NVCA 2019 Yearbook

YE ARBOOK
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Credits & Contact
National Venture Capital Association NVCA Board of Directors 2018-2019
(NVCA)
EXECUTIVE COMMITTEE
Washington, DC | San Francisco, CA | Palo Alto, CA
nvca.org | [email protected] | 202-864-5920 ALEXIS BORISY Third Rock Ventures, Chair

JAN GARFINKLE Arboretum Ventures, Chair-Elect
DENISE MARKS SV Health Investors, Treasurer
BOBBY FRANKLIN President and CEO
BRIAN RICH Catalyst Ventures, Secretary
JEFF FARRAH General Counsel
RICH WONG Accel Partners, At-Large
JUSTIN FIELD Senior Vice President of Government MAHA IBRAHIM Canaan Partners, At-Large
Affairs BARRY EGGERS Lightspeed Venture Partners, At-
MARYAM HAQUE Senior Vice President of Industry Large
Advancement
STEPHANIE VOLK Vice President of Development AT-LARGE
ALLYSON CHAPPELL Director of Conferences and
Events BRUCE BOOTH Atlas Venture
CASSIE ANN HODGES Director of Communications MICHAEL BROWN Battery Ventures
HANNAH MUNIZZA Director of Business MIKE CARUSI Lightstone Ventures
Development and Marketing CHRISTY CHIN Draper Richards Kaplan Foundation
CHARLOTTE SAVERCOOL Director of Government JEFF CLAVIER Uncork Capital
Affairs MICHAEL DIXON Sequoia Capital
MICHELE SOLOMON Director of Administration STEVE FREDRICK Grotech Ventures
DEVIN MILLER Manager of Communications and CHRIS GIRGENTI Pritzker Group Venture Capital
Digital Strategy JOE HOROWITZ Icon Ventures
CLAIRE POZEK Manager of Public Policy GEORGE HOYEM In-Q-Tel
MARK KVAMME Drive Capital
PitchBook Data, Inc. LISA LAMBERT National Grid Ventures

MARY MEEKER Kleiner Perkins
pitchbook.com
EMILY MELTON Threshold Ventures
RESEARCH
[email protected] PATRICIA NAKACHE Trinity Ventures
DEEPA PAKIANATHAN Delphi Ventures
EDITORIAL
VIC PARKER Spectrum Equity
[email protected]
SALES WILL PRICE Next Frontier Capital
[email protected] GLENN RIEGER NewSpring Capital
CARMICHAEL ROBERTS Material Impact
JOHN GABBERT Founder, CEO PHIL SANDERSON SFVC
ANDY SCHWAB 5AM Ventures
ADLEY BOWDEN Vice President,
Market Development & Analysis JOHN SOMORJAI Salesforce Ventures
JENNIFER TEGAN Cayuga Venture Fund
NICOLE WALKER Baird Capital
DATA AND DESIGN
ALBERTO YEPEZ ForgePoint Capital
HENRY APFEL Data Analyst II
DAVID YORK Top Tier Capital Partners
HALEY BURSON Junior Graphic Designer
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Contents
Dear Readers 04
Executive Summary 05
Venture Capital 101 07
The US Venture Industry At-A-Glance 11
Capital Commitments: Venture Fundraising 19
Capital Deployed: Investment into Venture-
23
backed Companies
Exit Landscape: Venture-Backed IPOs & M&As 33
NVCA 2018 Year in Review 37
Looking Ahead: NVCA’s 9 for 2019 39
NVCA 2019 Events Calendar 43
2019 NVCA Public Policy Initiatives 44
Our Vibrant Member Community 46
Glossary 48
Data Methodology 60
Geographic Definitions 61
Industry Code Definitions 62
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NVC A 2019 YE ARBOOK
Data provided by
Dear Readers
March 2019
Dear Readers:
NVCA’s 22nd annual Yearbook shines for the industry in recent months. And if big thank you to the NVCA member firms
a spotlight on the historic year the U.S. creating the next big thing and navigating who continue to support us for the greater
venture capital industry had in 2018. economic volatility aren’t enough of good of advancing the venture industry.
Record capital flows across the venture a concern for the venture ecosystem, Our work would not be possible without
cycle led headlines in 2018, as limited regulatory uncertainty continues to reign. you!
partners (i.e., investors into venture
As the voice of the venture capital And we once again thank our partner
funds) committed $54 billion to 257 U.S.
community, NVCA was hard at work in PitchBook, NVCA’s official data provider,
venture funds closed last year; nearly
2018, continuing to advocate on behalf for providing the data (unless otherwise
8,500 venture-backed companies raised
of startups and venture firms on capital noted) in this publication. The Yearbook and
more than $130 billion in funding; and 864
markets reform, foreign investment its supporting data may be accessed three
venture-backed exits surpassed a combined
legislation, immigration policy, and tax ways: 1) this PDF report; 2) the PDF data
value of $122 billion.
proposals affecting the ecosystem, and pack, which is available to the public; and 3)
However, beneath those large pools more. While global venture investment the XLS data pack, which is available only to
of capital has been an industry dollars continue to grow, U.S.-based NVCA members.
metamorphosis, with fewer funds raising companies are attracting a smaller share
Excitingly, we continue to hear—from
capital, fewer companies receiving (51% in 2018 and well below the 84% U.S.
venture capital investors, entrepreneurs,
investment, and fewer venture-backed exits share in 2004). Policies that make the
industry advisors, academics, limited
taking place. At the same time, more types U.S. the most attractive country to start
partners, policymakers, and others across
of investors are actively investing in the and grow a business continue to drive our
the country—that the NVCA Yearbook is
startup ecosystem. The venture industry advocacy efforts in Washington.
an important resource, supplementary to
today looks much differently than it did 10-
2018 also brought new faces to the the quarterly PitchBook-NVCA Venture
20 years ago, including shifting investment NVCA team; educational initiatives; Monitor. We hope you find this year’s
stages and large deals for later-stage diversity and inclusion programs through edition of the Yearbook helpful. Please
companies reaching new heights. VentureForward; and events to engage with share your feedback with us via our contact
the industry on topics that matter to you. A details below.
What are the latest venture capital data
trends for fundraising, investment, and exit
activity? How do these compare to previous
years? And what do they mean for 2019
and beyond? We unpack these trends in
more detail in this publication, as well as
dive into sector, geographic, and firm/fund
size analyses.
Public market volatility at the end of

Bobby Franklin Maryam Haque
2018 and the start of 2019 gave pause to
President and CEO Senior Vice President of
the global financial world, and potential Washington, DC Industry Advancement
corrections and the trickle-down effect on [email protected] San Francisco, CA
the venture market have been top of mind [email protected]
4
Data provided by
Executive Summary
The U.S. venture capital (VC) industry had a historic year in 2018, capping a five-year flurry of activity where $70 billion+ was deployed
into 8,000+ high-growth startups each year since 2014. Over that time period, nearly 49,000 venture investments attracted an aggregate
of $445 billion to start, build, and fuel innovative companies across the country.
At the end of 2018, 1,047 venture firms were in existence, managing 1,884 active venture funds and translating to approximately $403
billion in U.S. venture capital assets under management. All three metrics represent continued growth of the industry. However, while
capital flows have reached record heights, that capital is increasingly concentrated in the hands of fewer players.
In the past five to six years, the industry has trended towards bigger funds, bigger investments, bigger valuations, and bigger exits. At
the same time, there has been a peak and then decline in the number of funds, investments, and exits. Nonetheless, the past year (and
decade for that matter) has brought a new crop of transformative American venture-backed companies. These companies have disrupted
traditional industries and created new ones, and capital and guidance from venture investors have fueled their growth.
The changing dynamic of the industry has partly come from shifts in early stage investing; the composition of capital supply, i.e., the
diversity of the investor base, new types of investors, and new funds; and increased capital availability/investment at the later stages and
via mega deals. The question remains of whether the venture industry has reached a new normal or a peak ahead of a cooling off period.
While the answer to that question remains to be seen, there is no question that the venture industry of today is quite different than a
decade ago.
A record year for capital flows in the venture ecosystem coincided with a busy year of public policies impacting investors and
entrepreneurs in 2018. NVCA was at the forefront of these issues in Washington, advocating on behalf of the industry (see page 39). In
addition to advocacy, NVCA continued to serve the ecosystem with education, programming, research, and resources. NVCA’s 2018 “Year
in Review” starting on page 37 showcases the highlights, and be sure to check out what’s ahead in 2019 and how to get involved.
Highlights of the U.S. venture ecosystem in 2018:

CAPITAL COMMITMENTS TO VENTURE FUNDS (More details starting on page 19)
• Venture capital investors raised $54 billion across 257 funds to deploy into promising startups, marking the fifth consecutive year of
$35 billion or more raised.
• 52 first-time funds raised $5.3 billion in commitments last year, with both metrics reaching a 15-year high.
• Sequoia Capital’s Global Growth Fund held an $8 billion final close in September 2018, making it the largest VC fund closed to date.
• VC funds based in 28 states held final closes on venture funds in 2018, with Indiana, Kansas, Montana, Alabama, Kentucky, and Rhode
Island all seeing funds raised in 2018 after no disclosed venture funds raised capital in those states in 2017.
• The overall U.S. median VC fund size in 2018 was $75 million, a ten-year high and more than 50% larger compared to 2017.
• Outside of California, Massachusetts, and New York, median VC fund size reached $25 million in 2018, a steady increase since 2014 but
still relatively small compared to the dominant venture hubs – the median for California, Massachusetts, and New York, collectively, was
$100 million.
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Data provided by
CAPITAL DEPLOYED TO STARTUPS (More details starting on page 23)
• More than 8,380 venture-backed companies received $131 billion in funding in 2018, eclipsing the $100 billion watermark set at the
height of the dot-com boom in 2000.
• Mega deals (i.e., investments of $100 million+ into venture-backed companies) accounted for nearly half (47%) of total capital invested in 2018.
• Unicorns (i.e., venture-backed companies valued at $1 billion+), many of which raised mega deals, attracted $46 billion, or 35% of total
capital invested, but less than 2% of the total deals completed in 2018.
• The number of angel/seed VC investments returned to pre-2013 levels, with 3,760 deals completed representing 42% of total deals in
2018, the lowest absolute and relative figures since 2012.
• The number of both early stage and later stage VC investments increased for the second consecutive year in 2018, after what appeared
to be a deceleration in 2016. However, on a quarterly basis, early stage and later stage deal count fell in 4Q 2018, suggesting a year-end
deceleration with potential to spill over to 2019.
• Though the number of first-time financings (i.e., first round of equity funding in a startup by an institutional venture investor) continued
to decline in 2018, the 2,040 companies raising first-time funding attracted a 15-year high of $10.1 billion.
• The software sector continued to attract the lion’s share of VC activity. But the life sciences sector saw significant growth, with more
than $23 billion invested across 1,230+ companies in 2018, a record high for both metrics. The sector accounted for 18% of total capital
invested and 15% of all companies receiving venture funding in 2018.
• For the sixth straight year, more than 1,000 venture investments involved corporate venture capital (CVC) participation. In 2018, 16% of
all VC deals involved CVC, the highest share since 2006.
• Growth equity* investment in 2018 spiked after strong years from 2014 to 2017. Investors deployed $66 billion across 1,057 growth
equity investments last year, with both metrics reaching 15-year highs.
• Venture funding reached startups in all 50 states and the District of Columbia, 222 Metropolitan Statistical Areas (MSAs), and 393
Congressional Districts. Charleston, SC, Richmond, VA, and Indianapolis, IN saw the biggest growth rate** for annual number of VC
investments over the past five years (for those MSAs with at least 15 in 2018). Indianapolis, IN, Columbus, OH, and New Haven, CT saw
the largest annual growth for VC investment dollars over the past five years (for those MSAs with at least $10 million VC investment in
2013 and 2018).
• Globally, $254 billion was invested across nearly 15,300 deals in 2018. The U.S. represented 51% and 58% of the global total,
respectively.
EXIT LANDSCAPE (More details starting on page 33)
• In 2018, 85 venture-backed IPOs raised $63.6 billion, the highest aggregate annual total for capital raised since the dot-com boom
except for 2012 when Facebook went public.
• Venture-backed companies accounted for 40% of all U.S. IPOs in 2018, a 15-year high.
• The number of disclosed mergers and acquisitions (M&As) have continued their dip since 2014, with 779 M&As in 2018 and far from the peak
of 953 in 2014. However, last year’s 199 M&As with disclosed values represented a total of $58.4 billion in disclosed exit value, the highest
since 2014.
• 33 unicorns held exits in 2018, the highest annual total on record, for an aggregate deal value of $76 billion.
*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 [XX].
** Calculated as compound annual growth rate.
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.
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Data provided by
Venture Capital 101

Venture capital has enabled the United financed with traditional bank financing; 2) is acquired or goes public, there is little
States to support its entrepreneurial talent threaten established products and services actual value. Venture capital is a long-term
by turning ideas and basic research into in a corporation or industry; and 3) typically investment.
products and services have transformed require five to eight years (or longer!) to
the world. Venture capital funds build reach maturity.
companies from the simplest form—perhaps
Venture Investors Partner
just the entrepreneur and an idea expressed Venture capital is quite unique as an
institutional investor asset class. Venture
with Entrepreneurs
as a business plan—to freestanding, mature
capital funds make equity investments in a The U.S. venture industry provides
organizations.
company whose stock is essentially illiquid the capital to create some of the most
and worthless until a company matures innovative and successful companies.
Risk Capital for High- five to eight years down the road. Follow- However, venture capital is more than
Growth Businesses on investment provides additional funding

as the company grows. These “rounds,”
money. A venture capital professional’s
most precious asset is time. According to
Venture capital firms are professional, typically occurring every year or two, are a 2016 study, How to Venture Capitalists
institutional managers of risk capital that also based on equity in the company, with Make Decisions?1, for every company in
enable and support the most innovative the shares allocated among the investors which a venture firm eventually invests,
and promising companies. Venture capital and management team based on an agreed the firm considers roughly 100 potential
supports new ideas that 1) could not be “valuation.” However, unless a company opportunities. The same study, which
Venture Capital Plays a Vital Role in a Startup’s Growth

Company
Development Idea/Start up Development Growth Maturity
Investment
Seed. Angel Early Stage VC Late Stage VC Exit
Stages
Concept, Product Operational, Growth Expansion

business development rollout
planning
Time
Cash flow
Sources of funding: VCs, angel investors, incubators, accelerators, strategic investors (corporate groups),
growth equity investors, private equity firms, debt investors
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
7
Data provided by
included results from a survey of 889 providing strategic and operational

Common Structure —
venture capital professionals at 681 firms, guidance, connecting entrepreneurs with
showed that the median venture firm investors and customers, taking a board Unique Results
closes about four deals per year. Team, seat at the company, and hiring employees. While the legal and economic structures
business model, product, market, valuation, With a startup, daily interaction with the used to create a venture capital fund are
fit, ability to add value, and industry are management team is common. This active similar to those used by other alternative
all important factors venture investors engagement with a fledgling startup is investment asset classes, venture capital
consider when evaluating investments critical to the company’s success and often itself is unique. Typically, a venture capital
into startups. Venture capital investors are limits the number of startups into which firm will create a Limited Partnership with
seeking entrepreneurs who are addressing any single fund can invest. Many one- and the investors as LPs and the firm itself
global markets, have superb scalability, two-person companies have received as the General Partner. Examples of LPs
demonstrate success within a reasonable funding, but no one- or two-person include public pension funds, corporate
timeframe, and truly innovative. company has ever gone public! Along the pension funds, insurance companies, family
way, the company must recruit talent and offices, endowments, and foundations.
A venture capitalist’s competitive scale up. Any venture capitalist who has Each “fund,” or portfolio, is a separate
advantage is the expertise and guidance had an ultra-successful investment will tell partnership.
they provide to the entrepreneurs in their you that the companies capable of breaking
portfolio. Once the investment into a through were able to evolve the original A new fund is established when the venture
company has been made, venture capital business plan concept due to careful input capital firm obtains necessary commitments
partners actively engage with a company, from an experienced hand. from its investors, say $100 million. The
The VC Fund Structure
Venture Capital Firm Limited Partners

(General Partners or GPs) (LPs, Investors)
Examples: public pension funds, corporate
pension funds, insurance companies, high
VC LP LP LP LP net-worth individuals, family offices,
endowments, foundations, fund-of-funds,
sovereign wealth funds
Fund manager Ownership of the fund
Venture Capital Fund

(Limited Partnership)
Fund ownership of portfolio companies
Investment Investment Investment Investment Investment

into into into into into
company company company company company
8
Data provided by
money is taken from Limited Partners

Economic Alignment of their stock options. The venture capital
as the investments are made through fund and its investors split the capital gains
what are referred to as “capital calls.” All Stakeholders — An per a pre-agreed formula. Many college
Typically, an initial funding of a company American Success Story endowments, pension funds, charities,
will cause the venture fund to reserve individuals, and corporations have benefited
Venture capital is rare among asset
three or four times that first investment far beyond the risk-adjusted returns of the
classes in that success is truly shared. It
for follow-on financing. Over the next public markets.
is not driven by quick returns, financial
three to eight years, the venture firm
engineering, debt, or transaction fees.
works with the founding entrepreneur to At the same time, the risk capital that
Economic success occurs when the stock
grow the company. The payoff comes after funds startups can bring benefits to local
price increases above the purchase price.
the company is acquired or goes public. economies in the form of company growth,
When a company is successful and has a
Although the investor has high hopes for strong public stock offering, or is acquired, competitiveness, and job creation. In fact,
any company getting funded, the 2016 the stock price of the company reflects its recent studies have found that high-growth
study How Do Venture Capitalists Make success. The entrepreneur benefits from startups account for as many as 50% of
Decisions? found that, on average, 15% of appreciated stock and stock options. The gross jobs created, and an average of 2.9
a venture firm’s portfolio exits are through rank and file employees throughout the million net jobs created annually between
IPOs while about half are through an M&A. organization historically also do well with 1980 and 2010.²
How Venture Capital Works
Fundraising Investment Company Growth Exit Returns Re-investment

VCs raise capital for VCs typically invest in VCs provide active After about 5–10 In addition to The fund ends when
funds from LPs. young, high-growth management and years of creating a companies benefitting, all investments have
companies in need of act as advisors & high-growth company, VCs and LPs make been exited and
capital to scale. mentors, taking the VC exits its stake a profit on their proceeds have beem
board seats, via an acquisition or investment. distributed to LPs.
providing strategic IPO. IPOs have more High-quality jobs are LPs can then reinvest
advice, facilitating advantages: greater created, more earnings in a new
introductions. capital raised, higher capital is available for crop of funds.
returns, local job university research,
creation. retirees have more
for retirement,
foundations have
more resources to
fund their work.
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
9
Data provided by
The Impact of Venture- A 2015 study, The Economic Impact of

Venture Capital: Evidence from Public
capitalization: Microsoft ($780B), Apple
($746B), Amazon ($737B), Alphabet ($727B),
backed Companies Beyond Companies³, analyzed the impact venture- and Facebook ($374B).⁴
Financial Returns backed companies, as a subset of all U.S.
public companies founded after 1974, have
While venture investing has generated had on the economy. The study found
What’s Ahead
billions of dollars for investors and their that of the 1,339 U.S. companies that Much of venture capital’s success has come
institutions and created millions of jobs went public between 1974 and 2015, 556 from the vibrant entrepreneurial spirit in the
over the years, the economic impact of (or 42%) are venture-backed. These 556 U.S., financial recognition of success, access
venture-backed companies has been even companies represent 63% of the market to good science, a pipeline of talent, and fair
more far-reaching. Many venture-backed capitalization and 85% of total research and and open capital markets. It is dependent
companies have scaled, gone public, and development of those 1,339 companies. upon investment in scientific research,
become household names, and at the same
motivated entrepreneurs, protection of
time have generated high-skilled jobs and At the end of 2018, venture-backed
intellectual property, a skilled workforce,
trillions of dollars of benefit for the U.S. companies accounted for five of the six
and public policies that encourage
economy. largest publicly traded companies by market
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.
However, the rest of the world is catching

on to the power of venture capital
and entrepreneurship. Global venture
investment has been growing, as it has in the
U.S., but the U.S. has lost its dominance. In
the 1990s, startups in the U.S. accounted
for more than 90% of global venture capital
dollars invested. In 2018, the U.S. accounted
for 51% of global VC investment.
New and aspiring venture investors receive guidance from experienced venture investors and LPs at LP Office Hours
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, 2018. Berkshire Hathaway ranked fifth with a market cap of $500B.
10
Data provided by
At-A-Glance: The U.S.

