Latest CVC StatisticsApril 26, 2006Mark G. HeesenPresidentBeyond the simplistic observations …Corporate Venture Capital Investment –Not a Passing Fad!Corporate VC Peaked in 2000 at >1/4 of deals and 1/6 of the money0%5%10%15%20%25%30%35%% of Deals10%13%17%27%31%25%21%18%20%21%20%% of Dollars7%7%8%16%16%12%9%7%7%7%7%19961997199819992000200120022003200420051Q06Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson FinancialCorporate Venture Capital Groups Had Become Very Involved$0$5,000$10,000$15,000$20,000 $M 7099781,7248,28116,7064,9621,8991,2991,4501,47239719961997199819992000200120022003200420051Q06Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson FinancialIn Rounds with Corporate VC Participation, CVCs (Shown in Green) Now Comprise a Smaller Part$0$5$10$15$20Average Round ($M)Non-Corp $3.645.138.075.594.815.205.775.904.88Corp VC $3.507.188.535.213.552.972.822.752.58199819992000200120022003200420051Q06Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson FinancialIn Q1, CVCs Invested in 20% of the deals but were investors in 60% of the IPOs0%10%20%30%40%50%60%70%% of Deals10%13%17%27%31%25%21%18%20%21%20%% of IPOs22%28%37%57%61%29%46%55%57%55%60%19961997199819992000200120022003200420051Q06Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson FinancialDespite perceptions, Corporate VC is only slightly more heavily weighted toward the life sciences …(2005 & 1Q06)Corporate Venture CapitalSW19%Bio16%Med Dev13%Telecomm12%Semi10%12 others30%Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson FinancialAll US VCSW21%Bio16%Telecom11%Med Dev10%Semi8%17 other34%The Exit Scene -the importance of acquisitions has become clear over the past several years$0$10$20$30Offer ($ B)7.511.14.53.518.825.53.52.52.011.04.50.5199519961997199819992000200120022003200420051Q06IPO Levels Increased in 2004 but rally was not sustainedSource: Thomson Financial/National Venture Capital Association050100IPOs Done29935610In Reg at EOY315716242003200420051Q06What’s in the IPO Pipeline?IPOs During Period and Registration Counts at Period EndSource: Thomson Financial/National Venture Capital Association$0$20$40$60$80Acq $B7938681788151651997199819992000200120022003200420051Q06M&A Proceeds Vary Greatly As the Mix between “Good” Exits and Fire Sales ShiftSource: Thomson Financial/National Venture Capital AssociationPrivate Equity Returns -Converging on Expectations? Fund Type 1yr 5 yr 20 yr Early VC 10% -13% 20% Later VC 13% -8% 14% > All VC 20% -9% 17% Buyouts 33% 3% 13% All PE 27% -1% 14% S&P 500 10% -3 11% NASDAQ 13% -10 12% As of 9/30/2005Source: Thomson Financial/National Venture Capital AssociationFor the Past 7 Years, Investment Has Exceeded LP Distributions$0$20,000$40,000$60,000$80,000$100,000$120,00019961998200020022004$ MillionInv ($M)Dist to LPs ($M)Source: Thomson Financial/National Venture Capital AssociationNVCA Annual MeetingWashington DCApril 17-18, 2007►Trends and issues from beyond Palo Alto, Norwalk and Washington►Latest thinking and insights►Industry, CFO, Young VC, Legal, Corporate VC BreakoutsWww.nvca.orgwww.aeeg.org