20.0 - - $38.2 $56.6 Arkansas - - - - - - - - California $12,124.0 $15,409.7 $15,134.9 $17,085.0 $6,441.9 $9,657.4 $13,899.1 $14,782.1 Colorado $25.0 $22.3 $420.8 $111.9 $5.0 $328.0 - $88.7 Connecticut $795.0 $3,050.0 $45.0 $650.0 $25.0 $1,259.3 $15.0 $617.5 Delaware - $13.0 - - - $15.0 - $4.9 District of Columbia - $200.0 $828.0 $340.0 - - $450.0 $20.5 Florida $718.0 - $348.5 $164.1 $145.6 $94.0 $97.6 $268.0 Georgia $3.5 $215.0 $255.1 $138.0 $155.0 $293.2 - $50.0 Hawaii - - - $1.8 - - - - Idaho - - $75.0 - - - - - Illinois $165.5 $370.5 $818.2 $877.9 $225.0 $512.7 $738.0 $275.3 Indiana $6.0 $26.3 - - $10.0 $90.0 - $19.0 Iowa - - - - - - - $3.0 Kansas - - - - - - $2.6 - Kentucky $20.1 $36.4 - $175.0 - - - $10.7 Louisiana $73.5 $70.0 $28.0 $106.7 $70.0 $56.0 - $6.0 Maine - - $65.0 - - - - $10.1 Maryland $25.0 $327.0 $575.0 $63.3 $21.0 - - $20.0 Massachusetts $4,263.8 $4,862.8 $6,550.1 $3,332.9 $2,879.8 $2,942.5 $4,054.8 $1,854.2 Michigan - $20.0 $65.0 $910.0 $254.3 $41.4 $185.7 $45.2 Minnesota $275.0 $398.0 $331.0 $475.1 $30.0 - - $150.0 Missouri $66.0 - $210.2 $128.9 $65.0 $2.0 - $20.0 Montana - $1.8 - - - - - - Nebraska - - - - - $2.6 $37.3 $18.2 Nevada - - - - - - - $50.0 New Hampshire - $50.0 - - - - - $4.5 New Jersey $798.0 $1,063.0 $895.2 $9.0 $516.0 - $500.0 $349.0 New Mexico $47.5 $5.2 - - - - $10.0 - New York $1,839.4 $1,995.4 $5,147.2 $1,674.6 $759.6 $2,467.0 $2,484.9 $4,670.6 North Carolina $232.0 $340.0 $40.3 $83.0 $102.0 - - $2.5 North Dakota - - - $11.0 - - - - Ohio $18.9 $100.0 $15.5 $254.7 $23.7 $88.2 $86.1 $63.9 Oklahoma - $15.0 - - - - - - Oregon - - $0.9 $2.6 $3.0 $20.4 $3.4 $7.8 Pennsylvania $228.8 $397.2 $192.5 $739.6 $940.5 $129.9 $100.0 $298.0 Rhode Island - - - - - - - - South Carolina - - - - - - - - South Dakota $10.0 - - $32.5 - $16.0 - - Tennessee $83.3 $54.0 $40.0 $93.2 $14.0 $74.2 $22.0 $190.0 Texas $268.2 $892.1 $103.3 $1,221.8 $5.1 $175.5 $465.1 $31.2 Utah - $129.2 $352.0 $166.6 $122.0 $66.4 $33.0 $156.9 Vermont - - - $14.0 - $5.0 - - Virginia $564.1 $478.0 $309.8 $223.1 $274.6 $441.0 $110.0 $80.2 Washington $722.2 $538.0 $2,293.5 $2,902.9 $2.5 $5.9 - $328.2 Wisconsin $10.7 $171.5 - $57.8 - $201.5 $40.0 $116.4 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 22 N VC A 2020 Y E A RBOOK *For this table we give precedent to the fund location, but if unvailable, we use the HQ location of the firm Data provided by 2013 2014 2015 2016 2017 2018 2019 Alabama - - - - - $25.0 - Arizona $129.5 $156.9 $6.2 $28.6 - - $49.4 Arkansas - $10.0 - $1.5 - - - California $9,198.7 $21,240.6 $21,272.5 $25,852.0 $22,475.3 $33,407.0 $31,513.4 Colorado $230.5 $193.8 $640.8 $560.7 $32.0 $807.6 $166.6 Connecticut $193.1 $500.0 $1.0 $151.7 $600.0 $395.4 $910.0 Delaware - $26.0 $2.4 - - - - District of Columbia $200.0 $8.0 $60.5 $887.8 $2,398.0 $67.7 $365.0 Florida - $327.7 $184.0 $56.4 $45.5 $47.4 $35.0 Georgia $114.7 $40.3 $262.0 $53.0 $111.0 - $327.0 Hawaii - - - - - - - Idaho - - - - - - - Illinois $268.5 $500.6 $574.0 $1,584.2 $658.1 $535.9 $721.1 Indiana - $1.7 - - - $132.7 - Iowa $1.8 - - - - - $80.7 Kansas - - - $0.2 - $42.7 - Kentucky - - $5.6 - - $29.5 - Louisiana $14.2 $10.4 $11.1 - - - - Maine - - $123.0 - $11.0 - - Maryland $213.0 $82.2 $152.7 $0.8 $78.0 $69.9 - Massachusetts $5,169.0 $2,453.3 $5,441.3 $6,253.1 $5,698.3 $7,528.1 $7,515.5 Michigan $73.0 $26.3 $316.3 $407.5 $50.5 $26.7 $280.0 Minnesota $107.4 - $105.5 - $36.2 $153.2 $279.2 Missouri $320.0 $1.5 $116.7 $400.1 $108.1 $184.4 $23.5 Montana - - - $21.1 $2.8 $38.0 - Nebraska - - $0.6 - $31.0 - - Nevada - - - - $5.0 - - New Hampshire - $1.0 $7.7 - $1.7 $56.1 - New Jersey $13.0 $18.6 - $662.0 $10.0 $390.0 $277.0 New Mexico - - - - - - - New York $1,682.7 $7,271.3 $6,054.3 $3,087.3 $2,188.4 $9,265.7 $4,583.5 North Carolina $215.0 $35.6 $32.1 $205.2 $273.0 $112.6 $31.3 North Dakota $45.0 $3.5 - - - - $30.0 Ohio $104.7 $539.6 $126.7 $428.2 $32.7 $49.3 $894.1 Oklahoma - - - - - - - Oregon $15.8 $32.7 $17.5 $31.5 $16.2 $58.0 $14.0 Pennsylvania $171.6 $291.7 $235.0 $59.0 $111.7 $359.7 $417.0 Rhode Island - - - - - $1.3 - South Carolina $6.0 $6.2 - - $5.7 - $10.2 South Dakota - - - - - - - Tennessee $103.0 $2.5 - $435.0 $125.4 $8.0 $86.0 Texas $653.9 $444.0 $166.9 $224.6 $105.9 $917.8 $546.3 Utah $345.9 $150.7 $245.2 $400.6 $86.2 $187.1 $220.0 Vermont - $12.0 - - $14.0 - - Virginia $228.1 $88.8 $531.6 $180.0 $156.1 $387.6 $240.0 Washington $551.2 $190.8 $690.3 $616.9 $420.8 $2,734.6 $689.1 Wisconsin $5.1 $217.7 $0.6 $29.7 $93.9 $130.5 $227.0 Source: NVCA 2020 Yearbook, Data Provided by PitchBook *For this table we give precedent to the fund location, but if unvailable, we use the HQ location of the firm 23 N VC A 2020 Y E A RBOOK Data provided by Capital Deployed: Investment into Companies For the second consecutive year, highgrowth startups raised more than $130 US VC Deal Flow billion, and 2019 represented the second $160 year on record (after 2015) where more $140 than 10,000 venture-backed companies received an investment. From 2010 to 2019, investors deployed $761 billion across nearly 94,000 financings to start, build, and grow 87,000+ businesses across the country. 