Venture Industry
The size of the U.S. venture industry has
steadily increased over the past decade. At
VC AUM Summary Statistics
2006 2012 2018
the end of 2018, 1,047 venture firms were
in existence, defined as a rolling count of # of VC Firms in Existance 876 765 1,047
firms that have raised a fund in the last eight
years. These 1,047 firms managed 1,884 # of VC Funds in Existance 1,233 1,187 1,884
venture funds and had approximately $403 # of First Time VC Funds Raised 47 31 52
billion in U.S. venture capital assets under
management (AUM) and $100 billion in dry # of VC Funds Raising Money this Year 191 203 257
powder at the end of 2018. VC Capital Raised this Year ($B) 33.4 24.4 53.8
Thanks to a strong VC fundraising year in VC AUM ($B) 204.5 253.7 403.5
2018, VC AUM increased 14% year-over- Avg VC AUM per Firm ($M) 200.9 201.3 242.4
year from 2017 to 2018, and brought
capital raised by venture funds in the past Avg VC Fund Size to Date ($M) 139.3 242.6 234.7
five years to $200 billion. This has helped Avg VC Fund Size Raised this Year ($M) 200.0 130.0 218.8
the industry’s annual AUM grow at a rate of
6.44%* since 2004. Median VC AUM per Firm ($M) 57.7 38.5 38.6
Median VC Fund Size to Date ($M) 50.0 50.0 45.4

VC assets remain geographically
concentrated in three states—the dominant Median VC Fund Size Raised this Year ($M) 68.9 22.0 75.0
hubs for venture activity—California, Largest VC Fund Raised to Date ($M) 2,560.0 3,000.0 8,000.0
Massachusetts, and New York. These three
Source: NVCA 2019 Yearbook, Data Provided by PitchBook
states together made up more than 85% of
* Number of firms in existence is based on a rolling count of firms that raised a fund in the last 8 vintage years
total U.S. VC AUM in 2018, representing a * Number of VC funds in existence is based on a rolling count of funds that have closed in the last 8 vintage years
ten-year steady rise since 2008 when they * AUM is calculated by adding together a firm’s total remaining value and their total dry powder.
accounted for 73% of the country’s AUM.

California, Massachusetts, and New York US Venture Capital AUM by Year
saw year-over-year AUM increases of 16%,
14%, and 21%, respectively. 500
Total AUM ($B)

Kansas, Indiana, Montana, New Hampshire,
400
and Alabama were among the states
with the highest year-over-year VC AUM
increases. In fact, 34 states witnessed 300
increases in their VC assets under
management from 2017 to 2018, and 31
states had more than $100 million in AUM 200
at the end of 2018. However, as we always
note, VC assets by a firm’s headquarter
100
state oftentimes is not the most telling
$158
$174
$204
$226
$231
$233
$241
$259
$254
$260
$291
$321
$335
$354
$403
figure since firms frequently invest in

companies outside their state, as noted on 0
the charts on page 27. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
*Calculated as compound annual growth rate.
11
Data provided by
The trend of larger firms getting larger, and investment, and $308 billion in exit value precipitously over the past 15 years. The U.S.
an influx of newer, smaller funds continues for venture-backed companies in 2018. The accounted for 40% of total capital exited in
to unfold. The median venture firm size* was U.S. share of global fundraising has remained 2018, dipping below 50% for the first time.
$39 million in 2018. Most firms (744 firms or strong and last year accounted for two- Similarly, the U.S. share of global venture
57% of firms) managed less than $100 million thirds of total funds raised. However, the investment has teetered close to 50% the
at the end of 2018, and 86 firms managed $1
global shares of capital invested and exited past three years (reaching 51% in 2018), well
billion+, an uptick from 2017. Firms managing
attributed to U.S. companies have dropped below the 84% global share in 2004.
$100 to $250 million comprised 22% of all
active U.S. VC firms last year.
Distribution of Firms by AUM in 2018
Last year, 7,303 active investors (all types
300 284
and headquartered globally) made one or
more investment in U.S. companies, the third
250
consecutive year of decline after peaking 223
in 2015. Active U.S.-based VC investors
also dropped slightly to 2,113 in 2018 after 200 185
174
peaking in 2017. Similarly, U.S. VC investors 162
making first round investments also declined 150

126
to 908, while U.S. active life science VC
investors rose to 604 (a 15-year high). 100 86
60
A banner year of investment in the U.S. 50
buoyed global venture record highs of
$80 billion in fundraising, $254 billion in
0
$0-$10M $10-$25M $25-$50M $50-$100M $100-$250M $250-$500M $500-$1B $1B+
Fund and Firm Analysis Source: NVCA 2019 Yearbook, Data Provided by PitchBook
Total Total Firms that Raised Avg Firm Median Median

Total Cumulative Existing AUM Avg Fund
Cumulative Cumulative Funds in the Last 8 Size* Fund Size Firm
Capital ($B) Funds ($B) Size ($M)
Funds Firms Vintage Years ($M) ($M) Size* ($M)
2004 1356 866 262.78 1128 814 158.21 112.45 173.64 43.50 59.37
2005 1490 912 285.83 1174 846 173.75 139.66 175.96 50.00 56.35
2006 1658 943 319.24 1233 876 204.50 174.91 200.94 68.90 57.70
2007 1815 937 354.13 1205 870 226.09 190.66 213.31 100.00 58.02
2008 1976 831 385.59 1094 765 231.29 167.38 221.93 64.50 54.68
2009 2082 778 397.50 1016 726 232.67 100.06 208.86 33.00 49.37
2010 2216 787 417.43 1055 720 241.30 132.88 205.07 42.50 45.08
2011 2359 822 443.75 1125 746 258.91 169.79 212.36 40.00 43.56
2012 2543 852 468.19 1187 765 253.75 120.38 201.25 22.00 38.50
2013 2745 899 488.78 1255 794 260.45 95.36 206.97 30.50 41.04
2014 3019 949 524.06 1361 818 290.56 123.34 213.88 25.25 35.46
2015 3295 988 560.07 1480 866 320.66 124.61 221.02 30.00 35.62
2016 3593 1033 601.17 1617 906 335.12 132.57 218.67 45.50 34.50
2017 3844 1104 635.52 1762 982 354.19 134.69 217.62 50.00 34.22
2018 4100 1167 689.34 1884 1047 403.47 209.43 242.35 75.00 38.64

*Defined as Commitments + Net Asset Value
12
Data provided by
Number of Active Investors (#)
# of # of # of # of # of # of #Active #Active
# of Active Active # of Active Active # of Active Active #Active US US VC
Active 1st Life Active VC VC 1st VC Life Active US US 1st US Life US VC VC 1st Life
Investors Round Science Investors Round Science Investors Round Science Investors Round Science
Investors Investors Investors Investors Investors Investors Investors Investors
2004 2396 907 789 1291 565 463 1729 734 567 1006 476 368
2005 2528 1007 803 1289 567 466 1849 801 566 1038 492 365
2006 2768 1242 832 1376 684 500 2018 958 632 1087 558 404
2007 3344 1464 990 1560 740 559 2404 1122 731 1246 629 453
2008 3520 1456 969 1626 728 558 2533 1124 758 1289 600 453
2009 2995 1252 852 1424 579 494 2184 978 658 1114 497 404
2010 3499 1625 833 1570 697 488 2542 1246 655 1244 586 415
2011 4494 2344 882 1794 891 511 3046 1653 713 1401 748 438
2012 5644 2924 996 2042 1022 534 3545 1939 772 1584 835 447
2013 7081 3318 1123 2278 1038 593 3956 1963 839 1705 843 487
2014 9181 3738 1376 2632 1168 634 4515 2045 938 1950 950 505
2015 9924 3700 1543 2822 1211 703 4654 1937 1010 2074 976 567
2016 8142 2652 1199 2926 1172 650 4201 1552 840 2092 954 517
2017 7692 2436 1369 3034 1253 743 4043 1481 911 2182 1015 571
2018 7303 2130 1523 3115 1180 821 3849 1326 999 2113 908 604
*VC investors include entities with primary investor type as: Venture Capital, Corporate Source: NVCA 2019 Yearbook, Data Provided by PitchBook
Venture Capital, or Not-for-profit Venture Capital
*VC investors are headquartered globally, but only counted if they invested in a US company

U.S. as a % of Global VC Deal Flow by Year

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Global Deal Value ($B) 36.60 45.60 49.56 36.40 46.53 65.32 61.11 72.35 112.62 150.70 158.91 174.61 254.25
US Deal Value ($B) 29.23 36.01 36.94 27.17 31.27 44.75 41.51 47.54 71.03 82.97 77.23 82.95 130.93
Global Deal Value (#) 4,915 6,411 7,087 6,823 8,679 11,078 13,181 16,128 19,024 20,172 18,036 17,314 15,299
US Deal Value (#) 3,344 4,319 4,727 4,487 5,409 6,759 7,882 9,301 10,573 10,740 9,200 9,489 8,948
US as % of Global ($) 80% 79% 75% 75% 67% 69% 68% 66% 63% 55% 49% 48% 51%
US as % of Global (#) 68% 67% 67% 66% 62% 61% 60% 58% 56% 53% 51% 55% 58%
13
Data provided by
Active Investor count in 2018 deals by HQ state
98 2 5
28
2
- 17
35 -
2 1 32 461 3
5 248
2 8
63
84 30 30 5
17 19 28
60 1 26
24 -
1384 12 47 37
4 19 32
21 3 1
2
- 5 38
100
3
-
42
-
Source: NVCA 2019 Yearbook, Data Provided by PitchBook.
U.S. as a % of Global VC Exits by Year

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Global Exit Value ($B) 48.03 85.57 25.84 31.84 64.03 94.14 135.11 104.61 229.95 117.33 106.59 145.66 308.63
US Exit Value ($B) 31.89 57.97 18.00 22.26 39.74 67.05 125.37 72.75 116.79 72.19 70.98 91.96 122.01
Global Exit Value (#) 873 1,065 820 784 1,187 1,238 1,409 1,528 1,919 1,895 1,697 1,694 1,444
US Exit Value (#) 533 623 487 480 704 738 875 900 1,078 1,020 888 885 864
US as % of Global ($) 66% 68% 70% 70% 62% 71% 93% 70% 51% 62% 67% 63% 40%
US as % of Global (#) 61% 58% 59% 61% 59% 60% 62% 59% 56% 54% 52% 52% 60%
14
Data provided by
Active Investor count in 2018 deals by Investor HQ State
49 2 3 17
5
1
4
- 21
11
1 1 35
322 137
5
4 4
27 34
87 23
9 20 24 20
42 8
8 23 -
6 29
868 30
18
1 22 24
2
13 2
3
- 2 26
75
3
- 35

Note: This map breaks out the 2,113 active VC investors by their HQ state. Note that active VC investors headquartered outside of the U.S. are not included in this map.
U.S. as a % of Global VC Fundraising by Year

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Global Capital Raised ($B) 47.63 55.07 53.18 22.69 38.85 47.68 39.25 34.07 51.49 76.45 71.01 57.33 80.05
US Capital Raised ($B) 30.70 29.04 28.63 10.48 18.46 25.19 23.35 19.68 35.02 35.88 40.51 34.17 53.82
Global Capital Raised (#) 401 411 444 337 385 434 433 405 485 498 540 478 450
US Capital Raised (#) 191 183 188 119 150 155 208 221 292 298 333 285 296
US as % of Global ($) 64% 53% 54% 46% 48% 53% 59% 58% 68% 47% 57% 60% 67%
US as % of Global (#) 48% 45% 42% 35% 39% 36% 48% 55% 60% 60% 62% 60% 66%
15
Data provided by
AUM by State 2018 ($M)
6,405.44 67.32 72.82 918.13

96.24
47.96
202.09
47.19 1,089.01
131.74
82.06 - 2,449.38
55,998.58 59,495.5
6.58
84.68 -
1,490.99 3,542.12
6,889.44 5,111.74
127.09 2,799.65 170.24 3,610.8
2,233.46 69.25
46.48 1,540.79 -
156.46 1,127.19
228,185.22 2,992.07
5,086.55
8.48 1,235.15 1,304.56
121.79
599.17 29.14
12.16
- 70.58 1,340.64
4,185.9
259.67
- 1,923.23
1.79
Top 5 States by AUM in

2018 ($B)
AUM
California 228.19
Massachusetts 59.50
New York 56.00
Illinois 6.89
Washington 6.41
Total 356.97
16
Data provided by
AUM by As of Year by State ($M)

2004 2005 2006 2007 2008 2009 2010 2011
Alabama 149.09 166.42 183.22 174.96 176.88 168.50 166.57 151.91
Arizona 96.07 90.64 89.95 80.03 71.31 65.74 51.81 93.83
Arkansas - - - - - - - -
California 73,452.53 81,792.14 96,984.68 104,372.02 111,139.84 113,180.54 118,938.43 127,496.25
Colorado 1,461.00 1,280.05 1,190.60 1,748.00 1,665.34 1,557.91 1,946.44 1,907.10
Connecticut 6,306.07 7,287.30 10,160.91 10,580.67 9,504.82 9,573.97 9,897.09 9,485.17
Delaware 8.50 6.07 24.11 17.46 12.66 11.44 11.83 11.75
District of Columbia 1,525.37 1,472.29 1,606.19 2,486.00 2,515.83 2,328.34 2,135.61 2,629.51
Florida 1,002.77 1,292.62 1,260.91 1,515.82 1,571.55 1,548.03 1,531.42 1,480.28
Georgia 865.19 896.36 1,204.87 1,308.52 1,210.95 1,296.65 1,524.51 1,551.14
Hawaii 7.62 6.80 7.03 6.88 7.20 6.99 6.29 5.72
Idaho 23.71 22.01 21.91 94.11 81.71 78.88 94.82 95.80
Illinois 3,311.23 3,288.42 3,948.46 4,389.52 4,514.67 4,410.87 4,783.77 5,594.44
Indiana 345.34 318.79 308.16 289.51 240.96 221.20 207.58 182.32
Iowa 30.93 28.71 28.58 26.54 21.34 18.20 16.43 14.37
Kansas 4.25 3.04 5.57 2.30 - - - 2.66
Kentucky 138.77 147.77 353.94 342.54 316.40 292.31 282.76 305.30
Louisiana 501.55 521.84 605.47 602.49 577.75 617.92 669.88 607.23
Maine 259.66 246.55 241.12 290.66 257.90 246.26 251.63 260.73
Maryland 1,871.10 1,844.96 2,146.36 2,440.75 2,110.22 1,965.65 1,752.44 1,551.42
Massachusetts 27,697.74 30,136.30 33,401.91 38,755.68 37,365.58 37,869.54 39,110.10 41,675.81
Michigan 424.81 395.45 387.34 438.25 1,324.47 1,454.30 1,708.03 1,910.94
Minnesota 859.62 1,196.23 1,581.22 2,064.32 2,115.72 1,920.58 1,815.05 1,716.35
Missouri 1,268.98 1,206.67 1,229.15 1,451.81 1,308.34 1,175.36 1,146.50 1,202.92
Montana - - 1.75 1.73 1.70 1.54 1.59 1.58
Nebraska 26.67 25.49 22.58 21.11 16.53 15.11 15.95 51.80
Nevada 52.12 48.55 44.25 43.01 81.83 78.53 74.88 70.89
New Hampshire 14.76 14.22 63.36 62.27 59.91 52.95 51.98 51.93
New Jersey 3,653.46 4,619.47 5,918.39 6,616.52 5,815.00 5,955.05 5,967.82 5,800.09
New Mexico 46.38 88.07 110.55 94.35 85.84 87.70 99.06 83.77
New York 16,286.01 16,917.91 21,258.83 23,394.37 21,219.27 20,914.62 22,062.10 27,668.71
North Carolina 910.82 1,099.11 1,443.16 1,388.04 1,364.55 1,264.24 1,220.18 1,035.92
North Dakota - - - - 10.58 10.39 10.73 10.92
Ohio 1,207.50 1,147.43 1,185.86 1,133.65 1,112.43 1,079.38 1,054.11 1,000.22
Oklahoma 53.06 46.37 69.53 66.41 51.33 47.68 41.01 27.19
Oregon 102.08 95.94 87.99 81.68 66.28 62.08 72.49 69.00
Pennsylvania 2,857.87 2,915.72 3,243.28 3,476.77 3,598.11 3,877.97 4,072.53 3,999.73
South Carolina - - - - - - - -
South Dakota - 10.08 9.85 9.16 40.55 39.89 57.45 58.58
Tennessee 618.07 634.84 658.36 683.80 634.33 601.88 618.07 558.10
Texas 5,568.48 6,005.25 6,063.04 5,880.86 6,092.95 5,748.56 5,549.89 6,169.35
Utah 441.11 415.23 543.66 861.94 953.52 1,106.66 1,098.36 1,302.32
Vermont 13.74 12.76 12.70 11.80 22.95 21.31 25.76 25.01
Virginia 1,759.77 2,261.63 2,646.25 2,881.06 3,552.82 3,509.28 3,413.20 3,638.92
Washington 2,904.71 3,660.54 3,891.50 5,654.31 8,117.73 7,925.23 7,290.53 6,864.44
Wisconsin 64.24 70.94 235.73 234.40 272.39 251.53 445.63 480.46
Wyoming 16.91 16.16 14.32 13.39 10.48 9.58 8.53 7.09

17
Data provided by
2012 2013 2014 2015 2016 2017 2018
Alabama 137.88 117.65 122.42 117.12 88.83 58.10 70.58
Arizona 129.05 248.12 420.15 448.72 482.03 552.49 599.17
Arkansas - - 9.91 9.78 104.31 115.01 121.79
California 126,269.96 129,089.83 151,794.86 169,760.43 185,683.36 197,292.83 228,185.22
Colorado 1,709.71 2,053.43 2,091.71 3,113.71 2,304.71 2,207.35 2,233.46
Connecticut 9,444.27 8,925.44 8,763.41 6,941.82 5,960.51 5,332.06 5,111.74
Delaware 15.46 16.17 41.93 44.56 56.84 67.53 69.25
District of Columbia 2,514.61 2,742.11 2,588.96 2,497.75 2,788.28 4,955.91 5,086.55
Florida 1,606.32 1,550.58 2,012.79 2,020.39 1,984.05 2,009.22 1,923.23
Georgia 1,388.17 1,407.76 1,498.24 1,590.07 1,416.98 1,412.75 1,340.64
Hawaii 3.78 3.74 4.26 3.85 3.18 1.59 1.79
Idaho 91.75 102.75 85.78 73.70 83.81 119.37 82.06
Illinois 5,328.65 5,359.37 6,013.11 6,099.81 5,757.79 6,582.54 6,889.44
Indiana 174.33 152.83 114.61 110.66 80.13 40.07 170.24
Iowa 16.26 18.10 5.06 5.93 5.53 6.45 6.58
Kansas 2.52 2.70 2.96 3.08 3.62 3.32 46.48
Kentucky 277.63 282.02 225.65 238.05 187.61 159.89 156.46
Louisiana 549.09 561.63 598.93 569.95 453.26 290.22 259.67
Maine 228.22 238.77 210.93 332.33 293.51 199.81 202.09
Maryland 1,489.95 1,531.68 1,429.92 1,375.04 1,099.68 979.05 1,127.19
Massachusetts 40,117.51 42,249.83 41,997.24 46,476.23 49,217.45 52,345.49 59,495.50
Michigan 1,761.89 1,988.56 2,133.07 2,249.06 2,379.79 2,284.56 2,449.38
Minnesota 1,821.07 1,783.97 1,891.06 1,526.71 1,123.48 1,052.23 918.13
Missouri 1,001.83 1,218.33 953.29 1,035.07 1,123.06 1,317.10 1,540.79
Montana 1.47 1.51 1.47 4.20 25.62 27.41 67.32
Nebraska 40.21 41.46 45.84 48.24 85.17 82.25 84.68
Nevada 108.17 97.63 114.75 115.06 97.04 120.53 127.09
New Hampshire 47.38 49.21 47.72 49.00 39.49 40.61 96.24
New Jersey 5,599.65 5,468.81 5,421.15 5,440.42 4,791.18 4,277.82 3,610.80
New Mexico 58.33 60.40 58.68 106.09 51.72 46.93 29.14
New York 28,296.01 29,402.14 36,120.51 43,427.57 43,080.25 46,241.32 55,998.58
North Carolina 1,076.31 1,162.26 1,075.77 1,084.05 1,190.67 1,404.13 1,304.56
North Dakota 10.62 54.32 62.44 66.97 67.84 69.29 72.82
Ohio 934.62 1,121.12 1,188.30 1,175.29 1,425.91 1,405.36 1,490.99
Oklahoma 13.72 12.97 12.57 12.07 9.26 8.92 8.48
Oregon 68.84 63.66 84.17 95.15 97.45 114.28 131.74
Pennsylvania 3,675.79 3,644.13 3,936.15 4,110.33 3,470.70 3,278.05 3,542.12
South Carolina - 5.85 9.46 10.31 10.72 11.75 12.16
South Dakota 56.62 58.55 68.16 63.04 55.35 50.41 47.19
Tennessee 620.37 764.94 800.25 796.98 1,099.05 1,208.12 1,235.15
Texas 5,429.58 5,051.18 4,455.72 4,244.24 4,022.94 3,654.58 4,185.90
Utah 1,259.37 1,709.49 1,974.28 2,458.19 2,626.02 2,578.97 2,799.65
Vermont 24.38 24.46 35.41 32.66 41.74 45.31 47.96
Virginia 3,370.09 2,907.98 3,550.03 3,370.87 2,871.49 2,827.34 2,992.07
Washington 6,401.11 6,510.62 5,620.74 6,420.65 6,428.20 6,353.75 6,405.44
Wisconsin 571.44 590.79 870.91 882.44 854.64 956.78 1,089.01
Wyoming 5.80 - - - - - -

18
Data provided by
Capital Commitments:
Venture Fundraising
In 2018, 257 U.S. venture capital
funds closed on $54 billion in capital
U.S. VC Fundraising by Year
commitments. Last year’s capital raised Capital Raised ($B) 310
is the highest figure on record, and 2018 286
# of Funds Closed
marked the fifth consecutive year of $35 289
257
billion+ in fundraising. Venture fund sizes
255
reached a decade high with a median
and average size of $59 million and $185 203
191 188 216
million, respectively. Factoring into this
trend was Sequoia Capital’s Global Growth 183
165 150
Fund closing on $8 billion, earning the 155 155
title of largest venture fund on record.
119
Furthermore, 10 funds closed on $1 billion+
in 2018 and accounted for 41.86% of total
capital raised, compared to 3 funds of that
$17.4
$23.0
$33.4
$34.9
$31.5
$11.9
$19.9
$26.3
$24.4
$20.6
$35.3
$39.0
$41.1
$34.3
$53.8
size closing in 2017 and accounting for
20.76% of capital that year.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
The trend of larger funds has coincided with Source: NVCA 2019 Yearbook, Data Provided by PitchBook
the growth of first-time funds. In 2018, 52
first-time funds raised $5.3 billion, marking
the second consecutive year of 35+ first-
U.S. VC First-time Fundraising by Year
time funds closing. Whether these funds
have spun out of established firms or are Capital Raised ($B)
created by new managers, first-time funds 52
50
have been on the rise in recent years. Since 47 # of Funds Closed
2014, 193 first-time funds have raised more
43 39
than $15 billion. The prevalence of first-
time funds, many of which are smaller in
size, has made an impact on the number of 33
players and capital availability at the seed 35 31
29 27
and earlier stages of the venture investment 32
cycle. 28
24 23
VC funds based in 28 states held final 20
closes on venture funds in 2018, with
Indiana, Kansas, Montana, Alabama,
Kentucky, and Rhode Island all seeing funds
raised in 2018 after no disclosed venture
$1.9
$3.4
$3.0
$2.8
$2.9
$1.1
$1.0
$2.0
$1.6
$1.5
$1.9
$2.3
$2.5
$3.4
$5.3
funds raised capital in those states in 2017.