11,359 12,000 10,720 11,073 10,648 9,694 10,392 9,413 $120 7,958 8,000 6,822 $100 $80 $60 10,000 4,772 4,546 4,338 2,995 5,463 6,000 3,358 4,000 funding. Mega-deals (i.e., investments $0 of $100 million+ into venture-backed $133.4 $141.8 $87.1 $78.1 $83.5 $72.3 $47.7 $41.3 $44.8 $31.6 $27.5 $36.9 companies received $133 billion in $37.9 $20 $29.3 In 2019, 10,430 venture-backed $23.7 $40 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Deal Value ($B) Deal Count companies) accounted for 44% of total 2,000 0 Company Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook capital invested in 2019, slightly down US VC Deal Flow by Stage (#) Angel & seed Early VC Later VC 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 460 790 923 1,235 1,746 2,618 3,557 4,668 5,491 5,783 4,790 4,956 4,622 4,760 1,758 2,125 2,288 1,859 2,129 2,453 2,630 2,852 3,172 3,250 3,016 3,384 3,731 3,882 1,140 1,423 1,561 1,452 1,588 1,751 1,771 1,893 2,057 2,040 1,888 2,052 2,295 2,717 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 24 N VC A 2020 Y E A RBOOK Data provided by from 2018, but the 237-deal count was the highest on record. Many of 2019 US VC Deals by Stage ($B) these mega-deals are for unicorns (i.e., $9.6 venture-backed companies valued at $1 billion+), since they tend to be later in their growth cycle and larger companies. Late VC Unicorns attracted $37 billion, or 27% $43.2 of total capital invested, but less than Early VC 1.4% of the total deals completed in 2019. Mirroring mega-deal count, unicorn deal count (157) also hit a record high last $80.7 year. Angel & Seed Mega-deals and unicorns were much rarer in 2010, but the decade’s progression brought a new normal with increased 2.4x, and the median laterstage VC deal increased 1.8x compared with 2010. Median pre-money valuations grew by even higher multiples—Series A increased 3.7x, Series B 3.6x, Series C 4.1x, and Series D+ 5.7x. 180 $45 160 $40 140 $35 120 $30 100 $25 80 $20 60 $15 40 With the shift in deal sizes and $5 valuations, many consider a Series A $0 deal today what a seed investment was $14.4 $10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Deal Value ($B) earlier in the decade. Capital needs for starting a company, particularly in the $36.6 2.3x, the median early-stage VC deal $50 $47.0 the median angel/seed deal increased US VC Unicorn Deal Activity by Year $17.8 stages and series. By the end of 2019, $18.3 valuations, and company age across $18.4 a steady rise in deal sizes, pre-money Source: NVCA 2020 Yearbook, Data Provided by PitchBook 20 0 Deal Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook Sectors count last year. On a relative basis, both has undercut large infrastructure costs The software sector’s dominance with 2010. However, on an absolute that were once the norm. At the same continued in 2019. Last year, companies basis, 2019 life science dollars invested time, more data-centric and software/ in this sector comprised 34% of total and deal count were 2.9x and 1.7x higher, services companies have emerged, capital invested and 36% of total deal respectively, than 2010. compared to the prior era of hardware- count. This is on par with the sector’s centric business models. Furthermore, an annual share over the decade. tech sector, have significantly dropped. The prevalence of cloud-based services influx of capital available through several strong venture fundraising years—and more sources of capital from a diverse investor base across company stages— have transformed the industry. The upward trend of life sciences VC of these metrics are a decline compared Companies in the business products and services (B2B) sector took the top two spots in the ranking of largest activity continued, with more than $22 investments in 2019: The We Company’s billion invested across 1,487 companies $5 billion investment and Flexport’s $1 in 2019, accounting for 17% of total billion investment. capital invested and 14% of total deal 25 N VC A 2020 Y E A RBOOK Data provided by Investment Stages & First-time