Funds based in California, New York, and 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
19
Data provided by
Massachusetts accounted for 62%, 17%, to investment figures in this report is not
and 13%, respectively, of total capital raised apples-to-apples. Why? 1) Firms generally
in the U.S. in 2018. The 92% collective do not deploy all of their capital into
fundraising share of these three states last startups in one year or in the year they
year represented a 15-year high, buoyed by close their fund; 2) The VC fundraising
the 10 largest funds closed in 2018 coming statistics only capture U.S. funds, whereas
from those states. VC funds outside the U.S. frequently
invest in U.S. startups. The VC investment
Outside of California, Massachusetts, and statistics are inclusive of investors
New York, median VC fund size reached headquartered outside the U.S.; and 3)
$25 million, a continued increase since There are increasingly more types of
2014, mirroring the overall increase in investors becoming active in the venture
U.S. VC fund sizes. Funds in those states, ecosystem. Most of these investors do not 2018 Top States by VC
however, still remain relatively small
compared to the dominant venture fund
invest in companies via venture funds, e.g.,
corporate venture groups, hedge funds,
Capital Raised
hubs – the median fund size for California, # of Capital Raised
mutual funds, sovereign wealth funds, and Funds ($M)
Massachusetts, and New York collectively family offices. An important takeaway from
was $100 million in 2018. this section is that U.S. venture funds have California 135 33,611.18
raised more than $200 billion since 2014 to New York 53 9,539.37
A note on the VC fundraising data before
put to work at startups across the country.
moving on to the VC investment data in
Massachusetts 23 7,233.86
the next section: comparing fundraising
Texas 11 797.43
Washington 5 712.36
Connecticut 4 487.10
10 Largest U.S. VC Funds in 2018 Illinois 7 457.60
Pennsylvania 3 403.96
Sequoia Capital
Sequoia Capital 8,000.00 9/6/18 California
Global Growth Virginia 4 351.59
Tiger Global Tiger Global Utah 4 187.05

3,750.00 10/15/18 New York
Management Private Investment
Missouri 1 184.40
Bessemer Venture Bessemer Venture
1,850.00 10/25/18 Massachusetts
Partners Partners X Indiana 4 132.65
Wisconsin 5 126.28
Norwest Venture Norwest Venture
1,500.00 2/14/18 California
Partners Partners XIV Maryland 3 69.88
District of 1 67.72
General Catalyst General Catalyst 1,375.00 3/26/18 Massachusetts
New Hampshire 3 56.13
GGV Capital GGV Capital VII 1,360.00 10/16/18 California

Colorado 4 45.20
NewView Capital Kansas 2 42.70

Newview Capital 1,350.00 12/3/18 California
Fund I
Oregon 2 40.35
Lightspeed Venture Lightspeed Venture Arizona 1 39.00

1,050.00 7/10/18 California
Partners Partners Select III
Montana 1 38.00
Florida 3 30.58
Thrive Capital
Thrive Capital 1,000.00 10/23/18 New York
Partners VI Michigan 2 26.70
New Jersey 1 25.00

Index Ventures Index Ventures
1,000.00 7/9/18 California
(UK) Growth V Alabama 1 25.00
Source: NVCA 2019 Yearbook, Data Provided by PitchBook Source: NVCA 2019 Yearbook, Data Provided by PitchBook
20
Data provided by
VC Fundraising by State by Year ($M)

2004 2005 2006 2007 2008 2009 2010 2011
Alabama 56.60 23.00 21.90 - 25.70 - - -
Arizona - - - - 20.00 - - 38.20
Arkansas - - - - - - - -
California 7,665.96 12,173.02 15,472.80 14,716.11 16,819.53 4,951.73 10,797.56 14,908.13
Colorado 80.00 25.00 22.33 420.80 111.94 - 328.00 -
Connecticut 1,946.00 795.01 3,605.00 45.00 650.00 25.00 1,200.70 15.00
Delaware - - 13.00 - - - 15.00 -
District of Columbia 475.10 - 200.00 828.00 380.00 - - 450.00
Florida 4.08 345.00 - 348.50 164.13 145.60 94.00 97.62
Georgia 54.70 3.50 215.00 255.10 138.00 155.00 293.21 -
Hawaii 3.00 - - - 1.78 - - -
Idaho - - - 75.00 - - - -
Illinois 149.00 150.00 370.52 818.19 877.91 273.39 479.62 717.02
Indiana 80.00 6.00 26.26 - - 10.00 90.00 -
Iowa - - - - - - - -
Kansas - - - - - - - 2.60
Kentucky - 20.10 36.44 - 175.00 - - -
Louisiana 175.52 50.00 70.00 28.00 60.00 70.00 56.00 -
Maine 160.00 - - 65.00 - - - -
Maryland 200.00 25.00 327.00 575.00 63.30 21.00 - -
Massachusetts 2,704.28 3,886.08 4,957.75 6,835.06 3,232.66 3,159.81 2,747.03 4,084.75
Michigan 84.70 - 20.00 65.00 910.00 254.30 41.40 182.65
Minnesota 49.80 275.00 398.00 331.00 475.10 30.00 - -
Missouri 43.00 66.00 - 210.20 128.90 10.00 2.00 -
Montana - - 1.75 - - - - -
Nebraska - - - - - - 2.60 37.30
Nevada - - - - 50.00 - - -
New Hampshire - - 50.00 - - - - -
New Jersey 212.90 1,176.80 1,063.00 895.22 9.00 516.00 250.00 500.00
New Mexico - 47.50 5.20 - - - 15.50 10.00
New York 808.59 1,839.37 3,403.59 5,047.21 1,374.55 759.40 2,318.44 4,486.14
North Carolina 38.30 232.00 340.00 40.25 83.00 102.00 - -
North Dakota - - - - 11.00 - - -
Ohio 266.30 18.92 100.00 15.50 126.12 23.70 66.00 24.61
Oklahoma - - 15.00 - - - - -
Oregon - - - 0.90 2.55 3.00 20.35 3.35
Pennsylvania 423.60 228.80 407.20 192.49 739.61 940.51 129.86 100.00
Rhode Island - - - - - - - -
South Carolina - - - - - - - -
South Dakota - 10.00 - - 32.48 - 16.00 -
Tennessee 50.00 83.30 54.00 40.00 89.70 14.00 74.24 22.00
Texas 768.70 268.15 892.08 103.30 1,221.75 5.10 175.54 455.10
Utah 97.10 - 129.20 352.00 186.60 160.00 66.35 33.00
Vermont - - - - 14.00 - 5.00 -
Virginia 123.70 564.05 478.00 297.00 331.84 274.58 441.00 110.00
Washington 708.90 722.17 540.45 2,291.00 2,902.89 2.50 5.00 -
Wisconsin - 10.73 171.50 - 57.78 - 201.51 40.00
21 Source: NVCA 2019 Yearbook, Data Provided by PitchBook

NVC A 2019 YE ARBOOK *For this table we give precedent to the fund location, but if unvailable, we use
the HQ location of the firm
Data provided by
2012 2013 2014 2015 2016 2017 2018
Alabama 5.00 - - - - - 25.00
Arizona 56.63 129.50 156.90 6.19 28.64 6.30 -
Arkansas - - 10.00 - 91.53 - -
California 13,815.81 9,572.14 21,532.02 20,590.66 25,935.22 20,763.10 33,174.18
Colorado 60.70 230.54 193.83 640.84 60.72 20.02 10.20
Connecticut 617.50 193.10 500.00 1.00 263.71 600.00 387.10
Delaware 4.90 - 26.00 2.38 - - -
District of Columbia 70.50 200.00 8.00 14.50 805.61 2,320.00 67.72
Florida 268.00 - 352.94 184.00 56.36 42.20 28.48
Georgia 50.00 114.70 40.31 262.00 48.00 111.00 -
Hawaii - - - - - - -
Idaho - - - - - - -
Illinois 240.00 268.55 500.58 574.02 943.03 457.85 435.91
Indiana 18.95 - 1.74 - - - 132.65
Iowa 3.00 1.80 - - - - -
Kansas - - - - 0.19 - 42.70
Kentucky 10.70 - - 5.55 - - 19.88
Louisiana 6.00 14.20 10.39 - - - -
Maine 10.14 - - 123.00 - 10.95 -
Maryland 145.00 213.04 82.18 81.15 0.81 56.00 69.88
Massachusetts 2,257.16 4,924.10 2,844.91 5,118.74 6,208.11 5,943.28 7,233.86
Michigan 45.16 73.01 26.31 306.30 407.50 50.50 26.70
Minnesota 150.00 107.36 - 5.50 - 36.15 -
Missouri 20.00 370.00 1.50 116.65 399.00 108.10 184.40
Montana - - - 2.75 21.13 - 38.00
Nebraska 18.21 - - 0.60 - 31.00 -
Nevada 50.00 - - - - 5.00 -
New Hampshire 4.50 - 1.00 7.67 - 1.73 56.13
New Jersey 349.00 10.00 18.60 - 552.47 52.00 25.00
New Mexico - - - - - - -
New York 4,920.45 1,682.74 7,278.51 6,048.85 2,898.88 2,321.40 9,375.87
North Carolina 2.50 215.00 35.60 32.10 205.20 273.00 21.15
North Dakota - 45.00 3.50 - - - -
Ohio 63.95 72.32 330.33 - 420.27 68.98 -
Oklahoma - - - - - - -
Oregon 7.76 5.80 7.68 17.51 8.50 16.15 28.05
Pennsylvania 298.00 171.59 212.71 235.00 59.00 111.20 303.96
Rhode Island - - - - - - 1.30
South Carolina - 6.00 3.42 - - - -
South Dakota - - - - - - -
Tennessee 180.00 103.00 2.50 - 380.00 126.01 8.00
Texas 31.18 523.85 469.01 166.94 87.45 90.80 777.43
Utah 131.88 570.88 151.86 245.20 397.55 53.00 187.05
Vermont - - 12.00 - - 11.30 -
Virginia 80.15 225.00 53.50 531.60 181.55 156.12 351.59
Washington 328.20 549.20 190.75 692.04 606.08 420.75 684.60
Wisconsin 116.43 5.10 217.68 0.62 29.70 83.10 125.48

22 *For this table we give precedent to the fund location, but if unavailable, we
NVC A 2019 YE ARBOOK use the HQ location of the firm
Data provided by
Capital Deployed:
Investment into
Companies
A historic 2018 for the U.S. venture
ecosystem was most notably marked by
U.S. VC Deal Flow
the record amount of capital invested into 10,740
10,575
companies. More than 8,380 venture- 9,200
Capital Invested ($B) 9,489
backed companies received $131 billion in 9,301
8,948
funding last year, eclipsing the $100 billion # of Deals Closed
7,882
watermark set at the height of the dot-com Company Count
boom in 2000. 6,759
Much of the capital influx was driven 5,409

4,727 4,487
by mega deals (i.e., investments of $100 4,319
million+ into venture-backed companies), 3,344
which accounted for nearly half (47%) of 2,965
2,633
total capital invested in 2018. Unicorns (i.e.,
venture-backed companies valued at $1
$131
billion+), many of which raised mega deals,
$22
$24
$29
$36
$37
$27
$31
$45
$42
$48
$71
$83
$77
$83
attracted $46 billion, or 35% of total capital
invested, but less than 2% of the total deals 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
completed in 2018. Source: NVCA 2019 Yearbook, Data Provided by PitchBook
U.S. VC Deal Flow by Stage (#)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Angel/Seed 458 787 918 1226 1723 2600 3532 4639 5472 5716 4585 4521 3760
Early VC 1750 2117 2260 1830 2101 2426 2584 2780 3067 3061 2849 3119 3156
Later VC 1136 1415 1549 1431 1585 1733 1766 1882 2034 1963 1766 1849 2032
23
Data provided by
Beneath the surface of large companies

2018 U.S. VC Deals by Stage ($B)
raising (and bringing the year to) record
venture funding was the continued trend of
fewer companies receiving capital – 2018
reached a six-year low. The dip was most 7.5
pronounced in angel/seed fundings and
first-time fundings though 2018 levels were
on par with pre-2014/2015 when company
count peaked.
41
The expansion of types of capital and pools 82.42
of capital in the venture ecosystem have
been major factors in a changing investment
landscape. As discussed in previous sections,
the ecosystem has seen large venture funds
raise larger follow-on funds; there has been
a rise of new (i.e., first-time) funds to the
market; and the majority of funds are small Angel/Seed Early VC Later VC
(i.e., less than $100 million). The latter two Source: NVCA 2019 Yearbook, Data Provided by PitchBook
have shifted the early stage investment
landscape. Furthermore, non-traditional
newer investors like SoftBank’s Vision Fund
and sovereign wealth funds have poured
capital into later stage companies and made
their mark on the ecosystem. This section
also uncovers the impact corporate venture
investors and growth equity investors have U.S. VC Unicorn Deal Activity by Year
had on venture investment activity.
182
Sectors Deal Value ($B)

146
163
The software sector continued to attract # of Deals Closed

139
the lion’s share of VC activity, comprising
125 118
36% of capital invested and 42% of deal
126
count in 2018. But in recent years, the life
112
sciences sector has seen significant growth,
with more than $23 billion invested across
91
1,230+ companies in 2018, a record high 66
73
for both metrics. The sector accounted for 53
18% of total capital invested and 15% of
all companies receiving venture funding in
2018. What’s more, pharmaceuticals and 31
$19.0
$22.0
$22.2
$18.9
$46.4
$8.9
$5.0
$6.8
biotechnology, healthcare services and

systems, and healthcare devices and supplies
were the only three major sectors to see 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
year-over-year increases in capital invested,
in addition to software.
24
Data provided by
Though software companies collectively in a startup by an institutional venture 2014 nonetheless.

garnered the largest amount of capital investor) continued to decline in 2018, the
invested in 2018, they only accounted for 2,040 companies raising first-time funding Charleston, SC, Richmond, VA, and
three of the ten largest venture investments. attracted a 15-year high of $10.1 billion. Indianapolis, IN saw the biggest annual
Consumer products and services (B2C) growth rate (i.e., compound annual growth
companies comprised six of the ten largest rate) for annual number of VC investments
deals last year, including Juul, Faraday
Geographical Spread over the past six years, for those MSAs
Future, Lyft, Uber, and Magic Leap. with at least 15 in 2018. Indianapolis, IN,
Venture funding reached startups in all 50
Columbus, OH, and New Haven, CT saw the
states and the District of Columbia, 222
largest annual growth for VC investment
Investment Stages & First- Metropolitan Statistical Areas (MSAs), and
393 Congressional Districts in 2018. Not
over the past five years, for those MSAs with
time Fundings surprisingly, companies headquartered in
at least $10 million VC investment in 2013
and 2018.
California, New York, and Massachusetts
The number of angel/seed VC investments
accounted for 59%, 11%, and 9%, Mirroring the U.S., global venture investment
returned to pre-2013 levels, with 3,760 deals
respectively, of overall U.S. venture capital activity also reached a record high last year,
completed representing 42% of total deals
investment last year. These three states when $254 billion was invested across
in 2018, the lowest absolute and relative
collectively accounted for 79% of total U.S. nearly 15,300 deals. U.S.-based companies
figures since 2012. After a slight cooling
venture dollars invested in 2018, a 15-year represented 51% global deal value and 58%
off in 2016, early stage and later stage VC
high in both relative and absolute terms, and of global deal count. In contrast, the U.S.
investments have increased the past two
53% of total U.S. venture deal count, less accounted for 84% of global VC dollars and
years in deal count in 2018 compared to
than a percentage point lower than 2017 76% of global deal count in 2004.
2017. Though the number of first-time
though a continued annual decline since
financings (i.e., first round of equity funding
2018 U.S. VC Deals by Sector ($B) *Other industry groups Commercial Banks
below: Insurance
Commercial Products Other Financial Services
Commercial Transportation
Commercial Services 5.40 IT Hardware 2.28 Other Healthcare
Other Business Products IT Services
and Services
Consumer Goods & Recreation 2.63 Media 1.37 Other Information
Consumer Durables Technology
Consumer Non-Durables Agriculture
Energy 1.75 Other 40.63 Services (Non-Financial) Chemicals and Gases
Transportation Construction (Non-Wood)
HC Devices & Supplies 5.87 Pharma & Biotech 17.38 Other Consumer Products Containers and Packaging
and Services
Forestry
HC Services & Systems 6.80 Software 46.82 Utilities
Metals, Minerals and
Other Energy Mining
Source: NVCA 2019Yearbook, Data Provided by PitchBook Capital Markets/ Textiles
Institutions
Other Materials
25
Data provided by
U.S. VC Deal Flow by State

Company # of Deals Capital
State
Count Closed Invested ($M)
California 2869 3063 77,297.63 Nevada 36 38 131.61
New York 981 1050 14,311.79 New Hampshire 27 32 127.61
Massachusetts 624 660 11,885.72 South Carolina 37 39 91.50
Washington 337 366 2,957.47 Kentucky 36 38 86.47
Texas 398 427 2,686.69 New Mexico 16 19 85.34
North Carolina 173 185 2,620.56 Iowa 27 34 84.99
Illinois 239 253 1,798.38 Rhode Island 23 23 56.78
Florida 212 234 1,735.20 Oklahoma 12 12 52.69
Colorado 258 283 1,635.91 Arkansas 28 28 46.49
Pennsylvania 250 267 1,496.75 Idaho 25 26 45.36
Maryland 131 142 1,375.32 Montana 12 12 44.58
Utah 101 106 1,165.25 Unknown state 19 19 43.78
Georgia 112 120 1,147.33 Vermont 22 24 36.57
Ohio 141 148 1,026.23 Alabama 21 22 30.73
Minnesota 117 121 786.47 Maine 22 24 28.06
Virginia 135 145 742.70 Nebraska 18 19 26.85
New Jersey 83 86 732.01 North Dakota 7 7 22.23
Connecticut 87 89 683.12 South Dakota 3 3 21.48
District of Columbia 59 62 676.15 Louisiana 9 9 18.47
Arizona 81 89 538.95 Hawaii 6 6 13.89
Oregon 98 100 527.90 Wyoming 5 5 12.12
Michigan 104 111 502.48 Mississippi 6 6 9.60
Indiana 88 93 367.74 West Virginia 2 2 7.75
Missouri 65 69 311.27 Alaska 3 3 3.73
Wisconsin 74 78 254.27 Puerto Rico 3 3 2.96
Tennessee 74 79 223.39 Virgin Islands 0 0
Kansas 20 21 164.18 Other US Territory 0 0
Delaware 47 48 144.72 Source: NVCA 2019 Yearbook, Data Provided by PitchBook
Top 10 U.S. VC Deals in 2018

Company Name Close Date Deal Size ($M) Deal Type Industry Sector State
Juul 12/20/18 12,800 Corporate Consumer Products and Services (B2C) California
Faraday Future 6/25/18 2,000 Corporate Consumer Products and Services (B2C) California
Lyft 3/14/18 1,700 Later Stage VC Consumer Products and Services (B2C) California
Epic Games 10/26/18 1,250 Later Stage VC Information Technology North Carolina
Uber 1/18/18 1,250 Later Stage VC Consumer Products and Services (B2C) California
Juul 7/10/18 1,235 Early Stage VC Consumer Products and Services (B2C) California
WeWork 8/9/18 1,000 Corporate Business Products and Services (B2B) New York
Magic Leap 3/7/18 963 Later Stage VC Consumer Products and Services (B2C) Florida
Instacart 10/1/18 871 Later Stage VC Information Technology California
Katerra 1/24/18 865 Later Stage VC Information Technology California
26
Data provided by
2018 VC Deals & Company Counts by State # of States Invested into by Investor HQ
Company Capital Invested % of Investor HQ State # of States Invested In
State % of Total
Count ($M) Total California 44
California 2869 34.22% 77,297.63 59.04% Illinois 37
New York 981 11.70% 14,311.79 10.93% New York 36

District of Columbia 32
Massachusetts 624 7.44% 11,885.72 9.08%
Massachusetts 32
Washington 337 4.02% 2,957.47 2.26%
Texas 31
Texas 398 4.75% 2,686.69 2.05%
Colorado 30
North Carolina 173 2.06% 2,620.56 2.00% Washington 30
Illinois 239 2.85% 1,798.38 1.37% Pennsylvania 29
Florida 212 2.53% 1,735.20 1.33% Maryland 27

Virginia 24
Colorado 258 3.08% 1,635.91 1.25%
Georgia 23
Pennsylvania 250 2.98% 1,496.75 1.14%
Connecticut 23
All Others 2042 24.36% 12,501.10 9.55%
Michigan 23
Total 8383 130,927.20 New Hampshire 23
Source: NVCA 2019 Yearbook, Data Provided by PitchBook Minnesota 23
Top 5 States by Percentage of 2018 Deals

Tennessee 22
New Jersey 22
Done in State Which Feature Investor(s) Florida 22
from Outside State Missouri 21
Investor HQ State % Invested Outside State North Carolina 19

Ohio 19
New Jersey 71%
Utah 18
District of Columbia 57% Indiana 18
New Hampshire 57% Kansas 17

Wisconsin 15
Georgia 55%
Nebraska 10
Tennessee 51% Alabama 10
Example of how to read this table: In 2018, 71% of deals done by New Jersey-based investors South Carolina 10
were investments into New Jersey-based companies.
Nevada 10
*This ranking is inclusive of states with 20 or more investments
Kentucky 10
Top 5 States by Percentage of 2018 Deals Arizona 10
Done in State which Feature Investor(s) Oregon 10
from that State

Company HQ State % Invested Within State
# of States California Investors Invested
California 77%
into by Year
Colorado 73% Year # of States Invested In
Pennsylvania 73% 2006 38
Michigan 71% 2012 46
Massachusetts 70% 2018 44

Example of how to read this table: In 2018, 77% of investments in California-based
companies featured at least one California-based investor.
*This ranking is inclusive of states with 20 or more investments
27
Data provided by
First-time Financings
U.S. First VC & Follow on US VC Deal Flow by Sector:
VC Deal Flow ($B) First Round VC in 2018
140
Sector # of Deals Closed Capital Raised ($M)
120 First Commercial
Follow-On 183 341.88
Services
100
Consumer Goods &
50 87.11
80 Recreation
$120.82
Energy 22 157.93
60
HC Devices &
$75.54
$73.98
68 288.87
$69.95
$63.44
40 Supplies
$40.34
$6.13 $38.61
$7.05 $34.46
$3.67 $18.00
$4.93 $18.66
$5.79 $23.44
$6.10 $29.91
$5.84 $31.10
$4.05 $23.12
$4.54 $26.74
HC Services &
20 132 532.53
$10.10
Systems
$7.20
$7.59
$9.00
$7.28
$7.41
0 IT Hardware 33 69.13
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Media 55 115.18
Other 583 1,959.27
U.S. First VC & Follow on VC Deal Flow Pharma & Biotech 143 3,252.65
(Company Counts) Software 854 3,298.60

12,000
First
Follow-On
10,000
8,000
6,726
6,251
5,309
6,380
6,000
6,103
6,343
4,276
3,620
4,000
3,044
2,715
2,595
2,437
1,218 1,889
961 1,760
2,000
797 1,635
3,513
3,336
3,271
3,045
2,650
2,664
2,612
2,040
1,935
1,636
1,571
1,552
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
28
Data provided by
Life Sciences
U.S. Life Sciences VC Deal Flow
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Capital Invested ($B) 7.36 9.62 9.29 7.92 7.79 8.76 8.68 9.92 12.19 14.90 12.60 16.57 23.25
# of Deals Closed 666 828 873 871 963 1,039 1,094 1,168 1,240 1,289 1,141 1,273 1,308
Company Count 625 772 801 799 882 957 1,003 1,078 1,151 1,196 1,092 1,202 1,238
U.S. Life Sciences VC Invested ($M) by Sector

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Biotechnology 1,311.20 1,737.73 1,313.50 1,885.03 2,176.25 2,013.65 2,079.41 2,278.14 3,214.35 5,217.03 5,113.08 8,064.88 11,456.05
Diagnostic
476.49 784.39 805.95 422.79 776.69 649.64 678.51 709.37 781.40 982.69 735.51 1,028.19 1,423.68
Equipment
Discovery Tools
24.37 119.66 69.70 112.52 66.06 76.85 11.56 95.28 46.81 66.97 74.50 13.64 97.72
(Healthcare)
Drug Delivery 262.98 471.37 559.67 235.31 167.17 499.79 403.12 425.99 352.46 488.87 213.45 404.03 408.81
Drug Discovery 1,082.06 1,414.83 1,243.32 1,284.72 1,073.35 1,295.27 1,856.32 2,493.45 3,357.86 4,206.09 3,108.81 2,837.14 4,967.58
Medical Supplies 250.99 296.57 175.61 95.58 116.35 158.93 293.22 132.79 88.85 41.41 105.87 137.24 191.61
Monitoring
253.97 216.92 306.74 183.99 174.89 337.68 292.55 465.60 1,231.25 439.44 426.45 526.63 739.44
Equipment
Other Devices
143.14 249.34 207.60 120.42 93.27 218.67 257.12 173.25 221.99 298.78 199.45 335.54 614.60
and Supplies
Other
Pharmaceuticals
57.82 87.24 135.75 64.76 126.39 69.92 70.12 15.63 56.39 52.04 18.58 11.13 63.01
and
Biotechnology
Pharmaceuticals 1,629.78 1,739.50 1,577.20 1,283.68 983.23 892.07 558.88 653.88 475.25 413.02 480.01 499.34 388.98
Surgical Devices 975.01 1,163.94 1,214.71 956.53 951.32 1,158.89 941.92 1,115.14 1,197.41 1,085.18 953.96 1,231.66 1,132.42
Therapeutic
887.19 1,341.97 1,681.51 1,276.36 1,086.50 1,384.80 1,235.49 1,365.03 1,170.90 1,610.99 1,173.24 1,484.90 1,768.72
Devices
29
Data provided by
U.S. Life Sciences VC Deal Count by Sector

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Biotechnology 124 164 157 183 217 220 260 295 337 355 366 449 434
Diagnostic Equipment 81 103 114 87 129 120 135 120 133 131 122 110 132
Discovery Tools
5 12 9 8 11 11 8 11 10 15 10 9 9
(Healthcare)
Drug Delivery 18 29 26 24 26 29 29 27 25 29 16 21 25
Drug Discovery 96 114 118 118 132 130 145 176 187 192 145 144 178
Medical Supplies 25 34 30 34 36 38 49 40 39 29 33 35 34
Monitoring Equipment 34 28 32 43 44 53 68 82 86 86 83 95 84
Other Devices and

26 29 37 47 43 68 61 63 77 90 71 93 90
Supplies
Other Pharmaceuticals
10 8 13 8 16 12 15 16 20 22 11 10 20
and Biotechnology
Pharmaceuticals 71 87 88 76 80 79 62 60 53 55 59 48 54
Surgical Devices 85 90 119 104 99 123 104 109 118 115 88 103 98
Therapeutic Devices 91 130 130 139 130 156 158 169 155 170 137 156 150
US VC activity (#) in life sciences

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Life Sciences Deal Count 666 828 873 871 963 1,039 1,094 1,168 1,240 1,289 1,141 1,273 1,308
Life Sciences as % of
19.92% 19.17% 18.47% 19.41% 17.80% 15.37% 13.88% 12.56% 11.73% 12.00% 12.40% 13.42% 14.62%
Total US VC (#)
Company count 3,344 4,319 4,727 4,487 5,409 6,759 7,882 9,301 10,573 10,740 9,200 9,489 8,948
US VC activity ($B) in life sciences

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Life Sciences Capital

7.36 9.62 9.29 7.92 7.79 8.76 8.68 9.92 12.19 14.90 12.60 17 23
Invested ($B)
Life Sciences as % of
33.95% 40.80% 31.79% 22.00% 21.09% 32.23% 27.75% 22.18% 29.38% 31.34% 17.74% 19.98% 30.11%
Total US VC ($)
30
Data provided by
Corporate Venture Capital

Corporate venture capital (CVC) investors proportion since 2006. 2018 also marked the aggregate size of deals with CVC participation
remained an important source of capital and sixth consecutive year where 1,000+ venture in 2017. What’s more, three of the ten largest
strategic guidance for startups in 2018. CVC investments had CVC participation. These venture investments in 2018 (including the top
investors participated in 1,443 venture deals 1,443 investments represented an aggregate two) were corporate deals.
last year, driving annual CVC participation to deal size (including non-CVC investors) of $67
16% of total VC deal count and the highest billion, a 15-year high and almost double the
U.S. Corporate VC Investment by Year
% of VC Average Median Median Average Average Median Median

# of VC Average % of VC Deals
Deals Deal Deal Deal Post Post Post Post Total CVC
# of All VC Deals Deal Total VC Capital with CVC
with CVC Value Value Value Valuation Valuation Valuation Valuation Capital
Deals with CVC Value (All Raised ($M) Involvement
Involvement (CVC, (All VC, (CVC, (All VC, (CVC, (All VC, (CVC, Raised ($M)
Involvement VC, $M) ($)
(#) $M) $M) $M) $M) $M) $M) $M)
2004 2,633 492 19% 8.7 13.7 5.3 9.6 34.2 46.6 20.8 31.5 21,662.5 6,447.8 30%
2005 2,965 493 17% 8.5 11.7 5.0 8.0 39.6 56.5 21.2 32.0 23,589.7 5,463.5 23%
2006 3,344 562 17% 9.4 16.6 5.0 10.0 45.5 66.4 22.6 40.0 29,226.1 8,890.9 30%
2007 4,319 659 15% 9.0 16.9 4.3 10.0 55.8 121.3 22.5 41.2 36,007.7 10,728.3 30%
2008 4,727 673 14% 8.4 15.3 3.8 8.6 55.5 77.8 21.2 37.1 36,936.7 9,740.9 26%
2009 4,487 475 11% 6.6 14.5 2.5 8.9 53.2 81.3 17.6 35.3 27,166.4 6,362.7 23%
2010 5,409 562 10% 6.3 15.3 2.0 8.0 58.5 90.4 17.4 33.9 31,274.2 8,000.5 26%
2011 6,759 716 11% 7.5 19.4 1.7 8.5 117.1 157.8 17.2 41.6 44,748.0 12,934.8 29%
2012 7,882 842 11% 5.9 14.8 1.5 7.0 58.4 102.4 16.1 37.0 41,506.6 11,624.1 28%
2013 9,301 1,081 12% 5.8 15.1 1.5 6.6 58.7 118.9 16.1 39.9 47,543.8 15,041.9 32%
2014 10,573 1,327 13% 7.7 21.5 1.5 7.6 109.9 214.1 17.6 44.4 71,031.6 26,315.6 37%
2015 10,740 1,460 14% 8.8 27.7 1.8 10.0 121.2 347.7 19.0 52.0 82,974.9 37,251.6 45%
2016 9,200 1,402 15% 9.4 28.5 2.0 10.0 125.0 339.1 20.0 45.8 77,229.8 36,300.7 47%
2017 9,489 1,427 15% 9.8 28.1 2.4 10.3 110.5 237.0 22.0 48.0 82,952.1 36,479.6 44%
2018 8,948 1,443 16% 16.2 50.0 3.0 14.4 243.5 494.4 32.9 67.7 130,927.2 66,844.6 51%
31
Data provided by
Growth Equity U.S. Growth Equity

Investments in 2018
by Sector (#)
Software
Growth equity* sits at the later end of the has a proven business model (established Pharma & Biotech
venture capital spectrum, filling a gap for product and/or technology and existing 9% Other
3%
mature companies that do not have a need customers); 2) company’s revenues are 2% Media
5% 40%
for early stage venture capital nor would a growing rapidly; 3) company is often cash IT Hardware
HC Services &
buyout by a private equity firm make sense flow positive, profitable or approaching 7%
Systems
for their growth. Growth equity can also meet profitability; 4) company is often founder- 3% HC Devices &
2%
Supplies
capital needs for larger later stage companies owned and / or managed; 5) investor is
Energy
staying private longer than historically was agnostic about control and purchases 22% 7% Consumer Goods &
the case. Some growth deals included in minority ownership positions more often Recreation
this section are also classified as VC deals than not; 6) industry investment mix is Commercial
Services
and included in the overall VC stats in this similar to that of earlier stage venture capital Source: NVCA 2019 Yearbook,
Yearbook; however, all growth deals are not investors; 7) capital is used for company Data Provided by PitchBook
since some may be classified differently in needs or shareholder liquidity; 8) additional

the PitchBook platform. More details on the financing rounds are not usually expected 1,057 growth equity investments last year,
growth equity critieria used in this section are until exit; 9) investments are often unlevered with both metrics reaching 15-year highs.
available on page 60. or use light leverage at purchase; and 10) Software companies—which comprised the
investment returns are primarily a function of largest share of growth equity activity—saw
As in recent editions of the Yearbook, NVCA— growth, not leverage, with a lower expected the biggest rise, with $28 billion raised across
through its Growth Equity Group—defines loss ratio than venture capital portfolios. 422 investments, representing year-over-
most growth equity investments as having year increases of 96% and 32%, respectively.
the following key characteristics: 1) company Growth equity investment in 2018 spiked Mirroring venture activity, California-based
after strong years from 2014 to 2017. companies accounted for the majority of
*Growth equity is not included as a subset of overall
VC data in this publication, but is rather its own unique Investors deployed $66 billion across growth equity investments – 38% of deal
dataset. More details on the methodology are on page count and 56% of capital invested.
[60].
U.S. Growth Equity Deal Flow by Year

$70 1,057 1,200
Deal Value ($B)

$60 964 1,000
# of Deals Closed
874
$50 930
841 800
$40 644
630
588 570 661
536 600
$30 465
366 400
$20 387
370
200
$10
$12.06
$11.65
$13.18
$18.69
$18.94
$11.22
$17.90
$23.63
$21.65
$21.63
$39.84
$45.88
$39.99
$43.00
$66.06
$0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
32
Data provided by
Exit Landscape:
Venture-backed IPOs &
M&As U.S. VC-backed IPOs by Year
$100 150
A healthy environment for venture-
backed exits is a critical component of 125
IPO Value ($B)
the venture lifecycle. Once successful $80 120
portfolio startups mature, venture funds # of IPOs Completed
generally exit their positions in those
companies by taking them public through 90 79
$60 87 85 90
81
an initial public offering (IPO) or by selling
them to presumably larger entities (via an 62
acquisition, merger, or trade sale) or to a $40 60
financial buyer (e.g., a private equity buyer). 60 62
58
This exit in the company allows the venture 41
43 44 43
firm to distribute the proceeds to investors,
$20 30
raise a new fund for future investment, and
$35.81
$24.51
$37.78
$91.25
$43.80
$43.48
$28.94
$49.67
$63.57
invest in the next generation of companies.
12 11
This section collectively refers to any type
$0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
U.S. IPOs by Year Source: NVCA 2019 Yearbook, Data Provided by PitchBook
# of VC Top 10 U.S. VC-backed IPOs in 2018

# of All IPOs Backed
IPOs Company Name Deal Size ($M) Industry Sector State
2006 296 60 Dropbox 7,473.96 Information Technology California

2007 370 90 Moderna
6,961.46 Healthcare Massachusetts
2008 170 12 Therapeutics
2009 102 11 DocuSign 3,945.45 Information Technology California
2010 204 41
Mercari 2,580.99 Information Technology California
2011 200 44
Elasticsearch 2,249.74 Information Technology California
2012 232 62
Tenable 1,844.13 Information Technology Maryland
2013 339 87
2014 384 125 Anaplan 1,804.44 Information Technology California
2015 261 79 Allogene 1,750.08 Healthcare California

2016 184 43
Zscaler 1,685.30 Information Technology California
2017 227 58
Pluralsight 1,669.13 Consumer Products and Utah
2018 213 85
33
Data provided by
of sale to a corporate entity or to a financial

buyer as a merger and acquisition (M&A).
Ratio of IPO Pre Valuation to Total VC Invested
IPO trends are analyzed separately. Total VC
Post Value Capital IPO Pre
Raised to Date Ratio
($B) Raised ($B) Value ($B)
In 2018, 85 venture-backed companies ($B)
went public, raising a collective $64 billion
2007 33.2 24.5 24.5 5.1 4.8
at IPO. Together, these 85 IPOs had a post-
money valuation of $75 billion, created 2008 2.8 2.3 2.3 0.4 5.8
from just $16 billion invested prior to IPO.
2009 9.6 7.8 7.8 0.8 9.9
The median size of IPOs in 2018 reached
$348 million and median IPO post-money 2010 15.7 12.3 12.3 4.5 2.8
valuation reached $443 million, both 15-
year highs. Companies that went public last 2011 43.3 37.8 37.8 6.5 5.8
year were younger than IPOs in prior years 2012 112.6 91.2 91.2 7.6 12.0
– the median time from first VC investment
to IPO was 4.8 years. 2013 52.7 43.8 43.8 10.3 4.2
2014 53.9 43.5 43.5 11.5 3.8

The strong IPO environment for venture-
backed companies was led by: cloud- 2015 39.1 28.9 28.9 8.7 3.3
based file storage provider Dropbox
(the largest IPO of 2018), drug discovery 2016 16.1 12.7 12.7 5.0 2.5
company Moderna Therapeutics (the 2017 58.9 49.7 49.7 9.5 5.2
largest biotechnology IPO on record), and
2018 74.8 63.6 63.6 15.8 4.0
U.S. VC Backed IPO Value and Age Characteristics