Fundings by an institutional venture investor) annual growth for VC investment over spiked in the middle of the decade and the past five years (for those MSAs with returned to pre-2012 levels in 2019. at least $10 million in VC investment in The number of angel/seed VC 2,729 companies raised first-time 2014 and 2019). investments in 2019 remained steady compared to 2018, with 4,760 deals completed representing 42% of total deals in 2019. Angel/seed deal count last year was more than 2.7x higher than in 2010. funding and attracted $11.3 billion, the second-highest annual amount of capital invested on record. Though the life sciences sector attracted 17% of overall capital invested in 2019, the sector attracted 26% of capital invested via first-time financings. Pharma & biotech Nearly 4,000 early-stage investments companies attracted $2.9 billion in closed in 2019, representing a little over first-time financings, the highest among one-third of total deal count. Early- sectors last year. stage VC grew 1.8x in absolute terms but dropped from 39% of deal share compared with 2010. Geographical Analysis Venture funding reached startups in all California, Massachusetts, and New York continued their dominance as the country’s VC hubs; however, California and Massachusetts both saw year-overyear declines in capital invested in 2019 versus 2018. Collectively, these three states accounted for 53% of total deal count and 73% of total capital invested in 2019. The share of deal count last year was on par with the start of the decade in 2010, whereas their share of total capital invested in 2010 was 64%. Globally, startups raised $257 billion Later-stage VC investments surged in the 50 states and the District of Columbia, latter part of the decade, reaching more 242 Metropolitan Statistical Areas across 23,268 deals in 2019, a 17% and than 2,700 closed in 2019 and a 1.7x (MSAs), and 397 Congressional Districts. 2% year-over-year decline, respectively. increase compared with 2010. Last year, Buffalo, NY, Boise City, ID, and Richmond, The US represented 52% and 49% of the later-stage deals comprised about one- VA saw the biggest growth rate** for global total, respectively. In 2010, the US quarter of total deal count. annual number of VC investments over accounted for 67% of global VC dollars the past five years (for those MSAs with and 61% of global VC deal count. The number of first-time financings (i.e., first round of equity funding in a startup at least 15 in 2019). Bend, OR, Rochester, NY, and Grand Rapids, MI saw the largest 2019 US VC Deals by Sector ($B) Commercial Services Consumer Goods & Recreation $14.0 $6.3 IT Hardware Media *Other industry groups below: $3.9 $2.9 Energy $1.5 Other $30.6 HC Devices & Supplies $5.7 Pharma & Biotech $16.7 Other Financial Services Commercial Transportation Other Healthcare Other Business Products and Services Consumer Durables Consumer Non-Durables Services (Non-Financial) Transportation Other Consumer Products and Services Utilities HC Services & Systems $7.1 Software $44.8 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 26 N VC A 2020 Y E A RBOOK Insurance Commercial Products Other Energy Capital Markets/Institutions Commercial Banks IT Services Other Information Technology Agriculture Chemicals and Gases Construction (Non-Wood) Containers and Packaging Forestry Metals, Minerals and Mining Textiles Other Materials Data provided by US VC Deal Flow by State in 2019 Company Count # of Deals Closed Capital Invested ($M) Alabama 29 30 $58.9 Alaska 11 13 $25.1 Arizona 116 123 $834.7 Arkansas 28 32 $71.9 California 3519 3870 $65,601.7 Colorado 361 401 $2,509.4 Connecticut 100 116 $867.8 Delaware 72 78 $249.4 District of Columbia 68 73 $464.2 Florida 255 269 $2,918.7 Georgia 153 169 $1,672.7 Hawaii 15 19 $41.8 Idaho 29 30 $86.8 Illinois 293 312 $2,213.0 Indiana 131 145 $380.8 Iowa 31 32 $41.2 Kansas 27 28 $276.1 Kentucky 34 35 $248.1 Louisiana 22 22 $130.4 Maine 27 29 $46.3 Maryland 136 146 $921.4 Massachusetts 720 773 $10,832.5 Michigan 127 140 $803.2 Minnesota 122 135 $1,217.9 Mississippi 6 7 $7.9 Missouri 67 70 $440.5 Montana 24 25 $119.0 Nebraska 31 34 $69.0 Nevada 33 34 $141.0 New Hampshire 27 29 $135.2 New Jersey 139 146 $1,271.2 New Mexico 29 30 $302.6 New York 1283 1400 $20,901.7 North Carolina 199 211 $1,218.5 North Dakota 7 7 $21.2 Ohio 139 149 $960.0 Oklahoma 16 17 $36.6 Oregon 130 141 $952.3 Pennsylvania 265 289 $2,653.1 Rhode Island 22 22 $61.6 South Carolina 55 65 $132.2 South Dakota 8 8 $9.1 Tennessee 95 107 $928.7 Texas 538 584 $3,695.4 Utah 141 150 $1,390.4 Vermont 26 