Median Average Average Median Time Average Time
Deal Value Post Value Median Post
# of IPOs Deal Value Deal Value Post Value from 1st VC from 1st VC to
($M) ($M) Value ($M)
($M) ($M) ($M) to Exit Exit
2007 90 24,510.3 248.8 310.3 33,169.3 330.2 409.5 5.18 5.60
2008 12 2,254.1 143.6 281.8 2,849.3 212.2 356.2 7.05 5.71
2009 11 7,838.8 317.1 783.9 9,624.2 387.1 962.4 7.32 7.50
2010 41 12,263.1 199.3 299.1 15,680.9 280.3 382.5 6.61 7.24
2011 44 37,779.4 331.2 944.5 43,322.7 423.6 1,083.1 5.81 6.73
2012 62 91,249.3 303.3 1,862.2 112,576.6 356.6 2,084.8 7.06 7.46
2013 87 43,804.5 240.0 554.5 52,707.3 320.7 635.0 6.68 7.21
2014 125 43,481.0 185.8 362.3 53,929.3 249.9 449.4 6.91 7.07
2015 79 28,941.1 222.0 402.0 39,122.3 302.5 535.9 6.96 6.42
2016 43 12,703.8 180.6 325.7 16,131.8 249.3 393.5 8.15 7.29
2017 58 49,667.6 336.6 955.1 58,877.4 434.0 1,132.3 7.08 6.84
2018 85 63,568.2 348.4 784.8 74,779.4 443.1 934.7 4.77 6.65
34
Data provided by
U.S. Venture-backed M&A Activity e-signature provider DocuSign. Seven of the

ten largest IPOs for U.S. venture-backed
$80 1,200 companies in 2018 hailed from California,
Deal Value ($B)
# of Acquisitions with the exception of Massachusetts-based
$70
# with Disclosed Values 1,000 Moderna Therapeutics, Maryland-based
953 941
Tenable, and Utah-based PluralSight.
$60 845 827
813 813
800 Software companies garnered 47% of 2018
$50 694 779
663 IPO value and 18% of IPO count in 2018,
$40 600 both on par with 2017. Pharmaceuticals
533
473 and biotechnology companies continued
475 469
$30 404 to attract the majority of IPOs, increasing
370 400 its share to 56% of IPO count, and gained
183 305 271
$20 234 250 250 ground on its overall share of IPO value,
175 180 145 232 258 253 236 211
199
200 reaching 35% (vs. 15% in 2017).
$10
$27.5
$19.3
$15.4
$21.4
$33.5
$15.7
$14.4
$29.3
$34.1
$28.9
$73.3
$43.3
$58.3
$42.3
$58.4
Venture-backed companies accounted
$0 0 for 40% of all U.S. IPOs in 2018, a 15-
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: NVCA 2019 Yearbook, Data Provided by PitchBook year high. The strong IPO environment,
relative to recent years, also increased
the share of all venture-backed exits via
U.S. VC Backed M&A Value and Age Characteristics IPO versus M&A to 11%, the highest since
2014. Despite a relatively solid 2018 for
Median Average
Mean Median venture-backed IPOs, larger structural
# with Time Time
# of Deal Value Deal Deal issues remain a challenge for the health
Disclosed from 1st from 1st
Acquisitions ($M) Value Value of U.S. public markets with what’s been a
Values VC to VC to
($M) ($M) longer-term decline in overall number of
Exit Exit
listed companies and venture-backed IPOs
2006 473 234 21,425.5 91.6 42.3 4.78 4.72 (more details on NVCA’s capital markets
reform public policy on page 44). And
2007 533 250 33,460.6 133.8 50.0 4.74 4.92 M&As continue to account for the majority
of venture-backed exits.
2008 475 180 15,746.0 87.5 34.4 4.75 4.97
2018 saw 779 M&As, and 199 M&As
2009 469 145 14,425.9 99.5 25.0 4.40 4.90 with disclosed values represented a total
of $58.4 billion in disclosed exit value.
2010 663 232 27,477.8 118.4 37.3 4.35 5.00
M&A exit count has been on the decline
2011 694 258 29,266.1 113.4 47.0 4.23 4.93 since 2015, but by exit value, 2018 was
the second highest in the past 15 years
2012 813 253 34,122.5 134.9 45.0 4.53 5.06 (after 2014). Accordingly, the median M&A
deal value also reached a 15-year high of
2013 813 250 28,949.4 115.8 37.2 3.85 4.98 $105 million in 2018. Companies that were
acquired or merged last year were older
2014 953 305 73,309.2 240.4 50.2 4.44 5.31 than in prior years, with a median age from
first venture funding to exit of 5.35 years.
2015 941 271 43,250.1 159.6 46.0 4.27 5.44
Software companies accounted for the
2016 845 236 58,271.7 246.9 76.5 4.58 5.73
majority (51%) of disclosed M&As by
value, followed by pharmaceuticals and
2017 827 211 42,292.0 200.4 81.0 5.28 6.19
biotechnology (21%). Microsoft’s $7.5
2018 779 199 58,441.8 293.7 105.0 5.35 6.34 billion acquisition of software development
35
Data provided by
platform GitHub ranked as the largest M&A

of the year. Three healthcare companies
Top 10 U.S. VC-backed M&A in 2018
rounded out the top ten largest M&As,
Company Name Deal Size ($M) Industry Sector State
and all but one company in the top ten was
headquartered in California, Massachusetts, GitHub 7,500.00 Information Technology California
or New York. Michigan-based internet Impact
security service provider Duo Security’s 7,000.00 Healthcare California
Biomedicines
$2.35 billion acquisition by Cisco Systems
was the lone M&A in the ten largest of Duo Security 2,350.00 Information Technology Michigan
2018 outside those three states. AppNexus 2,000.00 Information Technology New York
The optimism for venture-backed exits, Flatiron 1,900.00 Healthcare New York
particularly IPOs, that started 2018 came
to fruition (more so than the optimism that Adaptive Insights 1,600.00 Information Technology California
kicked off 2017). Public market volatility AlienVault 1,600.00 Information Technology California
at the end of 2018 and the government
Consumer Products and
shutdown in early 2019 were top of mind Ring 1,200.00 California
Services (B2C)
for the IPO outlook in 2019, but a slew of
high-profile IPO registrations and expected Consumer Products and
Glassdoor 1,200.00 California
2019 listings suggest the optimism Services (B2C)
continuing. Syntimmune 1,200.00 Healthcare Massachusetts
U.S. VC backed IPO Post Valuation by Range U.S. VC backed M&A by Range
(Company Count) (Company Count)
>$10B $1B-$10B $500M-$1B $100M-$500M <$100M >$1B $500M-$1B $100M-$500M <$100M
2006 - - 6 40 14 1 4 54 414
2007 - 5 14 55 16 2 11 78 442
2008 - 1 - 5 6 1 4 42 428
1 6 33 429
2009 - 2 2 6 1
1 11 65 586
2010 - 3 5 28 5
3 7 69 615
2011 1 7 9 19 8
6 7 81 719
2012 1 7 11 32 11
5 5 77 726
2013 1 9 12 49 16
10 15 100 828
2014 - 11 18 72 24
9 11 83 838
2015 - 9 14 36 20
9 18 80 738
2016 - 3 8 22 10
6 17 73 731
2017 1 13 10 24 10 11 11 87 670
2018 - 22 13 41 9 8 18 62 93
36
Data provided by
NVCA Year in Review

From opposing the government to support immigrant entrepreneurs to protecting startups and entrepreneurs in the new foreign investment
bill (FIRRMA) and regulations, 2018 was a busy year for NVCA representing the entrepreneurial ecosystem in Washington. NVCA also
continued to advance programs and initiatives to help address sexual harassment and diversity & inclusion in the VC industry. In addition,
NVCA convened the industry at our Leadership Gala, VCs-to-DC, policy conferences, LP Office Hours, and other events throughout the year.
Revisit NVCA’s highlights in our 2018 Year in Review timeline.
January 10: NVCA February 5: Stephanie March 13-14: The April 11: NVCA hosted May 9: NVCA filed June 20: NVCA hosted a
hosted the Annual Life Volk named VP of first annual Stanford/ an event on the 5G a court motion VC Leadership Breakfast
Science Investor Dinner Development for NVCA. NVCA VC Symposium Digital Ecosystem in San for discovery in its in Boston.
in San Francisco. took place in Palo Francisco. lawsuit against DHS
February 7: NVCA Alto—providing practical on the International June 25: NVCA hosted a
January 18: NVCA Chair unveiled updated Model education to VC April 12: NVCA Entrepreneur Rule. VC Leadership Dinner in
Scott Kupor testified Legal Documents professionals. recommended key Los Angeles.
to Senate on CFIUS addressing crypto- changes to the FIRRMA May 16: Alexis Borisy
legislation. currency and sexual March 15: NVCA foreign investment bill was appointed the new June 27: NVCA hosted
harassment & honored leaders in to protect investment in Chair of NVCA, and a Summer Party in
January 19: NVCA discrimination. the VC industry at its U.S. startups. seven new directors San Francisco for
hosted an ICO and annual Leadership Gala, joined the NVCA Board. the entrepreneurial
Blockchain webinar. February 8: NVCA and including giving out six April 26: NVCA & other ecosystem.
other organizations awards to exceptional organizations released May 16-17: NVCA
called on President individuals and firms in a report on how policy convened VCs and June 28: NVCA defended
Trump to maintain the industry. could encourage more policymakers in the International
the International public companies. Washington, D.C. at the Entrepreneur Rule in
Entrepreneur Rule. March 16: NVCA first annual VCs-to-DC comments to DHS.
released the 2018 event.
February 21: NVCA Yearbook, which
hosted an ICO & highlighted a busy 2017 May 25: NVCA strongly
Cryptocurrency Industry for NVCA and the VC opposed DHS’s
Vertical event in San industry. proposal to rescind
Francisco. the International
Entrepreneur Rule.
February 22: NVCA
unveiled resources to
help address sexual
harassment in the
venture ecosystem.
2018 NVCA Leadership Gala awards VCs-to-DC keynote speaker Kevin McCarthy
37
Emerging Technology Meets National Security Lunch Strategic Operations & Policy Summit Panel
July 17: NVCA hosted August 22: NVCA September 5: NVCA October 1: Cassie Ann November 9: NVCA December 4: NVCA held
its first LP Office Hours hosted a dinner for next hosted a webinar on the Hodges named Director hosted a Members- an event on what VCs
event in Palo Alto to generation VCs in San FIRRMA legislation and of Communications for Only webinar providing and Startups should
connect diverse new Francisco with featured its implications for the NVCA. analysis on the 2018 know about recent
VC investors with speaker Jon Callaghan of VC industry. Midterm election. changes in Foreign
experienced GPs and True Ventures. October 2: NVCA hosted Investment Review.
LPs. September 10: NVCA a webinar on Privacy and November 13: NVCA
August 28: NVCA and launched the first in its Cybersecurity. hosted its second LP December 5: NVCA-
July 17: NVCA cheered Citi Ventures co-hosted ‘Spotlight on Rising Stars Office Hours event in WAVC Annual December
the overwhelming House a Regulatory Roundtable in VC’ blog series. October 16: Boston. Luncheon in Menlo Park.
passage of the JOBS and in San Francisco focused NVCA hosted the
Investor Confidence Act. on automation and September 27: NVCA 2018 Strategic November 14: NVCA
workforce development. cheered House passage Communications Summit hosted the first
of the American in San Francisco. Emerging Technology
Innovation Act of 2018, Meets National Security
which included NOL October 17: NVCA filed conference to bring
Reform for startups. a comment letter on the together emerging
Volcker Rule, proposing tech and D.C. security
solutions to allow banks agencies.
to invest in VC funds
again. November 27: NVCA
hosted an event on
October 18: NVCA building your personal
recommended Volcker brand as a woman in VC.
Rule Reforms to
encourage investment November 29:
into U.S. startups to NVCA submitted
several government recommendations to
agencies. the SEC on how it could
modernize the definition
October 24-25: NVCA of “venture capital fund”
held the Strategic for ERA/RIA purposes.
Operations & Policy
Summit for CFOs and
senior operations
professionals at VC firms.
October 25: NVCA

hosted its annual Impact
Investor Reception in
San Francisco.
VCs-to-DC attendees
38
Looking Ahead: NVCA’s 9 for 2019 Data provided by
9 FOR 2019
Here is a snapshot of NVCA’s top priorities as we look ahead into 2019. To see the full breath of what NVCA is up to this year, visit nvca.org.
1 2
Data & the Pitchbook-NVCA Foreign Investment Scrutiny and VC

Venture Monitor The FIRRMA legislation that was signed into law in 2018 is
now being implemented, which is creating new challenges
Jointly produced by NVCA and PitchBook, the PitchBook-
for VCs with foreign LPs and co-investors, and for portfolio
NVCA Venture Monitor serves as the authoritative quarterly
companies looking for financing from foreign investors.
report on venture capital activity in the entrepreneurial
NVCA was very involved in the legislative process around
ecosystem. The Venture Monitor provides a complete
FIRRMA, and now we’re advocating heavily on behalf of
look at venture capital activity, reporting on fundraising,
the industry during the ongoing regulatory process, which
investments, exits, and other relevant industry analysis in
implements the law. We’re also trying to make it easier
one comprehensive report each quarter. We look forward
for VCs and portfolio companies to navigate these new
to continuing to provide flagship data for the VC industry to
challenges by updating our model legal documents with
American entrepreneurs across the country.
foreign investment related language.
39
Data provided by
3 4
Modernizing the Definition of VC Tax Policy to Encourage

We want to update the ERA/RIA definition so that New Company Formation
a VC looking to make investments into secondaries,
The 2018 Midterm Elections brought changes in
cryptocurrencies, or investing into another fund doesn’t
Washington, and in state capitals, that will change the way
have to change their SEC registration from an ERA to
tax policy is debated across the country. It is our job in D.C.
an RIA. This will allow VCs to invest more into portfolio
to educate policymakers that tax policy should encourage
companies.
entrepreneurship and new company formation.
5 6
Reform the Volcker Rule Engage NVCA Working Groups

Before the Volcker Rule passed, regional banks used to It’s very important for us at NVCA to understand what’s
help capital formation for VC investors in the Midwest important to the VC community. Therefore, we have several
and other parts of the middle of the country, supporting dynamic working groups on a variety of issues. This year,
investment into startups in those regions. The Volcker Rule we have two new working groups. One is a regional working
has made it much more difficult to support entrepreneurs group to help address issues for VC funds in emerging
in the middle of the country. We’re working hard with ecosystems outside of the traditional epicenters of venture
policymakers and regulators to ensure that banks can once capital. The second is a blockchain working group so that
again be an important source of capital for entrepreneurs. we can understand from those making investments into
cryptocurrencies and blockchain technologies what’s
important for NVCA to focus on, and what we should
advise policymakers on what they should and shouldn’t do.
40
7 8
Diversity & Inclusion VC Education

(VentureForward) We’re putting on the 2nd Annual Stanford/NVCA Venture
Capital Symposium this March in Palo Alto, where leaders
This year, we are continuing our LP Office Hours program,
in the industry get the latest on what they need to know,
which brings together experienced LPs and GPs to give
so that they can bring that knowledge back to their firms
expert advice to new diverse investors who are trying
and portfolio companies. We also recently announced our
to get into the VC industry. We are also releasing the
new partnership with the University of California,
second NVCA-Deloitte Human Capital Survey, which will
Berkeley, called VC University, which is designed for
help measure the state of the VC industry and how it has
new entrants to the VC industry. These are both part of
changed since the last Human Capital Survey from 2016.
our efforts to help support VCs across the country with
education and resources.
9 New NVCA Website

This year, we’re going to update our website to ensure
that it is more member-friendly and that members of the
entrepreneurial ecosystem can find the information they
need to know. The new website will also be an easier place
for policymakers and their staff to find out more about how
VCs are working with portfolio companies to build the next
great American companies.
Dataprovided
Data providedby
by
Shape the future of

the venture industry
with NVCA
ADVOCACY COMMUNIT Y & EDUCATION RESEARCH
JOIN US!
Please contact NVCA with your

membership queries
[email protected]
202.864.5918
42
42
38
NVC A
NVC A 2019
2019 YE
YE ARBOOK
ARBOOK
Data provided by
NVCA 2019 Calendar

of Programs & Events
NVCA’s expanded 2019 events include a brand-new program with UC Berkeley featuring digital and in-person venture curriculum and
regional VC leadership dinners in San Francisco, LA, Boston, Seattle, and D.C.! Join us in-person or via machine at one of our upcoming
events.
Contact [email protected] to learn more or if you are interested in sponsorship, speaking opportunities, or partnering on an event.
2019 EVENTS* LA Leadership Dinner

March 28
PitchBook/NVCA 2Q
Venture Monitor Webinar
Life Science Investor Reception Los Angeles, CA July 30
January 10 Online webinar
Members Only Happy Hour
San Francisco, CA
April 25 Washington, D.C. Leadership Dinner
San Diego Leadership Dinner San Francisco, CA September 11
January 16 Washington, DC
Chicago Leadership Dinner
San Diego, CA
April 30 VC University LIVE with the A. B. Freeman
Dallas Leadership Dinner Chicago, IL School of Business at Tulane University
January 23 September 19-21
PitchBook/NVCA 1Q
Dallas, TX New Orleans, LA
Venture Monitor Webinar
Seattle Leadership Dinner April 30 Strategic Operations & Policy Summit
January 31 Online webinar October 24-25
Seattle, WA Washington, DC
VC StratComm Live: Becoming
Members-Only Policy Briefing a Content Champion New York Leadership Dinner
February 27 May 2 November 6
San Francisco, CA Boston, MA New York, NY
Leadership Gala Boston Leadership Dinner Annual December Luncheon
February 27 May 15 December 4
San Francisco, CA Boston, MA Bay Area
VC University Online Certificate Program VC University LIVE with the University of *Subject to change. Additional events to be
March 22 application deadline for Michigan Ross School of Business added!
April 1 cohort. Additional cohorts in May 15-17
fall and winter 2019. Ann Arbor, MI
Bay Area Leadership Dinner Regional VC Fund Leadership Dinner
March 25 June 4
Palo Alto, CA Washington, DC
Venture Capital Symposium VCs-to-DC
March 26-27 June 5-6
Palo Alto, CA Washington, DC Hannah Munizza
Allyson Chappell
Growth Equity Group West Coast Dinner LP Office Hours Director of Director of Business
March 28 Conferences and Development and
June 6 Events Marketing
San Francisco, CA Washington, DC [email protected] [email protected]
43
Data provided by
2019 NVCA Public

Policy Initiatives
The results of the 2018 mid-term election bring a new balance of power in Congress and will dictate the policy and political landscape
over the next two years. NVCA will remain engaged with policymakers and regulators to ensure the voice of VCs and startups is heard in
Washington. Below are key policy initiatives for NVCA in 2019 and a brief description on the current state-of-play.
Reopening the Public Medical Innovation Encouraging Talented

Markets to Growth Venture is partnering with startups to Immigrants to Found
Companies discover groundbreaking treatments
and cures for the most deadly and costly
and Build Startups
The U.S. has about half the total number of diseases. NVCA supports policies that Immigrant entrepreneurs have made
public companies than it did twenty years streamline the regulatory approval incredible contributions to the U.S.
ago, in no small part because of a lack of process at the FDA—particularly for novel economy, with one-third of U.S. venture-
IPOs since 2000. A priority for NVCA is to technologies—as well as the reimbursement backed companies that went public
make the public markets more attractive to process at the Centers for Medicare and between 2006 and 2012 having at least
venture-backed companies by building off Medicaid. Steady funding and process one immigrant founder. But their true
the success of the JOBS Act. Among the improvements at these agencies are potential has not been realized because of
proposals NVCA is advocating for include critical to encouraging investors to take the lack of a reliable immigration category.
making Emerging Growth Company (EGC) the long-term risk of pursuing new medical NVCA continues to be the leading advocate
status more attractive, requiring disclosure innovations that will save and improve for policies that will allow immigrant
of short positions, and encouraging small patients’ lives. NVCA will also continue entrepreneurs to build startups in the U.S.
cap liquidity and research. Reforms which to ensure venture’s voice is heard as and create American jobs, particularly
encourage a more robust IPO environment policymakers work to reduce the price of through a ‘startup visa’ that allows the
will create economic growth by providing prescription drugs. Making drugs affordable world’s top entrepreneurs to launch new
opportunities for startups and small cap for all Americans is important, but reforms enterprises in the U.S., and under the
companies to grow as public companies. should be sensitive to the current policy International Entrepreneur Rule that was
balance in the U.S. that has made our the subject of a successful lawsuit NVCA
country the world leader in life-saving drug filed against the federal government.
development.
44
Data provided by
Protecting Patents Regulatory Reforms for a Supporting Tax Policy

for Startups Healthier Entrepreneurial that Encourages New
NVCA advocates for ways to address Ecosystem Company Formation
abusive patent litigation, while preserving
NVCA advocates for regulatory reforms NVCA supports tax policy that encourages
access to the patent system for startups.
that will lead to a healthier entrepreneurial patient, long-term investment and new
Startups are often victimized by ‘patent
ecosystem. A current priority proposes company formation. In 2019, we are
trolls,’ but efforts in recent years to crack
modifying the definition of a venture advocating for a pro-entrepreneurship tax
down on these entities would have had
capital fund at the Securities and Exchange agenda with proposals such as increasing
their most severe impact on venture-
Commission for purposes of determining the value of the R&D credit to startups,
backed startups. NVCA believes abusive
fund registration. Our proposal includes simplifying QSBS rules, and creating a safe
patent litigation practices must be solved
making the following investments harbor for startups from Section 382 loss
so as not to deter investment in patent-
qualifying: secondary investments in limitation rules. We will continue working to
reliant startups, but we must be mindful
Emerging Growth Companies, fund of ensure that the new tax law is implemented
not to create unintended consequences
funds investments in other VC funds, and in a way that supports startups and
that would reduce the value of patents
cryptocurrency investments. NVCA also entrepreneurship, as well as advocating
to startups and pose a threat to the
continues to advocate for reforms to the against any proposals to increase taxes on
entrepreneurial ecosystem.
Volcker Rule to allow bank investment into carried interest capital gains.
venture capital funds.
Vigilance on Modernization Basic Research and Technology Policy

of Foreign Investment Laws Technology Transfer for Startups
Venture capital funds with foreign limited A foundation to ensuring a robust NVCA supports policies that spur
partners, foreign co-investors, and startups entrepreneurial ecosystem is a strong federal technology startup activity including easing
considering taking foreign investment have commitment to basic research funding regulatory burdens, reforming government
been impacted by a recent law that expands and a system to effectively commercialize procurement laws, and freeing additional
the mandate of the Committee on Foreign innovation. NVCA supports a return to our spectrum for innovative products. In 2019,
Investment in the U.S. (CFIUS). Last year, historical leadership position of federally NVCA will engage on privacy policy to
NVCA fought during the legislative process funded basic research activity by committing ensure that legislation and regulation in this
to protect passive investment into venture to a sustained annual growth in funding of at space does not harm young, high-growth
funds from foreign LPs, and this issue remains least four percent. In addition, we can make companies as policymakers work to address
a high priority in 2019 as the Treasury and more efficient use of today’s basic research harm by large companies.
Commerce departments implement the new dollars by encouraging support for key federal
law through the rulemaking process. These commercialization programs such as SBIR,
rulemakings are especially significant because STTR, and I-Corps.
key terms (such as ‘emerging technologies’)
must be defined that will affect how the
statute affects the startup ecosystem.
Charlotte Savercool Jeff Farrah Justin Field

Director of General Counsel Senior Vice
Government Affairs [email protected] President of
[email protected] Government Affairs
[email protected]
45
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Our Vibrant Member

Community
Join NVCA’s dynamic How does NVCA help you succeed?
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NVCA empowers the next generation of
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trade association, NVCA arms the venture Geographic distribution of NVCA Members
community for success, serving as the leading
resource for venture capital data, practical
2%
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10%
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A look at NVCA Members by AUM
5% $1M - $4.9M
17%
$5M - $99M
27% $100M - $199M

5%
$200M - $999M
3%
$1B - $1.999B
10%
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press
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How to become a member
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Stephanie Volk
Vice President of
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[email protected]
47
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Glossary
The following definitions are graciously provided by the Center for Private Equity and Venture Capital at the Tuck School of Business at
Dartmouth (cpevc.tuck.dartmouth.edu). Used by permission. NVCA and PitchBook are grateful to the Center for its support. Definitions
of terms related to early stage financing have been revised since last year’s edition to reflect the emergence in recent years of the Series
Seed round as a separately named series of preferred stock between friends and family financings and Series A financing.
“A” round (“Series A”) – formerly the first Alternative asset class – a class of “B” round (“Series B”) – a financing
“institutional” capital raised by a Company, investments that includes venture capital, event whereby investors such as venture
the “A” round is now typically the second leverage buyouts, hedge funds, real estate, capitalists and organized angel groups that
institutional round of financing for a young and oil and gas, but excludes publicly are sufficiently interested in a company
company where venture capitalists are traded securities. Pension plans, college provide additional funds after the “A” round
sufficiently interested in a company to endowments and other relatively large of financing. Subsequent rounds are called
invest a larger amount of capital after the institutional investors typically allocate a “C”, “D” and so on.
“Seed” round to fund the company to the certain percentage of their investments
next stage of its development. Subsequent to alternative assets with an objective to Basis point (“bp”) – one one-hundredth
rounds of financing are called “B”, “C”, “D”, etc. diversify their portfolios. (1/100) of a percentage unit. For example,
50 basis points equals one half of one
Accredited investor – a person or Angel – a wealthy individual who invests percent. Banks quote variable loan rates
legal entity, such as a company or trust in companies in relatively early stages of in terms of an index plus a margin and the
fund, that meets certain net worth and development. margin is often described in basis points,
income qualifications and is considered such as LIBOR plus 400 basis points (or, as
to be sufficiently sophisticated to make Angel Groups – groups of individual angels the experts say, “bips”).
investment decisions in private offerings. who invest together, individually or through
Regulation D of the Securities Act of a pooled vehicle, enabling them to share Beta – a measure of volatility of a public
1933 exempts accredited investors from deal flow with each other. stock relative to an index or a composite
protection of the Securities Act. The of all stocks in a market or geographical
Anti-dilution – a contract clause that region. A beta of more than one indicates
Securities and Exchange Commission
protects an investor from a substantial the stock has higher volatility than the
has proposed revisions to the accredited
reduction in percentage ownership in index (or composite) and a beta of one
investor qualifying rules, which may or may
a company due to the issuance by the indicates volatility equivalent to the index
not result in changes for venture investors.
company of additional shares to other (or composite). For example, the price of a
The current criteria for a natural person
entities. The mechanism for making an stock with a beta of 1.5 will change by 1.5%
are: $1 million net worth (excluding the
adjustment that maintains the same if the index value changes by 1%. Typically,
value of a primary residence) or annual
percentage ownership is called a Full the S&P 500 index is used in calculating the
income exceeding $200,000 individually or
Ratchet. The most commonly used beta of a stock.
$300,000 with a spouse. Directors, general
adjustment provides partial protection and
partners and executive officers of the issuer
is called Weighted Average. Beta product – a product that is being
are considered to be accredited investors.
tested by potential customers prior to being
See Rule 501 of Regulation D of the SEC for ASC Topic 820 – FASB Accounting formally launched into the marketplace.
current details. Standards Codification (ASC) Topic
820 (formerly known as FAS 157) is the Blockchain – a distributed ledger that
Alpha – a term derived from statistics and
accounting standard that dictates how to uses advanced cryptography to create
finance theory that is used to describe
measure and disclose fair value for financial a “chain” of “blocks” of information that
the return produced by a fund manager in
reporting purposes. FASB ASC Topic 946 are unalterable and verifiable. Useful for
excess of the return of a benchmark index.
(Investment Companies) dictates that all recording any number of transactions
Manager returns and benchmark returns
investments should be reported at fair or sets of data in a verifiable way that is
are measured net of the risk-free rate. In
value. extremely difficult to modify.
addition, manager returns are adjusted for
the risk of the manager’s portfolio relative
to the risk of the benchmark index. Alpha is
a proxy for manager skill.
48
Data provided by
Board of directors – a group of individuals, Business Development Company (BDC) – a Capital call – when a private equity fund
typically composed of managers, investors publicly traded company that invests in manager (usually a “general partner” in a
and experts who have a fiduciary private companies and is required by law to partnership) requests that an investor in the
responsibility for the well-being and proper provide meaningful support and assistance fund (a “limited partner”) provide previously
guidance of a corporation. The board is to its portfolio companies. committed capital. Usually a limited partner
typically elected by the shareholders. will agree to a maximum investment amount
Business plan – a document that describes and the general partner will make a series of
Book – see Private placement a new concept for a business opportunity. capital calls over time to the limited partner
memorandum. A business plan typically includes the as opportunities arise to finance startups
following sections: executive summary, and buyouts.
Bootstrapping – the actions of a startup market need, solution, technology,
to minimize expenses and build cash flow, competition, marketing, management, Capital gap – the difficulty faced by some
thereby reducing or eliminating the need operations, exit strategy, and financials entrepreneurs in trying to raise between $2
for outside investors. (including cash flow projections). For most million and $5 million. Friends, family and
venture capital funds, fewer than 10 of angel investors are typically good sources
Bp – see Basis point.
every 100 business plans eventually receive for financing rounds of less than $2 million,
Bridge financing – temporary funding that funding. while many venture capital funds have
will eventually be replaced by permanent become so large that investments in this
Buyout – a sector of the private equity size range are difficult.
capital from equity investors or debt
industry. Also, the purchase of a controlling
lenders. In venture capital, a bridge is
interest of a company by an outside Capitalization table (or Cap Table) – a
usually a short term note (6 to 12 months)
investor using substantial debt (in a table showing the owners of a company’s
that converts to preferred stock. Typically,
leveraged buyout) or a management team shares and their ownership percentages
the bridge lender has the right to convert
(in a management buyout). as well as the debt holders. It also lists the
the note to preferred stock at a price that is
forms of ownership, such as common stock,
a 20% to 25% discount from the price of the Buy-sell agreement – a contract that preferred stock, warrants, options, senior
preferred stock in the next financing round. sets forth the conditions under which debt, and subordinated debt.
See Mezzanine and Wipeout bridge. a shareholder must first offer his or her
shares for sale to the other shareholders Capital gains – a tax classification of
Broad-based weighted average anti-
before being allowed to sell to entities investment earnings resulting from the
dilution – A weighted average anti-dilution
outside the company. purchase and sale of assets. Typically, a
method adjusts downward the price per
company’s investors and founders have
share of the preferred stock of investor A C Corporation – an ownership structure earnings classified as long term capital gains
due to the issuance of new preferred shares that allows any number of individuals or (held for a year or longer), which are often
to new investor B at a price lower than the companies to own shares. A C corporation taxed at a lower rate than ordinary income.
price investor A originally received. Investor is a stand-alone legal entity so it offers
A’s preferred stock is repriced to a weighted some protection to its owners, managers Capital stock – a description of stock that
average of investor A’s price and investor and investors from liability resulting from applies when there is only one class of
B’s price. A broad-based anti-dilution its actions. shares. This class is known as “common
method uses all common stock outstanding stock”.
on a fully diluted basis (including all Capital Asset Pricing Model (CAPM) – a
convertible securities, warrants and method of estimating the cost of equity
options) in the denominator of the formula capital of a company. The cost of equity
for determining the new weighted average capital is equal to the return of a risk-free
price. See Narrow-based weighted average investment plus a premium that reflects the
anti-dilution. risk of the company’s equity.
Burn rate – the rate at which a startup uses

available cash to cover expenses in excess
of revenue. Usually expressed on a monthly
or weekly basis.
49
Data provided by
Capital Under Management – A frequently Co-investment – the direct investment by a Convertible preferred stock – a type of
used metric for sizing total funds managed limited partner alongside a general partner stock that gives an owner the right to
by a venture capital or private equity in a portfolio company. convert preferred shares to common shares
firm. In practice, there are several ways of of stock. Usually, preferred stock has
calculating this. In the US, this is the total Collateral – hard assets of the borrower, certain rights that common stock doesn’t
committed capital for all funds managed such as real estate or equipment, for which have, such as decision-making management
by a firm on which it collects management a lender has a legal interest until a loan control, a promised return on investment
fees. This calculation ignores whether obligation is fully paid off. (dividend), or senior priority in receiving
portions of the committed capital have not proceeds from a sale or liquidation of the
Commitment – an obligation, typically the
yet been called and whether portions of the company. Typically, convertible preferred
maximum amount that a limited partner
fund have been liquidated and distributed. stock automatically converts to common
agrees to invest in a fund. See Capital call.
It typically does not include aging funds stock if the company makes an initial public
in their “out years” on which fees are not Common stock – a type of security offering (IPO). Convertible preferred is the
being collected. For purposes of this book representing ownership rights in a most common tool for private equity funds
in calculating capital managed in figure company. Usually, company founders, to invest in companies.
1.04, because direct data is not available, management and employees own common
the last eight vintage years of capital Co-sale right – a contractual right of an
stock while outside investors own preferred
commitments is considered a proxy for the investor to sell some of the investor’s
stock. In the event of a liquidation of
industry’s total capital under management. stock along with the founder’s or majority
the company, the claims of secured and
shareholder’s stock if either the founder or
unsecured creditors, bondholders and
Capped participating preferred stock majority shareholder elects to sell stock to a
preferred stockholders take precedence
– preferred stock whose participating third-party. Also known as Tag-along right.
over common stockholders. See Preferred
feature is limited so that an investor cannot
stock. Cost of capital – see weighted average cost
receive more than a specified amount. See
Participating preferred stock. of capital (WACC).
Comparable – a private or public company
with similar characteristics to a private or Cost of revenue – the expenses generated
Carried interest capital gains – the share
public company that is being valued. For by the core operations delivering the
in the capital gains of a venture capital
example, a telecommunications equipment product or services of a company.
fund which is allocated to the General
manufacturer whose market value is 2
Partner. Typically, a fund must return the
times revenues can be used to estimate Covenant – a legal promise to do or not do
capital given to it by limited partners plus
the value of a similar and relatively new a certain thing. For example, in a financing
any preferential rate of return before the
company with a new product in the same arrangement, company management may
general partner can share in the profits of
industry. See Liquidity discount. agree to a negative covenant, whereby it
the fund. The general partner will typically
promises not to incur additional debt. The
receive a 20% carried interest, although Control – the authority of an individual or penalties for violation of a covenant may
some successful firms receive 25%-30%. entity that owns more than 50% of equity vary from repairing the mistake to losing
Also known as “carry” or “promote.” in a company or owns the largest block of control of the company.
shares compared to other shareholders.
Clawback – a clause in the agreement
Control can also be granted through special Coverage ratio – describes a company’s
between the general partner and the
voting rights and protective provisions in a ability to pay debt from cash flow or profits.
limited partners of a private equity fund.
company’s organizing documents. Typical measures are EBITDA/Interest,
The clawback gives limited partners the
(EBITDA minus Capital Expenditures)/
right to reclaim a portion of disbursements Consolidation – see Rollup. Interest, and EBIT/Interest.
to a general partner for profitable
investments based on significant losses Conversion – the right of an investor or Cram down round – a financing event upon
from later investments in a portfolio. lender to force a company to replace the which new investors with substantial capital
investor’s preferred shares or the lender’s are able to demand and receive contractual
Closing – the conclusion of a financing debt with common shares at a preset terms that effectively cause the issuance
round whereby all necessary legal conversion ratio. A conversion feature was of sufficient new shares by the startup
documents are signed and capital has been first used in railroad bonds in the 1800’s. company to significantly reduce (“dilute”)
transferred.
the ownership percentage of previous
Convertible debt – a loan that allows the
investors.
lender to exchange the debt for common
shares in a company at a preset conversion
ratio. Also known as a “convertible note.”
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Data provided by
Cryptocurrency – a natively-digital Dilution – the reduction in the ownership Drag-along rights – the contractual right of
currency using encryption techniques to percentage of current investors, founders an investor in a company to force all other
regulate the creation of units of currency and employees caused by the issuance of investors to agree to a specific action, such
and verify transfer of funds. Usually created new shares (for example to investors in as the sale of the company.
and managed independently of a central follow on rounds, , employees by increasing
bank. the stock option pool, debt providers in the Drawdown schedule – an estimate of the
form or warrants, etc.). gradual transfer of committed investment
Cumulative dividends – the owner of funds from the limited partners of a private
preferred stock with cumulative dividends Dilution protection – see Anti-dilution and equity fund to the general partners.
has the right to receive accrued (previously Full ratchet.
unpaid) dividends in full before dividends Due diligence – the investigatory process
are paid to any other classes of stock. Direct secondary transaction – A performed by investors to assess the
transaction in which the buyer purchases viability of a potential investment and the
Current ratio – the ratio of current assets to shares of an operating company from an accuracy of the information provided by the
current liabilities. existing seller. While the transaction is a target company.
secondary sale of shares, the transacted
Data room – a specific location where interest is a primary issue purchase directly Dutch auction – a method of conducting an
potential buyers / investors can review into an operating company. Sellers are often IPO whereby newly issued shares of stock
confidential information about a target venture capitalists selling their ownership are committed to the highest bidder, then,
company. This information may include stake in a portfolio company. Buyers if any shares remain, to the next highest
detailed financial statements, client are often funds that specialize in such bidder, and so on until all the shares are
contracts, intellectual property, property investments. committed. Note that the price per share
leases, and compensation agreements. paid by all buyers is the price commitment
Discount rate – the interest rate used to of the buyer of the last share.
Deal flow – a measure of the number of determine the present value of a series of
potential investments that a fund reviews in future cash flows. Early stage – the state of a company after
any given period. the seed (formation) stage but before
Discounted cash flow (DCF) – a valuation middle stage (generating revenues).
Defined benefit plan – a company methodology whereby the present value Typically, a company in early stage will have
retirement plan in which the benefits are of all future cash flows expected from a a core management team and a proven
typically based on an employee’s salary and company or investment is calculated. concept or product, but no positive cash
number of years worked. Fixed benefits flow.
are paid after the employee retires. The Distressed debt – the bonds of a company
employer bears the investment risk and is that is either in or approaching bankruptcy. Earnings before interest and taxes (EBIT)
committed to providing the benefits to the Some private equity funds specialize in – a measurement of the operating profit
employee. Defined benefit plan managers purchasing such debt at deep discounts of a company. One possible valuation
can invest in private equity funds. with the expectation of exerting influence methodology is based on a comparison of
in the restructuring of the company and private and public companies’ value as a
Defined contribution plan – a company then selling the debt once the company has multiple of EBIT.
retirement plan in which the employee meaningfully recovered.
elects to contribute some portion of his Earnings before interest, taxes,
or her salary into a retirement plan, such Distribution – the transfer of cash or depreciation and amortization (EBITDA)
as a 401(k) or 403(b). The employer may securities to a limited partner resulting from – a measurement of the cash flow of
also contribute to the employee’s plan. the sale, liquidation or IPO of one or more a company. One possible valuation
With this type of plan, the employee bears portfolio companies in which a general methodology is based on a comparison of
the investment risk. The benefits depend partner chose to invest. private and public companies’ value as a
solely on the amount of money made from multiple of EBITDA.
investing the employee’s contributions. Dividends – payments made by a company
to the owners of certain securities. Earn out – an arrangement in which sellers
Demand rights – a type of registration of a business receive additional future
right. Demand rights give an investor the Down round – a round of financing payments, usually based on financial
right to force a startup to register its shares whereby the valuation of the company performance metrics such as revenue or net
with the SEC and prepare for a public sale is lower than the value determined by income.
of stock (IPO). investors in an earlier round.
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Data provided by
Elevator pitch – a concise presentation, FAS 157 – See ASC Topic 820 entry. Full ratchet – an anti-dilution protection
lasting only a few minutes (an elevator ride), mechanism to protect earlier investors from
by an entrepreneur to a potential investor First refusal – the right of a privately owned dilution when a new round is raised at a
about an investment opportunity. company to purchase any shares that lower price. In the case of a full ratchet for
employees would like to sell before they are a Series A followed by a Series B at a lower
Employee Stock Ownership Program offered to outside buyers price per share, additional shares would be
(ESOP) – a plan established by a company issued to the Series A preferred investors so
to reserve shares for employees. Founders stock – nominally priced
that their resulting cost per share is equal
common stock issued to founders, officers,
to the price per share paid by the Series
Entrepreneur – an individual who starts his employees, directors, and consultants.
B preferred investors. Often as a result of
or her own business.
Free cash flow to equity (FCFE) – the cash the implementation of a ratchet, company
Entrepreneurship – the application of flow available after operating expenses, management and employees who own a
innovative leadership to limited resources in interest payments on debt, taxes, net fixed amount of common shares suffer
order to create exceptional value. principal repayments, preferred stock significant dilution. See Narrow-based
dividends, reinvestment needs and changes weighted average anti-dilution and Broad-
Enterprise Value (EV) – the sum of the in working capital. In a discounted cash flow based weighted average anti-dilution.
market values of the common stock and model to determine the value of the equity
long term debt of a company, minus excess Fully diluted basis – a methodology for
of a firm using FCFE, the discount rate used
cash. calculating any per share ratios whereby
is the cost of equity.
the denominator is the total number of
Equity – the ownership structure of a Free cash flow to the firm (FCFF) – the shares, both preferred and common, issued
company represented by common shares, operating cash flow available after by the company on the assumption that all
preferred shares or unit interests. Equity = operating expenses, taxes, reinvestment warrants and options are exercised.
Assets – Liabilities. needs and changes in working capital, but
Fund-of-funds – a fund created to invest in
before any interest payments on debt are
ESOP – see Employee Stock Ownership other funds (e.g. VC Funds, PE funds, etc.).
made. In a discounted cash flow model to
Program. Typically, individual investors and relatively
determine the enterprise value of a firm
small institutional investors participate in
Evergreen fund – a fund that reinvests its using FCFF, the discount rate used is the
a fund-of-funds to minimize their portfolio
profits in order to ensure the availability of weighted average cost of capital (WACC).
management efforts and leverage the size
capital for future investments.
Friends and family financing – capital and scale of the fund-of-funds.
Exit strategy – the plan for generating provided by the friends and family of
Gatekeepers – intermediaries which
profits for owners and investors of a founders of an early stage company.
endowments, pension funds and other
company. Typically, the options are to Friends and family financings may also
institutional investors use as advisors
merge, be acquired or make an initial include individual angel investors known
regarding private equity investments.
public offering (IPO). An alternative is to to or introduced to the founders. Friends
recapitalize (releverage the company and and family financing rounds are typically General partner (GP) – a class of partner in
then pay dividends to shareholders). structured as notes convertible into a a partnership. The general partner retains
Seed or Series A round of financing. liability for the actions of the partnership.
Expansion stage – the stage of a company Founders should be careful not to create Historically, venture capital and buyout
characterized by a complete management an ownership structure that may hinder the funds have been structured as limited
team and a substantial increase in revenues. participation of professional investors once partnerships, with the venture firm as the
the company begins to achieve success. GP and limited partners (LPs) being the
Fair value – a financial reporting principle
for valuing assets and liabilities, for institutional and high net worth investors
example, portfolio companies in venture that provide most of the capital in the
capital fund portfolios. In 2007, more partnership. The GP earns a management
defined rules took effect. See ASC Topic fee and a percentage of gains (see Carried
820. interest).
Fairness opinion – a letter issued by an GP – see General partner.