29 $94.8 Virginia 194 211 $1,171.1 Washington 421 460 $3,887.8 West Virginia 1 1 $0.2 Wisconsin 63 68 $248.5 Wyoming 9 9 $8.3 Source: NVCA 2020 Yearbook, Data Provided by PitchBook Top 10 US VC Deals in 2019 Company Name The We Company Close Date January 8; October 22, 2019 Deal Size ($M) Deal Type Industry Sector State $5,000.0 Later VC B2B New York Flexport April 22, 2019 $1,000.0 Later VC B2B California Nuro February 11, 2019 $940.0 Early VC B2C California REEF Technology March 1, 2019 $900.0 Late VC IT Florida JUUL August 16, 2019 $785.2 Late VC B2C California GoPuff August 1, 2019 $750.0 Late VC B2C Pennsylvania DoorDash November 13, 2019 $700.0 Late VC B2C California Bright Health December 16, 2019 $635.0 Late VC Financial Services Minnesota Aurora Innovation February 7, 2019 $600.0 Early VC B2C California UiPath April 30, 2019 $568.0 Late VC IT New York 27 N VC A 2020 Y E A RBOOK Source: NVCA 2020 Yearbook, Data Provided by PitchBook Data provided by 2019 VC Deals & Company Counts by # of States Invested Into by Investor HQ State State Company Count % of Total Capital Invested ($M) % of Total Investor HQ State # of States Invested In 46 California 3,519 33.7% $65,601.7 49.2% California New York 1,283 12.3% $20,901.7 15.7% New York 43 Massachusetts 720 6.9% $10,832.5 8.1% Illinois 40 Washington 421 4.0% $3,887.8 2.9% Texas 538 5.2% $3,695.4 2.8% Florida 255 2.4% $2,918.7 2.2% Pennsylvania 265 2.5% $2,653.1 2.0% Colorado 361 3.5% $2,509.4 1.9% Illinois 293 2.8% $2,213.0 1.7% Georgia 153 1.5% $1,672.7 1.3% All Others 2,622 25.1% $16,535.4 12.4% Total 10,430 $133,421.5 Source: NVCA 2020 Yearbook, Data Provided by PitchBook Top 5 States by Percentage of 2019 Deals Done in State Which Featured Investor(s) from Outside State Massachusetts 35 Texas 34 District of Columbia 33 Maryland 32 Colorado 31 Florida 29 Washington 27 Georgia 26 New Jersey 26 Ohio 25 Tennessee 25 Missouri 25 Pennsylvania 23 Virginia 23 North Carolina 23 Minnesota 21 Company HQ State % Invested From Outside State Delaware 100% Michigan 21 District of Columbia 88% Utah 21 New Jersey 84% Indiana 20 Minnesota 76% Connecticut 19 64% Oregon 18 New Hampshire 17 Wisconsin 16 Kansas 15 Kentucky 14 Iowa 13 Nebraska 12 Nevada 11 10 Arizona Source: NVCA 2020 Yearbook, Data Provided by PitchBook Example of how to read this table: 88% of deals done by DC-based investors were investments into DC-based companies. *This ranking is inclusive of states with 20 or more investments Top 5 States by Percentage of 2018 Deals Done in State which Featured Investor(s) from that State Company HQ State % Invested From Within State Louisiana Nebraska 91% Arizona Connecticut 84% California 82% Indiana 81% Michigan 70% 10 Source: NVCA 2020 Yearbook, Data Provided by PitchBook # of States California Investors Invested Into by Year Source: NVCA 2020 Yearbook, Data Provided by PitchBook Example of how to read this table: 91% of investments in Nebraska-based companies featured at least one Nebraska-based investor. *This ranking is inclusive of states with 20 or more investments Year # of States Invested In 2007 37 2013 45 2019 46 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 28 N VC A 2020 Y E A RBOOK Data provided by First-time Financings US First VC & Follow-on VC Deal Flow ($B) $160 $140 $120 US VC Deal Flow by Sector: First-Round VC in 2019 # of Deals Capital Raised Closed ($M) 317 $1,097.7 161 $521.6 31 $54.0 105 $551.1 205 $538.3 IT Hardware 70 $205.8 Sector $100 Commercial $80 Services $60 Consumer Goods & $40 Recreation $20 Energy $0 HC Devices & 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 First Follow-On Supplies HC Services & Source: NVCA 2020 Yearbook, Data Provided by PitchBook Systems US First VC & Follow-on VC Deal Flow (Company Counts) Media 110 $239.9 Other 820 $2,608.1 12,000 Pharma & 208 $2,898.3 903 $2,585.9 Biotech 10,000 Software 8,000 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 6,000 4,000 2,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 First Follow-On Source: NVCA 2020 Yearbook, Data Provided by PitchBook 29 N VC A 2020 Y E A RBOOK Data provided by Life Sciences US Life Sciences VC Deal Flow 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Company Count 10 9 8 8 9 9 10 13 15 13 18 24 22 # of Deals Closed 822 881 880 964 1,055 1,098 1,174 1,242 1,351 1,213 1,414 1,500 1,603 Company Count 767 810 808 885 975 1,006 1,086 1,157 1,253 1,161 1,329 1,408 1,487 Source: NVCA 2020 Yearbook, Data Provided by PitchBook US Life Sciences VC Invested ($M) by Sector 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $1,788.6 $1,375.4 $1,980.7 $2,158.5 $2,101.8 $2,123.5 $2,506.3 $3,637.4 $5,444.3 $4,724.7 $7,700.6 $10,815.0 $10,005.9 $715.0 $762.6 $452.6 $691.4 $686.9 $615.6 $681.6 $850.4 $888.1 $740.2 $1,257.0 $1,509.0 $1,559.6 $119.6 $69.8 $113.0 $65.6 $77.7 $10.2 $88.0 $47.9 $71.6 $106.6 $62.1 $16.0 $192.0 Drug Delivery $520.8 $559.7 $182.0 $168.6 $510.7 $325.9 $363.6 $345.6 $512.2 $287.2 $440.9 $213.2 $222.3 Drug Discovery $1,457.1 $1,346.5 $1,388.0 $1,187.5 $1,336.4 $2,081.9 $2,496.7 $3,148.6 $4,120.3 $3,496.8 $3,366.8 $6,082.6 $4,640.5 Medical Supplies $235.9 $176.6 $91.6 $116.3 $160.7 $298.0 $137.2 $109.8 $66.9 $113.1 $159.0 $233.4 $183.7 $216.4 $373.4 $181.9 $183.3 $388.0 $295.9 $494.9 $1,260.2 $456.1 $443.8 $682.9 $684.4 $790.3 $258.7 $168.8 $110.3 $80.1 $213.7 $284.0 $139.6 $241.8 $235.8 $201.6 $402.2 $602.1 $346.2 $57.2 $96.0 $64.8 $126.4 $69.8 $63.9 $23.9 $49.4 $45.6 $46.7 $63.8 $284.5 $282.6 Pharmaceuticals $1,753.2 $1,583.5 $1,258.4 $976.4 $942.2 $604.4 $802.5 $608.5 $524.3 $560.4 $748.5 $1,104.3 $1,375.4 Surgical Devices $1,188.5 $1,184.7 $920.9 $972.6 $1,106.3 $927.3 $1,115.4 $1,190.0 $1,130.8 $987.0 $1,184.2 $1,081.9 $940.5 Therapeutic Devices $1,281.3 $1,644.2 $1,303.4 $1,104.9 $1,252.1 $1,130.1 $1,356.0 $1,030.6 $1,660.8 $1,142.0 $1,493.7 $1,773.9 $1,867.8 Biotechnology Diagnostic Equipment Discovery Tools (Healthcare) Monitoring Equipment Other Devices and Supplies Other Pharmaceuticals and Biotechnology Source: NVCA 2020 Yearbook, Data Provided by PitchBook 30 N VC A 2020 Y E A RBOOK Data provided by US Life Sciences VC Deal Count by Sector 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 164 166 191 219 225 269 293 330 369 363 464 476 435 99 111 89 127 121 128 117 126 140 122 123 143 156 11 10 9 10 12 7 9 9 18 13 16 13 20 Drug Delivery 31 26 21 27 33 29 26 23 32 20 32 25 40 Drug Discovery 117 126 127 137 140 149 178 195 207 167 177 220 266 Medical Supplies 31 30 33 35 39 52 44 40 34 39 33 47 54 27 32 41 45 58 68 86 92 93 96 122 111 114 28 34 47 40 63 59 61 83 80 67 85 85 67 7 13 8 16 12 15 13 15 19 15 14 26 28 Pharmaceuticals 88 85 75 80 78 63 72 59 68 69 73 81 114 Surgical Devices 92 118 105 101 122 102 107 117 117 91 103 98 112 Therapeutic Devices 127 130 134 127 152 157 168 153 174 151 172 175 197 Biotechnology Diagnostic Equipment Discovery Tools (Healthcare) Monitoring Equipment Other Devices and Supplies Other Pharmaceuticals and Biotechnology Source: NVCA 2020 Yearbook, Data Provided by PitchBook US VC Activity (#) in Life Sciences Life Sciences Deal Count Life Sciences as % of Total US VC (#) Company count 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 822 881 880 964 1,055 1,098 1,174 1,242 1,351 1,213 1,414 1,500 1,603 18.9% 18.5% 19.4% 17.6% 15.5% 13.8% 12.5% 11.6% 12.2% 12.5% 13.6% 14.1% 14.1% 767 810 808 885 975 1,006 1,086 1,157 1,253 1,161 1,329 1,408 1,487 Source: NVCA 2020 Yearbook, Data Provided by PitchBook US VC Activity ($B) in Life Sciences Life Sciences Capital Invested ($B) Life Sciences as % of Total US VC ($) Company Count 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 $9.6 $9.3 $8.0 $7.8 $8.8 $8.8 $10.2 $12.5 $15.2 $12.8 $17.6 $24.4 $22.4 25.3% 25.3% 29.3% 24.8% 19.7% 21.2% 21.4% 17.3% 18.2% 16.5% 20.2% 17.2% 16.8% 767 810 808 885 975 1,006 1,086 1,157 1,253 1,161 1,329 1,408 1,487 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 31 N VC A 2020 Y E A RBOOK Data provided by Corporate Venture Capital Activity from corporate venture capital with investors disclosed). These 1,776 also marked the seventh consecutive (CVC) investors remained elevated in investments represented an aggregate year where more than 1,200 venture 2019. CVC investors participated in 1,776 deal size (including non-CVC investors) investments involved CVC participation. venture deals last year, representing 24% of $57 billion, the second-highest annual of total VC deal count (for those VC deals amount of the past 15 years. 