investment bank that charges a fee to
assess the fairness of a negotiated price for
a merger or acquisition.
52
Data provided by
GP for hire – In a spin-out or a synthetic High yield debt – debt issued via public Initial Coin Offering (ICO) – An offering of
secondary, a GP for hire refers to the offering or public placement (Rule 144A) units of a new cryptocurrency or crypto-
professional investor who may be hired that is rated below investment grade by token, usually in exchange for existing
by a purchasing firm to manage the new S&P or Moody’s. This means that the debt cryptocurrencies like Bitcoin or Ether, as a
fund created from the orphaned assets is rated below the top four rating categories presale against a future blockchain project,
purchased. In past cases, the GP has often (i.e. S&P BB+, Moody’s Ba2 or below). The i.e., the new coins or tokens sold will be
expanded its role to fundraise for and run lower rating is indicative of higher risk of the “currency” for transactions in a new or
new funds alongside the initial fund. default, and therefore the debt carries a future blockchain project.
higher coupon or yield than investment
Going-private transaction – when a public grade debt. Also referred to as Junk bonds Initial public offering (IPO) – the first
company chooses to pay off all public or Sub-investment grade debt. offering of stock by a company to the
investors, delist from all stock exchanges, public. New public offerings must be
and become owned by management, Hockey stick – the general shape and form registered with the Securities and Exchange
employees, and select private investors. of a chart showing revenue, customers, Commission. An IPO is one of the methods
cash or some other financial or operational that a startup that has achieved significant
Golden handcuffs – financial incentives that measure that increases dramatically at success can use to raise additional capital
discourage founders and / or important some point in the future. Entrepreneurs for further growth. See Qualified IPO.
employees from leaving a company before a often develop business plans with hockey
predetermined date or important milestone. stick charts to impress potential investors. In-kind distribution – a distribution to
limited partners of a private equity fund
Growth stage – the stage of a company Holding period – amount of time an that is in the form of publicly traded shares
when it has received one or more rounds of investment remains in a portfolio. rather than cash.
financing and is generating revenue from its
product or service. Also known as “middle Hot issue – stock in an initial public offering Inside round – a round of financing in which
stage.” that is in high demand. the investors are the same investors as
the previous round. An inside round raises
Hart-Scott-Rodino (HSR) Act – a law Hot money – capital from investors that liability issues since the valuation of the
requiring entities that acquire certain have no tolerance for lack of results by the company has no third party verification in
amounts of stock or assets of a company to investment manager and move quickly to the form of an outside investor. In addition,
inform the Federal Trade Commission and withdraw at the first sign of trouble. the terms of the inside round may be
the Department of Justice and to observe considered self-dealing if they are onerous
a waiting period before completing the Hurdle rate – a minimum rate of return
to any set of shareholders or if the investors
transaction to allow the agencies to assess required before an investor will make an
give themselves additional preferential
whether there will be any anti-competitive investment.
rights.
implications as a result of the transaction.
Incorporation – the process by which
Institutional investor – professional entities
Hedge fund – an investment fund that a business receives a state charter,
that invest capital on behalf of companies
has the ability to use leverage, take short allowing it to become a corporation. Many
or individuals. Examples are: pension
positions in securities, or use a variety of corporations choose Delaware because its
plans, insurance companies and university
derivative instruments in order to achieve laws are business-friendly and up to date.
endowments.
a return that is relatively less correlated to
Incubator – a company or facility designed
the performance of typical indices (such Intellectual property (IP) – knowledge,
to host startup companies. Incubators help
as the S&P 500) than traditional long-only techniques, writings and images that are
startups grow while controlling costs by
funds. Hedge fund managers are typically intangible but often protected by law via
offering networks of contacts and shared
compensated based on assets under patents, copyrights, and trademarks.
back office resources.
management as well as fund performance.
Interest coverage ratio – earnings before
Indenture – the terms and conditions
interest and taxes (EBIT) divided by interest
between a bond issuer and bond buyers.
expense. This is a key ratio used by lenders
to assess the ability of a company to
produce sufficient cash to service its debt
obligation.
53
Data provided by
Internal rate of return (IRR) – the interest Letter of intent – a document confirming Limited partnership – a legal entity
rate at which a certain amount of capital the intent of an investor to participate composed of a general partner and various
today would have to be invested in order to in a round of financing for a company. limited partners. The general partner
grow to a specific value at a specific time in By signing this document, the subject manages the investments and is liable for
the future. company agrees to begin the legal and due the actions of the partnership while the
diligence process prior to the closing of the limited partners are generally protected
Investment thesis / Investment philosophy transaction. Also known as a “Term Sheet”. from legal actions and any losses beyond
– the fundamental ideas which determine their original investment. The general
the types of investments that an investment Leverage – the use of debt to acquire partner collects a management fee and
fund will choose in order to achieve its assets, build operations and increase earns a percentage of capital gains (see
financial goals. revenues. By using debt, a company is Carried interest), while the limited partners
attempting to achieve results faster than if receive income, capital gains and tax
IPEV – Stands for International Private it only used its cash available from pre- benefits.
Equity Valuation guidelines group. This leverage operations. The risk is that the
group is made up of representatives increase in assets and revenues does not Limited partner (LP) – an investor in a
of the international and US venture generate sufficient net income and cash limited partnership. The general partner
capital industry and has published flow to pay the interest costs of the debt. is liable for the actions of the partnership
guidelines for applying US GAAP and while the limited partners are generally
international IFRS valuation rules. See Leveraged buyout (LBO) – the purchase of protected from legal actions and any losses
www.privateequityvaluation.com. Widely a company or a business unit of a company beyond their original investment. The
regarded in the US as the global successor by an outside investor using mostly limited partner receives income, capital
to the US-focused PEIGG group. borrowed capital. gains and tax benefits.
IPO – see Initial public offering. Leveraged recapitalization – the Liquidation – the sale of a company. This
reorganization of a company’s capital may occur in the context of an acquisition
IRR – see Internal rate of return. structure resulting in more debt added to by a larger company or in the context of
the balance sheet. Private equity funds can selling off all assets prior to cessation of
J curve – a concept that during the first few
recapitalize a portfolio company and then operations (Chapter 7 bankruptcy). In
years of a private equity fund, cash flow or
direct the company to issue a one-time a liquidation, the claims of secured and
returns are negative due to investments,
dividend to equity investors. This is often unsecured creditors, bondholders and
losses, and expenses, but as investments
done when the company is performing preferred stockholders take precedence
produce results the cash flow or returns
well financially and the debt markets are over common stockholders.
trend upward. A graph of cash flow or
expanding.
returns versus time would then resemble
Liquidation preference – the contractual
the letter “J”. Leverage ratios – measurements of a right of an investor to priority in receiving
company’s debt as a multiple of cash flow. the proceeds from the liquidation of a
Later stage – the state of a company that
Typical leverage ratios include Total Debt company. For example, a venture capital
has proven its concept, achieved significant
/ EBITDA, Total Debt / (EBITDA minus investor with a “2x liquidation preference”
revenues compared to its competition,
Capital Expenditures), and Senior Debt / has the right to receive two times its
and is approaching cash flow break even
EBITDA. original investment upon liquidation before
or positive net income. Typically, a later
stage company is about 6 to 12 months other more junior forms of equity share in
L.I.B.O.R. – see The London Interbank
away from a liquidity event such as an IPO the liquidation proceeds.
Offered Rate.
or buyout. The rate of return for venture
Liquidity discount – a decrease in the value
capitalists that invest in later stage, less License – a contract in which a patent
of a private company compared to the value
risky ventures is lower than in earlier stage owner grants to a company the right to
of a similar but publicly traded company.
ventures. make, use or sell an invention under certain
Since an investor in a private company
circumstances and for compensation.
LBO – see Leveraged buyout. cannot readily sell his or her investment,
Limited liability company (LLC) – an the shares in the private company must
Lead investor – the outside investor that ownership structure designed to limit be valued less than a comparable public
makes the largest investment in a financing the founders’ losses to the amount of company.
round and manages the documentation and their investment. An LLC itself does not
closing of that round. The lead investor sets pay taxes, rather its owners pay taxes on
the price per share of the financing round, their proportion of the LLC profits at their
thereby determining the valuation of the individual tax rates.
company.
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Data provided by
Liquidity event – a transaction whereby Mezzanine – a layer of financing that National Venture Capital Association
owners of a significant portion of the shares has intermediate priority (seniority) in (NVCA) – the trade organization that
of a private company sell their shares in the capital structure of a company. For empowers the next generation of American
exchange for cash, in the case of an IPO or example, mezzanine debt has lower priority companies that will fuel the economy of
cash based M&A transaction, or shares of than senior debt but usually has a higher tomorrow. As the voice of the U.S. venture
an acquiring company. interest rate and often includes warrants. capital and startup community, NVCA
In venture capital, a mezzanine round is advocates for public policy that supports
Lock-up agreement – investors, generally the round of financing that is the American entrepreneurial ecosystem.
management and employees often agree designed to help a company have enough Serving the venture community as the
not to sell their shares for a specific time resources to reach an IPO. See Bridge preeminent trade association, NVCA
period after an IPO, usually 6 to 12 months. financing. arms the venture community for success,
By avoiding large sales of its stock, the serving as the leading resource for venture
company has time to build interest among Multiples – a valuation methodology that capital data, practical education, peer-led
potential buyers of its shares. compares public and private companies in initiatives, and networking
terms of a ratio of value to an operations
London Interbank Offered Rate (L.I.B.O.R.) figure such as revenue or net income. NDA – see Non-disclosure agreement.
– the average rate charged by large banks For example, if several publicly traded
in London for loans to each other. LIBOR computer hardware companies are valued Non-cumulative dividends – dividends
is a relatively volatile rate and is typically at approximately 2 times revenues, then that are payable to owners of preferred
quoted in maturities of one month, three it is reasonable to assume that a startup stock at a specific point in time only if
months, six months and one year. computer hardware company that is there is sufficient cash flow available after
growing fast has the potential to achieve all company expenses have been paid. If
Management buyout (MBO) – a leveraged cash flow is insufficient, the owners of
a valuation of 2 times its revenues. Before
buyout controlled by the members of the preferred stock will not receive the
the startup company issues its IPO, it will
the management team of a company or a dividends owed for that time period and
likely be valued at less than 2 times revenue
division. Often an MBO is conducted in will have to wait until the board of directors
because of the lack of liquidity of its shares.
partnership with a buyout fund. declares another set of dividends.
See Liquidity discount.
Management fee – a fee charged to the Non-disclosure agreement (NDA) – an
Narrow-based weighted average
limited partners in a fund by the general agreement issued by entrepreneurs to
anti-dilution – a type of anti-dilution
partner. Management fees in a private protect the privacy of their ideas when
mechanism. A weighted average anti-
equity fund usually range from 0.75% to 3% disclosing those ideas to third parties.
dilution method adjusts downward the
of capital under management, depending
price per share of the preferred stock of
on the type and size of fund. For venture Non-interference – an agreement often
investor A (by issuing new additional shares)
capital funds, 2% is typical. signed by employees and management
due to the issuance of new preferred shares
whereby they agree not to interfere
Management rights – the rights often to new investor B at a price lower than
with the company’s relationships with
required by a venture capitalist as part of the price investor A originally received.
employees, clients, suppliers and sub-
the agreement to invest in a company. The Investor A is issued enough preferred stock
contractors within a certain time period
venture capitalist has the right to consult to replicate a weighed average of investor
after termination of employment.
with management on key operational A’s price and investor B’s price. A narrow-
issues, attend board meetings and review based anti-dilution uses only common stock No-shop clause – a section of an agreement
information about the company’s financial outstanding in the denominator of the to purchase or invest in a company whereby
situation. formula for determining the new weighted the seller agrees not to market the company
average price. to other potential buyers or investors for a
Market capitalization – the value of a specific time period.
publicly traded company as determined
by multiplying the number of shares Non-solicitation – an agreement often
outstanding by the current price per share. signed by employees and management
whereby they agree not to solicit other
MBO – see Management buyout. employees of the company regarding job
opportunities.
NVCA – see National Venture Capital