2019 US Corporate VC Investment by Year # of # of VC Deals All VC with CVC Deals Involvement % of VC Deals Average with CVC Deal Value Involvement (All VC, (#) $M) Average Median Deal Deal Median Deal Value Value Value (CVC, (All VC, (CVC, $M) $M) $M) Average Average Median Median Post Post Post Post Valuation Valuation Valuation Valuation (All VC, $M) (CVC, $M) (All VC, $M) (CVC, $M) Total VC Capital Raised ($M) Total CVC % of VC Deals Capital with CVC Raised Involvement ($M) ($) 2005 2,339 526 22% $9.6 $ 11.4 $6.0 $7.5 $42.4 $56.1 $23.9 $30.6 $21.0 $5.7 27% 2006 2,663 587 22% $10.7 $16.4 $6.0 $10.0 $48.2 $65.5 $24.3 $40.0 $26.4 $9.1 35% 2007 3,338 710 21% $11.2 $16.5 $5.6 $10.0 $60.7 $115.2 $24.4 $41.4 $34.3 $11.3 33% 2008 3,622 726 20% $9.9 $14.7 $5.1 $8.5 $60.3 $75.4 $23.0 $35.5 $33.0 $10.1 31% 2009 2,923 532 18% $8.8 $14.6 $4.1 $8.6 $62.0 $83.4 $19.0 $38.0 $22.9 $7.2 31% 2010 3,462 596 17% $8.4 $15.5 $3.0 $8.0 $66.6 $92.8 $18.5 $33.9 $25.6 $8.5 33% 2011 4,653 775 17% $9.5 $18.7 $2.6 $7.5 $134.5 $151.0 $18.5 $40.0 $38.4 $13.4 35% 2012 5,620 903 16% $7.2 $14.7 $2.0 $6.5 $62.5 $98.6 $17.2 $35.4 $35.0 $12.2 35% 2013 6,555 1,209 18% $7.2 $15.2 $2.0 $6.0 $66.6 $136.4 $17.3 $38.7 $40.7 $16.8 41% 2014 7,236 1,486 21% $10.2 $22.3 $2.3 $7.0 $125.6 $266.8 $19.8 $41.9 $62.7 $30.4 48% 2015 7,182 1,613 22% $12.1 $26.6 $2.8 $9.0 $141.2 $339.4 $21.0 $48.1 $74.3 $39.3 53% 2016 6,296 1,559 25% $13.0 $26.6 $3.4 $9.1 $141.7 $313.6 $21.6 $41.2 $70.7 $37.2 53% 2017 6,750 1,667 25% $13.4 $25.9 $4.0 $10.0 $121.3 $210.9 $22.9 $41.0 $77.2 $38.8 50% 2018 7,333 1,846 25% $21.1 $42.2 $4.9 $11.0 $215.8 $412.6 $29.5 $54.9 $130.1 $71.4 55% 2019 7,427 1,776 24% $20.4 $36.2 $5.3 $13.7 $221.5 $319.8 $33.3 $70.0 $121.2 $57.1 47% Source: NVCA 2020 Yearbook, Data Provided by PitchBook 32 N VC A 2020 Y E A RBOOK Data provided by Growth Equity Growth equity* sits at the later end of the the PitchBook Platform are available on venture capital spectrum, filling a gap page 60. for mature companies that do not have a need for early-stage venture capital nor would a buyout by a private equity firm make sense for their growth. Growth equity can also meet capital needs for larger later-stage companies staying private longer than historically was the case. Many growth equity deals are also included in the venture capital statistics in the Yearbook; however, others are classified as growth/expansion and are not included. NVCA defines most growth equity investments as having the following key characteristics: 1) company has a proven US Growth Equity Investments in 2019 by Sector (#) Momentum for growth equity investment continued in 2019 and grew rapidly Software over the decade. Investors deployed Pharma & Biotech $66 billion across 1,217 growth equity investments last year, a slight year-over- 4% 1% 5% year decline in capital invested but on par with deal count in 2018. Growth equity Other 9% Media 38% 9% has evolved into its own sub-asset class HC Services & Systems 4% 2% since 2010, when investors deployed $19.5 billion across 551 deals. IT Hardware HC Devices & Supplies 22% 6% Energy Consumer Goods & Recreation Commercial Services *Growth equity is not included as a subset of overall VC data in this publication, but is Source: NVCA 2020 Yearbook, Data Provided by PitchBook rather its own unique dataset. More details on the methodology are on page 60. business model (established product and/ or technology and existing customers); 2) company’s revenues are growing rapidly; 3) company is often cashflow positive, profitable or approaching profitability; 4) company is often founder- US Growth Equity Deal Flow by Year 1,217 1,217 owned and / or managed; 5) investor is agnostic about control and purchases 893 than not; 6) industry investment mix is similar to that of earlier-stage venture 623 capital investors; 7) capital is used for company needs or shareholder liquidity; 1,021 1,001 minority ownership positions more often 643 603 474 670 882 695 551 409 378 $43.1 $70.5 $66.4 2010 $42.5 2009 $48.4 2008 $41.2 2007 $23.5 2006 $22.9 $19.5 2005 $24.3 $14.6 are primarily a function of growth, not $23.1 at purchase; and 10) investment returns $22.1 are often unlevered or use light leverage $16.3 usually expected until exit; 9) investments $11.1 8) additional financing rounds are not 2011 2012 2013 2014 2015 2016 2017 2018 2019 Deal Value ($B) leverage, with a lower expected loss Deal Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook ratio than venture capital portfolios. Additional details on the criteria used to identify growth equity investments from 33 N VC A 2020 Y E A RBOOK Data provided by Exit Landscape: Venture-backed IPOs & M&As The exit environment drives the true measure of success for venture-backed US VC-backed IPOs by Year $250 140 companies. Once successful portfolio startups mature, venture funds generally 120 $200 100 exit their positions in those companies by taking them public through an initial $150 80 public offering (IPO) or by selling them to presumably larger entities (via an acquisition, merger, or trade sale) or to a financial buyer (e.g., a private equity buyer). This exit in the company allows the venture firm to distribute the proceeds to investors, 60 $100 40 $50 20 $0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 raise a new fund for future investment, and Exit Size ($B) Exit Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook US IPOs by Year # of All IPOs # of VC Backed IPOs 2007 385 90 2008 193 13 2009 134 11 2010 218 40 2011 214 46 2012 244 59 2013 362 87 2014 392 2015 Top 10 US VC-backed IPOs in 2019 Company Name Exit size ($M) Industry Sector State Uber $67,613.5 B2C California Slack (US) $23,250.0 Information Technology California Lyft $21,660.0 B2C California Zoom Video Communications $8,873.2 Information Technology California Pinterest $8,632.5 Information Technology California 124 Datadog $7,177.5 Information Technology New York 286 80 Peloton $6,942.3 B2C New York 2016 194 42 CrowdStrike $6,075.4 Information Technology California 2017 246 59 2018 240 89 Cloudflare $3,875.2 Information Technology California 2019 192 82 10x Genomics $3,270.1 Healthcare California Source: NVCA 2020 Yearbook, Data Provided by PitchBook Source: NVCA 2020 Yearbook, Data Provided by PitchBook 34 N VC A 2020 Y E A RBOOK Data provided by invest in the next generation of companies. This section collectively refers to any type Ratio of IPO Pre-Valuation to Total VC Invested Post Value ($B) Capital Raised ($B) IPO Pre Value ($B) 2007 $33.2 $24.5 $24.5 $5.00 4.9 2008 $2.8 $2.3 $2.3 $0.40 5.6 2009 $9.6 $7.8 $7.8 $0.80 9.9 2010 $15.3 $12.1 $12.1 $4.64 2.6 The 82 venture-backed IPOs representing 2011 $43.3 $37.8 $37.8 $6.52 5.8 $199 billion in exit value in 2019 marked 2012 $112.7 $91.2 $91.2 $7.62 12.0 2013 $52.5 $43.7 $43.7 $10.24 4.3 2014 $52.4 $42.7 $42.7 $11.10 3.9 2015 $39.0 $31.9 $31.9 $8.92 3.6 $369 million and median IPO post-money 2016 $15.7 $12.4 $12.4 $4.87 2.5 valuation reached $462 million, both metrics 2017 $59.7 $51.3 $51.3 $9.57 5.4 2018 $77.4 $65.3 $65.3 $15.83 4.1 2019 $223.5 $199.3 $199.3 $35.15 5.7 of sale to a corporate entity or to a financial buyer as a merger and acquisition (M&A). IPO trends are analyzed separately. Venture-backed exit activity was the big story for VC in 2019, a record year for exit value following a buildup of large, latestage companies in the private markets. the highest annual exit value on record. Together, these 82 IPOs had a post-money valuation of $223 billion, stemming from just $35 billion invested prior to IPO. The median size of IPOs in 2019 reached breaking the 15-year high reached in 2018. Companies that went public in 2018 had the lowest median age from first VC funding Total VC Raised to Date ($B) Ratio Source: NVCA 2020 Yearbook, Data Provided by PitchBook US VC-backed IPO Value and Age Characteristics # of IPOs Deal Value ($M) Median Deal Value ($M) 2007 90 $24,510.0 $248.8 2008 13 $2,254.1 2009 11 2010 Average Deal Value ($M) Average Post Value ($M) Median Time from 1st VC to Exit Post Value ($M) Median Post Value ($M) Average Time from 1st VC to Exit $310.3 $33,169.0 $330.2 $409.5 5.2 5.7 $143.6 $281.8 $2,849.1 $212.2 $356.1 4.9 4.8 $7,838.8 $317.1 $783.9 $9,624.2 $387.1 $962.4 7.3 7.5 40 $12,133.2 $203.2 $303.3 $15,332.5 $278.7 $383.3 6.7 7.2 2011 46 $37,787.9 $331.2 $944.7 $43,333.4 $423.6 $1,083.3 5.7 6.6 2012 59 $91,249.3 $303.3 $1,862.2 $112,655.8 $356.6 $2,086.2 7.1 7.7 2013 87 $43,663.5 $240.1 $567.1 $52,500.9 $328.5 $648.2 6.7 7.2 2014 124 $42,732.7 $186.3 $359.1 $52,409.7 $250.4 $440.4 7.1 7.3 2015 80 $31,854.6 $220.6 $430.5 $38,989.5 $297.0 $526.9 6.5 6.0 2016 42 $12,363.6 $178.3 $325.4 $15,681.6 $239.3 $382.5 7.8 7.3 2017 59 $51,289.5 $306.2 $899.8 $59,683.2 $411.2 $1,047.1 7.1 6.9 2018 89 $65,280.1 $344.3 $759.1 $77,392.4 $448.8 $899.9 4.7 6.6 2019 82 $199,253.9 $369.5 $2,459.9 $223,469.4 $462.3 $2,758.9 6.9 6.9 Source: NVCA 2020 Yearbook, Data Provided by PitchBook 35 N VC A 2020 Y E A RBOOK Data provided by US Venture-backed M&A Activity to IPO (4.8 years), but the median age of $80 1,200 $70 1,000 $60 800 $50 600 $40 $30 companies going public in 2019 increased to 6.9 years. The slate of 2019 IPOs included several household names—B2C companies Uber, Lyft, and Peloton were three of the 10 largest IPOs of the year. Software companies Slack and Zoom Video Communications ranked 400 second and fourth, respectively, of 2019’s 200 biotech company 10x Genomics—cracked largest IPOs. One life sciences company— $20 $10 $0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Deal Value ($M) Acquisition Count Disclosed Value Count Source: NVCA 2020 Yearbook, Data Provided by PitchBook the top 10 ranking. Geographically, companies based in California comprised the five largest IPOs of the year. Venture-backed companies accounted for 43% of all US IPOs in 2019, surpassing the 15-year high set in 2018. Even with a US VC-backed M&A Value and Age Characteristics # of Acquisitions # with Disclosed Values Deal Value ($M) Median Deal Value ($M) Average Deal Value ($M) Median Time from 1st VC to Exit Average Time from 1st VC to Exit 2007 537 250 $32,602.9 $47.5 $130.4 4.7 4.9 2008 480 183 $15,183.5 $34.2 $83.0 4.7 4.9 2009 469 148 $13,697.0 $22.4 $92.5 4.4 4.9 2010 667 239 $29,262.8 $40.0 $122.4 4.4 5.0 2011 693 262 $28,886.7 $42.2 $110.3 4.2 4.9 2012 809 253 $33,129.2 $41.2 $130.9 4.5 5.1 big year for venture-backed IPOs, M&As continued to account for the majority of exits, comprising an average of 92% of annual venture-backed exits from 20042019. M&A activity remained strong in the second half of the decade, with six straight years of $40 billion+ in disclosed exit value. In 2019, 836 M&As (219 with disclosed values) represented a total of $61.4 billion in disclosed exit value, a 6% decrease year-over-year. After peaking in 2014, M&A exit count dropped off. However, this diminished 2013 819 260 $28,659.2 $36.0 $110.2 3.8 4.9 volume posted in 2019 at higher 2014 957 314 $68,820.5 $50.0 $219.2 4.5 5.3 deal values reached $100 million and 2015 950 278 $43,699.7 $45.5 $157.2 4.3 5.5 2016 866 249 $60,916.8 $78.0 $244.6 4.5 5.7 2017 870 233 $46,505.6 $70.0 $199.6 5.2 6.2 venture funding to exit of 5.5 years. 2018 933 256 $65,062.8 $98.3 $254.2 5.2 6.1 M&A activity for software companies 2019 836 219 $61,378.6 $100.0 $280.3 5.5 6.3 Source: NVCA 2020 Yearbook, Data Provided by PitchBook valuations—the median and average $280 million, respectively, both 16year highs. The age of companies that were acquired or merged continued to increase, with a median age from first cooled in 2019 after a record year in 2018. Last year, the software sector accounted for 45% of disclosed M&As by value. SAP’s $8 billion acquisition of Utah-based survey platform provider Qualtrics was the largest of the year. Four healthcare companies 36 N VC A 2020 Y E A RBOOK Data provided by ranked in the top 10 largest M&A events, led by Johnson & Johnson’s $5.75 billion acquisition of robotic micro-surgical device Top 10 US VC-backed M&A in 2019 Company Name Deal Size ($M) Industry Sector State Qualtrics $8,000.0 Information Technology Utah Massachusetts, or New York. Auris $5,750.0 Healthcare California Unicorns were a key driver of 2019’s robust Honey Science $4,000.0 unicorns, held $1 billion+ exits in 2019 for IFM Tre $1,575.0 Healthcare Massachusetts an aggregate exit value of $208 billion, both ConnectWise $1,500.0 Information Technology Florida Cylance $1,400.0 Information Technology California next stage of growth, while generating Promedior $1,390.0 Healthcare Massachusetts record value for public and private market Peloton Therapeutics $1,050.0 Healthcare Texas found their performance and valuations SignalFx $1,050.0 Information Technology California on shaky ground after floating. Against a Acquia $1,000.0 Information Technology Massachusetts developer Auris. Three companies in the top 10 were headquartered outside California, Consumer Products and Services (B2C) exit activity—36 companies, many of them metrics representing record highs. These companies matured and graduated to their investors. However, some IPOs of 2019 backdrop of concerns around corporate California Source: NVCA 2020 Yearbook, Data Provided by PitchBook governance and profitability, stock prices for some notable companies dropped. These trends will certainly be top of mind for venture-backed companies waiting in the wings to follow the IPO path in 2020. US VC-backed IPO Post-Valuation by Range (Company Count) >$10B $1B- $500M- $100M- $10B $1B $500M US VC-backed M&A by Range (Company Count) >$1B $500M-$1B $100M-$500M 2007 1 9 68 459 2008 1 4 34 441 2009 1 5 29 434 2010 1 12 58 596 2011 3 5 62 623 2012 4 9 67 729 2013 4 6 65 744 2014 9 18 89 841 2015 8 9 80 853 2016 8 18 84 756 2017 8 17 70 775 2018 10 13 89 821 2019 9 14 79 734
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Explanation & Answer

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Running head: VENTURE CAPITAL

1

Venture Capital Class 1
Student Name
Institution Affiliation

VENTURE CAPITAL

2
Venture Capital
Question 1 Response

I am inclined to and fully agree with statement ‘A’. For not less than a decade, Venture
Capital has conveyed poor outcomes. Since the late 1990s, the returns of venture capital have not
substantially outpaced the public market (Jacobius, 2018). Since 1997, investo...


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