Association.
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Data provided by
Offering memorandum – a legal document PEIGG – acronym for Private Equity Preference – seniority, usually with respect
that provides details of an investment to Industry Guidelines Group, an ad hoc to dividends and proceeds from a sale or
potential investors. See Private placement group of individuals and firms involved in dissolution of a company.
memorandum. the private equity industry for the purpose
of establishing valuation and reporting Preferred return – a minimum return per
Operating cash flow – the cash flow guidelines. With the implementation of annum that must be generated for limited
produced from the operation of a business, FAS 157 in 2007, the group’s mission partners of a private equity fund before
not from investing activities (such as selling was essentially complete. Several of its the general partner can begin receiving a
assets) or financing activities (such as members then joined IPEV, which is viewed percentage of profits from investments.
issuing debt). Calculated as net operating by US VCs as the international successor to
income (NOI) plus depreciation. Preferred stock – a type of stock that
PEIGG.
has certain rights that common stock
Option pool – a group of options set aside Piggyback rights – rights of an investor does not have. These special rights may
for long term, phased compensation to to have his or her shares included in include dividends, participation, liquidity
management and employees. a registration of a startup’s shares in preference, anti-dilution protection and
preparation for an IPO. veto provisions, among others. Private
Outstanding shares – the total amount of equity investors usually purchase preferred
common shares of a company, not including PIK dividend – a dividend paid to the holder stock when they make investments in
treasury stock, convertible preferred stock, of a stock, usually preferred stock, in the companies.
warrants and options. form of additional stock rather than cash.
PIK refers to payment in kind. Pre-money valuation – the valuation of
Pay to play – a clause in a financing a company prior to the current round of
agreement whereby any investor that does PIPEs – see Private investment in public financing. For example, a venture capitalist
not participate in a future round agrees equity. may invest $5 million in a company valued
to suffer significant dilution compared to at $2 million pre-money. As a result, the
other investors. The most onerous version Placement agent – a company that startup will have a “pre-money” valuation of
of “pay to play” is automatic conversion to specializes in finding institutional investors $2 million.
common shares, which in essence ends any that are willing and able to invest in a
preferential rights of an investor. private equity fund. Sometimes a private Primary shares – shares sold by a
equity fund will hire a placement agent so corporation (not by individual shareholders).
Pari passu – a legal term referring to the the fund partners can focus on making and
equal treatment of two or more parties managing investments in companies rather American Investment Council (AIC) – an
in an agreement. For example, a venture than on raising capital. advocacy, communications and research
capitalist may agree to have registration organization for the private equity industry
rights that are pari passu with the other Portfolio company – a company that has in the United States. Previously known
investors in a financing round. received an investment from a private as Private Equity Growth Capital Council
equity fund. (PEGCC).
Participating dividends – the right of
holders of certain preferred stock to receive Post-money valuation – the valuation of a Private equity – equity investments in non-
dividends and participate in additional company including the capital provided by public companies, usually defined as being
distributions of cash, stock or other assets. the current round of financing. For example, made up of venture capital, growth equity
a venture capitalist may invest $5 million in and buyout funds. Real estate, oil and gas,
Participating preferred stock – a unit a company valued at $2 million “pre-money” and other such partnerships are sometimes
of ownership composed of preferred (before the investment was made). As a included in the definition.
stock and common stock. The preferred result, the startup will have a post-money
stock entitles the owner to receive a valuation of $7 million. Private investment in public equity (PIPEs)
predetermined sum of cash (usually the – investments by a private equity fund
original investment plus accrued dividends) PPM – see Private placement in a publicly traded company, usually at a
if the company is sold or has an IPO. The memorandum. discount and in the form of preferred stock.
common stock represents additional
continued ownership in the company. Preemptive rights – the rights of Private placement – the sale of a security
shareholders to maintain their percentage directly to a limited number of institutional
ownership of a company by buying shares and qualified individual investors. If
sold by the company in future financing structured correctly, a private placement
rounds. avoids registration with the Securities and
Exchange Commission.
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Data provided by
Private placement memorandum (PPM) Redemption rights – the right of an Rollup – the purchase of relatively smaller
– a document explaining the details of investor to force the startup company to companies in a sector by a rapidly growing
an investment to potential investors. For buy back the shares issued as a result of company in the same sector. The strategy is
example, a private equity fund will issue the investment. In effect, the investor has to create economies of scale. For example,
a PPM when it is raising capital from the right to take back his/her investment the movie theater industry underwent
institutional investors. Also, a startup may and may even negotiate a right to receive significant consolidation via rollups in the
issue a PPM when it needs growth capital. an additional sum in excess of the original 1960’s and 1970’s.
Also known as “Offering Memorandum”. investment.
Round – a financing event usually involving
Private securities – securities that are Registration – the process whereby shares several private equity investors.
not registered with the Securities and of a company are registered with the
Exchange Commission and do not trade Securities and Exchange Commission under Royalties – payments made to patent or
on any exchanges. The price per share is the Securities Act of 1933 in preparation copyright owners in exchange for the use of
negotiated between the buyer and the for a sale of the shares to the public. their intellectual property.
seller (the “issuer”).
Regulation D – Often referred to as simply Rule 144 – a rule of the Securities and
Qualified IPO – a public offering of “Reg D,” an SEC regulation that governs Exchange Commission that specifies the
securities valued at or above a total amount private placements. Private placements are conditions under which the holder of shares
specified in a financing agreement. This investment offerings for institutional and acquired in a private transaction may sell
amount is usually specified to be sufficiently accredited individual investors, but not the those shares in the public markets.
large to guarantee that the IPO shares will general public.
S corporation – an ownership structure that
trade in a major exchange (NASDAQ or
Restricted shares – shares that cannot be limits its number of owners to 100. An S
New York Stock Exchange). Usually upon
traded in the public markets. corporation does not pay taxes, rather its
a qualified IPO preferred stock is forced to
owners pay taxes on their proportion of the
convert to common stock.
Return on investment (ROI) – the proceeds corporation’s profits at their individual tax
Quartile – one fourth of the data points in from an investment, during a specific time rates.
a data set. Often, private equity investors period, calculated as a percentage of the
original investment. Also, net profit after SBIC – see Small Business Investment
are measured by the results of their
taxes divided by average total assets. Company.
investments during a particular period
of time. Institutional investors often Scalability – a characteristic of a new
Rights offering – an offering of stock to
prefer to invest in private equity funds business concept that entails the growth
current shareholders that entitles them to
that demonstrate consistent results over of sales and revenues with a much slower
purchase the new issue.
time, placing in the upper quartile of the growth of organizational complexity and
investment results for all funds. Rights of co-sale with founders – a clause expenses. Venture capitalists look for
in venture capital investment agreements scalability in the startups they select to
Realization ratio – the ratio of cumulative
that allows the VC fund to sell shares at the finance.
distributions to paid-in capital. The
same time that the founders of a startup
realization ratio is used as a measure of the Scale-down – a schedule for phased
choose to sell.
distributions from investment results of a decreases in management fees for general
private equity partnership compared to the Risk-free rate – a term used in finance partners in a limited partnership as the fund
capital under management. theory to describe the return from investing reduces its investment activities toward the
in a riskless security. In practice, this is end of its term.
Recapitalization – the reorganization of a
often taken to be the return on US Treasury
company’s capital structure. Scale-up – the process of a company
Bills.
growing quickly while maintaining
Red herring – a preliminary prospectus
Road show – presentations made in several operational and financial controls in place.
filed with the Securities and Exchange
cities to potential investors and other Also, a schedule for phased increases in
Commission and containing the details of
interested parties. For example, a company management fees for general partners in a
an IPO offering. The name refers to the
will often make a road show to generate limited partnership as the fund increases its
disclosure warning printed in red letters on
interest among institutional investors prior investment activities over time.
the cover of each preliminary prospectus
to its IPO.
advising potential investors of the risks
involved. ROI – see Return on investment.
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Data provided by
Secondary market – a market for the sale Series A preferred stock – preferred Syndicate – a group of investors that agree
of limited partnership interests in private stock issued by a fast growth company in to participate in a round of funding for a
equity funds. Sometimes limited partners exchange for capital from investors in the company. Alternatively, a syndicate can
chose to sell their interest in a partnership, “A” round of financing. This preferred stock refer to a group of investment banks that
typically to raise cash or because they is usually convertible to common shares agree to participate in the sale of stock to
cannot meet their obligation to invest more upon an IPO. the public as part of an IPO.
capital according to the takedown schedule.
Certain investment companies specialize Shareholder agreement – a contract that Synthetic secondary – A popular method of
in buying these partnership interests at a sets out the basis on which the company completing a direct secondary transaction
discount. will be operated and the shareholders’ in which the buyer becomes a limited
rights and obligations. It provides rights partner (LP) in a special purpose vehicle
Secondary shares – shares sold by a and privileges to preferred and major (SPV) or similar entity which has been
shareholder (not by the corporation). shareholders and protections to minority set up out of the underlying investments
shareholders. in order to create a limited partnership
Securities and Exchange Commission (SEC) interest. The term arose because of the
– the regulatory body that enforces federal Sharpe Ratio – a method of calculating the synthetic nature of the direct purchase
securities laws such as the Securities Act risk-adjusted return of an investment. The through the LP secondary transaction.
of 1933 and the Securities Exchange Act of Sharpe Ratio is calculated by subtracting
1934. the risk-free rate from the return on a Tag-along right – the right of a minority
specific investment for a time period investor to receive the same benefits as a
Seed capital – investment provided by (usually one year) and then dividing the majority investor. Usually applies to a sale
professional seed funds, angels and angel resulting figure by the standard deviation of securities by investors. Also known as
groups, and friends and family of the of the historical (annual) returns for that Co-sale right.
founders of a startup in the seed stage of investment. The higher the Sharpe Ratio,
its development. the better. Takedown – a schedule of the transfer of
capital in phases in order to complete a
Seed round (“Series Seed”) - a financing Small Business Investment Company (SBIC) commitment of funds. Typically, a takedown
event whereby angels, angel groups, – a company licensed by the Small Business is used by a general partner of a private
professionally managed Seed funds, and Administration to receive government equity fund to plan the transfer of capital
early stage venture capital funds become capital in the form of debt or equity for use from the limited partners.
involved in a young start-up company that in private equity investing.
was previously financed by founders, their Tender offer – an offer to public
friends and family, and individual angel Stock option – a right to purchase or sell shareholders of a company to purchase
investors in a friends and family financing. a share of stock at a specific price within their shares.
Seed rounds can be priced rounds or can a specific period of time. Stock purchase
be structured as notes convertible into a options are commonly used as long term Term loan – a bank loan for a specific period
“Series A” financing round. The Seed round incentive compensation for employees and of time, usually up to ten years in leveraged
is now typically the first “institutional” management of fast growth companies. buyout structures.
financing of a company. The size of Seed
Strategic investor – a relatively large Term sheet – a document confirming
rounds in recent years has grown in recent
corporation that agrees to invest in a the intent of an investor to participate
years to resemble what formerly would
young or a smaller company in order to in a round of financing for a company.
have been a small “Series A” round.
have access to its proprietary technology, By signing this document, the subject
Seed stage – the state of a company when it product or service. company agrees to begin the legal and due
has just been incorporated and its founders diligence process prior to the closing of the
are developing their product or service. Subordinated debt – a loan that has a transaction. Also known as “Letter of Intent”.
lower priority than a senior loan in case of
Senior debt – a loan that has a higher a liquidation of the asset or company. Also Tranche – a portion of a set of securities.
priority in case of a liquidation of the asset known as “junior debt”. Each tranche may have different rights or
or company. risk characteristics. When venture capital
Sweat equity – ownership of shares in a firms finance a company, a round may be
Seniority – higher priority. company resulting primarily from work disbursed in two or three tranches, each of
rather than investment of capital. which is paid when the company attains one
or more milestones.
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Data provided by
Turnaround – a process performed Vesting – a schedule by which employees shares in a company. Without anti-dilution
at a struggling company resulting in gain ownership over time of a previously protection, an investor would suffer
a substantial increase in a company’s agreed upon amount of retirement funding from a reduction of his or her percentage
revenues, profits and reputation. or stock options. ownership. Usually as a result of the
implementation of a weighted average
Under water option – an option is said to Vintage – the year that a private equity anti-dilution, company management and
be under water if the current fair market fund begins making investments. Venture employees who own a fixed amount of
value of a stock is less than the option funds are generally benchmarked to funds common shares suffer significant dilution,
exercise price. of the same vintage year. but not as badly as in the case of a full
ratchet.
Underwriter – an investment bank that Voting rights – the rights of holders of
chooses to be responsible for the process preferred and common stock in a company Write-down – a decrease in the reported
of selling new securities to the public. An to vote on certain acts affecting the value of an asset or a company.
underwriter usually chooses to work with company. These matters may include
a syndicate of investment banks in order to payment of dividends, issuance of a new Write-off – a decrease in the reported
maximize the distribution of the securities. class of stock, mergers or liquidation. value of an asset or a company to zero.
Venture capital – a segment of the private Warrant – a security which gives the holder Write-up – an increase in the reported
equity industry which focuses on investing the right to purchase shares in a company at value of an asset or a company.
in new companies with high growth a pre-determined price. A warrant is a long
potential and accompanying high risk. term option, usually valid for several years Zombie – a company that has received
or indefinitely. Typically, warrants are issued capital from investors but has only
Venture capital method – a pricing concurrently with preferred stocks or bonds generated sufficient revenues and cash
valuation method whereby an estimate of in order to increase the appeal of the stocks flow to maintain its operations without
the future value of a company is discounted or bonds to potential investors. significant growth. Sometimes referred
by a certain interest rate and adjusted to as “walking dead.” Typically, a venture
for future anticipated dilution in order Washout round – a financing round capitalist has to make a difficult decision
to determine the current value. Usually, whereby previous investors, the founders as to whether to liquidate a zombie or
discount rates for the venture capital and management suffer significant dilution. continue to invest funds in the hopes that
method are considerably higher than Usually as a result of a washout round, the the zombie will become a winner.
public stock return rates, representing the new investor gains majority ownership and
fact that venture capitalists must achieve control of the company.
significant returns on investment in order
to compensate for the risks they take in Weighted average cost of capital (WACC)
funding unproven companies. – the average of the cost of equity and
the after-tax cost of debt. This average is
Venture Monitor – Officially known as determined using weight factors based on
the PitchBook-National Venture Capital the ratio of equity to debt plus equity and
Association (NVCA) Venture Monitor. the ratio of debt to debt plus equity.
Jointly produced by PitchBook and NVCA,
it serves as the authoritative quarterly Weighted average anti-dilution – an anti-
report on venture capital activity in dilution protection mechanism whereby
the entrepreneurial ecosystem. The the conversion rate of preferred stock is
Venture Monitor provides a complete adjusted in order to reduce an investor’s
look at venture capital activity, reporting loss due to an increase in the number of
on fundraising, investments, exits and
other relevant industry analysis in one
comprehensive report each quarter.
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Data provided by
Data Methodology
Fundraising firms, and corporate investors. Investments
received as part of an accelerator program
participating investors, and more.
We define venture capital funds as pools of are not included, however, if the accelerator Growth equity: Rounds must include at least
capital raised for the purpose of investing in continues to invest in follow-on rounds, one investor tagged as growth/expansion,
the equity of startup companies. In addition those further financings are included. All while deal size must either be $15 million or
to funds raised by traditional venture financings are of companies headquartered more (although rounds of undisclosed size
capital firms, PitchBook also includes funds in the US. that meet all other criteria are included).
raised by any institution with the primary In addition, the deal must be classified as
intent stated above. Funds identifying as growth/expansion or later-stage VC in
growth-stage vehicles are classified as PE Stage Definitions the PitchBook Platform. If the financing
funds and are not included in this report. is tagged as late-stage VC it is included
Angel/seed: We define financings as angel
A fund’s location is determined by the regardless of industry. Also, if a company
rounds if there are no PE or VC firms
country in which the fund is domiciled, if is tagged with any PitchBook vertical,
involved in the company to date and we
that information is not explicitly known, the excepting manufacturing and infrastructure,
cannot determine if any PE or VC firms
HQ country of the fund’s general partner is it is kept. Otherwise, the following industries
are participating. In addition, if there is
used. Only funds based in the United States are excluded from growth equity financing
a press release that states the round is
that have held their final close are included calculations: buildings and property, thrifts
an angel round, it is classified as such.
in the fundraising numbers. The entirety and mortgage finance, real estate investment
Finally, if a news story or press release only
of a fund’s committed capital is attributed trusts, and oil & gas equipment, utilities,
mentions individuals making investments
to the year of the final close of the fund. exploration, production and refining. Lastly,
in a financing, it is also classified as angel.
Interim close amounts are not recorded in the company in question must not have had
As for seed, when the investors and/or
the year of the interim close. an M&A event, buyout, or IPO completed
press release state that a round is a seed
prior to the round in question.
financing, or it is for less than $500,000
Deals and is the first round as reported by a

government filing, it is classified as such. If
Corporate venture capital: Financings
classified as corporate venture capital
We include equity investments into angels are the only investors, then a round include rounds that saw both firms investing
startup companies from an outside source. is only marked as seed if it is explicitly via established CVC arms or corporations
Investment does not necessarily have to be stated. making equity investments off balance
taken from an institutional investor. This
sheets or whatever other non-CVC method
can include investment from individual Early-stage: Rounds are generally classified
actually employed.
angel investors, angel groups, seed funds, as Series A or B (which we typically
venture capital firms, corporate venture aggregate together as early stage) either by
firms, and corporate investors. Investments the series of stock issued in the financing or, Exits
received as part of an accelerator program if that information is unavailable, by a series
of factors including: the age of the company, We include the first majority liquidity event
are not included, however, if the accelerator
prior financing history, company status, for holders of equity securities of venture-
continues to invest in follow-on rounds,
participating investors, and more. backed companies. This includes events
those further financings are included. All
where there is a public market for the
financings are of companies headquartered
Late-stage: Rounds are generally classified shares (IPO) or the acquisition of majority of
in the US.
as Series C or D or later (which we typically the equity by another entity (corporate or
We include equity investments into aggregate together as late stage) either by financial acquisition). This does not include
startup companies from an outside source. the series of stock issued in the financing or, secondary sales, further sales after the
Investment does not necessarily have to be if that information is unavailable, by a series initial liquidity event, or bankruptcies. M&A
taken from an institutional investor. This of factors including: the age of the company, value is based on reported or disclosed
can include investment from individual prior financing history, company status, figures, with no estimation used to assess
angel investors, angel groups, seed funds, the value of transactions for which the
venture capital firms, corporate venture actual deal size is unknown.
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Data provided by
Geographic Definitions
U.S. regions
West Coast: New England:
Alaska, California, Hawaii, Oregon, Connecticut, Maine, Massachusetts, New
Washington Hampshire, Rhode Island, Vermont
Mountain: Mid-Atlantic:
Arizona, Colorado, Idaho, Montana, Nevada, Delaware, D.C., Maryland, New Jersey, New
New Mexico, Utah, Wyoming York, Pennsylvania, Virginia, West Virginia
Midwest: South:
Iowa, Kansas, Missouri, Nebraska, North Arkansas, Kentucky, Louisiana, Oklahoma,
Dakota, South Dakota Tennessee, Texas
Great Lakes: Southeast:

Illinois, Indiana, Michigan, Minnesota, Ohio, Alabama, Florida, Georgia, Mississippi, North
Wisconsin Carolina, Puerto Rico, South Carolina
New
West England
Midwest Great lakes Mid-atlantic

Mountain
South Southeast
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Industry Code Definitions

Example companies in these definitions do not necessarily mean that those companies are included in the venture dataset included in the
Yearbook, but are merely provided for context.
Description VC Special Industry Description VC Special Industry
Commercial Services Commercial Services Construction (Non-Wood) Other
Consumer Goods & Containers and Packaging Other

Apparel and Accessories
Recreation
Consumer Goods & Forestry Other
Restaurants, Hotels and Leisure
Recreation
Metals, Minerals and Mining Other
Consumer Goods &
Retail
Recreation
Textiles Other
Energy Equipment Energy
Other Materials Other
Exploration, Production and Refining Energy
Utilities Other
Energy Services Energy
Other Energy Other
HC Devices &
Healthcare Devices and Supplies
Supplies Capital Markets/Institutions Other
HC Services &
Healthcare Services Commercial Banks Other
Systems
HC Services &
Healthcare Technology Systems Insurance Other
Systems
Communications and Networking IT Hardware Other Financial Services Other
Computer Hardware IT Hardware Services (Non-Financial) Other
Semiconductors IT Hardware Transportation Other
Media Media Other Consumer Products and Services Other
Commercial Products Other Consumer Durables Other
Other Healthcare Other Consumer Non-Durables Other
IT Services Other Commercial Transportation Other
Other Information Technology Other Other Business Products and Services Other
Agriculture Other Pharmaceuticals and Biotechnology Pharma & Biotech
Chemicals and Gases Other Software Software
Note: Life sciences is composed of pharma & biotech and healthcare devices & supplies combined together.
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1 Business Products & Services 1.2 Commercial Services 1.2.7 Human Capital Services - Providers of
human resource and employment services.
1.1 Commercial Products 1.2.1 Accounting, Audit and Tax Services Includes recruitment, training, and career
- Providers of accounting, audit, and tax development, among others.
1.1.1 Aerospace and Defense - services to managers, investors, and tax
Manufacturers of equipment, parts authorities. Ex: Monster Worldwide, Vault.com, Robert
or products related to civil or military Half Finance and Accounting
aerospace and defense. Includes aircraft Ex: PricewaterhouseCoopers, Ernst and
parts, firearms, and other munitions. Young, KPMG, Deloitte 1.2.8 Legal Services - Providers of corporate
legal services. Includes contract law, tax law,
Ex: Boeing, Lockheed Martin, Northrop 1.2.2 BPO/Outsource Services - Providers securities law, intellectual property rights,
Grumman of business process outsourcing (BPO) and zoning law, among others.
services. BPO is the transmission of
1.1.2 Building Products - Manufacturers processes and operational activities to a Ex: DLA Piper, Goodwin Procter, White and
and distributors of home improvement third party for the purpose of cost reduction, Case
and construction products and equipment. productivity growth, and innovative
Includes drills, saws, windows, doors, and capabilities. 1.2.9 Logistics - Providers of supply chain
other prefabricated building materials, management and logistical support. Includes
among others. Ex: Accenture, Sitel, ARAMARK inventory management, purchasing,
organizing transportation, and warehousing,
Ex: USG, Elk Corporation, Fastenal Company 1.2.3 Construction and Engineering - among others.
Companies engaged in large scale or non-
1.1.3 Distributors/Wholesale - Companies residential construction. Includes building Ex: Penske Logistics, United Parcel Service,
engaged in the sale of bulk goods for resale construction, heavy/highway construction, Expeditors International
by a retailer. The goods are sold to industrial, industrial construction, architecture, and
commercial, institutional, or other entities. civil engineering, among others. 1.2.10 Media and Information Services -
Providers of media and information services
Ex: Ferguson Enterprises, W.W. Grainger, Ex: Turner Construction, Skanska, Tishman to businesses. Includes companies engaged
Hughes Supply Construction in trade shows, marketing, branding,
conducting surveys, market analysis, and
1.1.4 Electrical Equipment - Manufacturers 1.2.4 Consulting Services - Providers of audience data interpretations, among others.
of electrical equipment and components. specialized consulting services to improve This includes online marketplaces.
Includes a broad range of electrical devices, a company’s performance. Includes
electrical components, power-generating environmental consulting, human resource Ex: Arbitron, DST Systems, Interactive Data
equipment, and other large electrical consulting, management consulting, Corporation
systems, among others. strategic consulting, and political consulting,
among others. 1.2.11 Office Services - Providers of
Ex: AO Smith, Exide Technologies, Zoltek administrative, office management, and
Companies Ex: McKinsey and Company, Boston personnel services.
Consulting Group, Watson Wyatt
1.1.5 Industrial Supplies and Parts - Ex: Express Personnel Services, IKON Office
Manufacturers of intermediate goods. 1.2.5 Education and Training Services - Solutions, Snelling Personnel Services
Includes industrial parts and supplies Providers of specialized education and
made through injection molding, extrusion, training services. Includes on-the-job and 1.2.12 Printing Services - Providers of
thermoforming, die casting, and metal off-the-job training, among others. commercial printing services. Includes
stamping, among others. printing, copying, binding, and document
Ex: Apollo Group, Accredited Technical preparation, among others.
Ex: Advanced Plastics, Precision Urethane Training, WorldWideLearn
and Machine, Lyons Tool and Die Ex: Kinko’s, AlphaGraphics, Sir Speedy
1.2.6 Environmental Services - Providers
1.1.6 Machinery - Manufacturers of heavy- of environmental services. Includes 1.2.13 Security Services - Provider of
duty industrial machinery. Includes heavy environmental management, waste residential and commercial security services.
equipment, hardware, and machine tools, management, and pollution control services, Includes security system installation,
among others. among others. monitoring, and staffing services, among
others.
Ex: Caterpillar, Komatsu, Deere and Ex: Environmental Quality Management,
Company Waste Management, Allied Waste Industries Ex: Brinks, AlliedBarton Security Services,
Protection One
1.1.7 Other Commercial Products
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1.2.14 Other Commercial Services 1.4.2 Conglomerates - Companies engaged cameras, televisions, and handheld devices,
in multiple and unrelated industrial sectors. among others.
1.3 Transportation
Ex: Berkshire Hathaway, Altria Group, GE Ex: Samsung, Sony, Panasonic
1.3.1 Air - Providers of products or services
related to commercial air transportation. 1.4.3 Government - Providers of products 2.2.3 Home Furnishings - Manufacturers
Includes couriers, airfreight, and airplane and services to government agencies. of home furniture and other decorative
maintenance, among others. Includes consulting, information technology accessories. Includes couches, lamps, and
services, and military equipment and draperies, among others.
Ex: Delta Cargo, Pilot Freight Services, support, among others.
Lufthansa Cargo Ex: Ethan Allen Interior, Furniture Brands
Ex: Booz Allen Hamilton, Maximus, Skanska International, La-Z-Boy
1.3.2 Marine - Providers of products or
services related to commercial water 1.4.4 Other Business Products and Services 2.2.4 Household Appliances - Manufacturers
transportation. Includes cargo shipping, of household appliances. Includes
manufacturers of ships, and ship 2 Consumer Products & Services microwaves, vacuum cleaners, washers, and
components, among others. dryers, among others.
2.1 Apparel and Accessories
Ex: Overseas Shipholding Group, DryShips, Ex: Whirlpool, Kenmore, LG
2.1.1 Accessories - Manufacturers or
Seacor Holdings
designers of fashion accessories. Includes 2.2.5 Recreational Goods - Manufacturers of
1.3.3 Rail - Providers of products or services jewelry, gloves, handbags, hats, belts, recreational goods. Includes sporting goods
related to commercial rail transportation. scarves, and sunglasses, among others. and leisure goods, among others.
Includes freight trains, manufacturers of
Ex: Ray-Ban, Coach, Citizen Watch Company Ex: Burton, Titleist, Coleman
trains, and train parts, among others.
2.1.2 Clothing - Manufacturers or designers 2.2.6 Other Consumer Durables
Ex: Union Pacific, Canadian National Railway,
of clothing.
Norfolk Southern
2.3 Consumer Non-Durables
Ex: Ralph Lauren Polo, Hanes, Columbia
1.3.4 Road - Providers of products or
Sportswear 2.3.1 Beverages - Producers and distributors
services related to commercial land
of alcoholic and non-alcoholic beverages.
transportation. Includes freight trucks, 2.1.3 Footwear - Manufacturers or designers
manufacturers of commercial trucks, and of footwear. Includes athletic shoes, boots, Ex: Coca-Cola, Pepsi, Anheuser-Busch
truck parts, among others. and sandals, among others.
2.3.2 Food Products - Producers, processors,
Ex: J.B. Hunt Transport Services, Landstar Ex: Crocs, Sketchers, Timberland and distributors of food products. Includes
System, Con-way companies engaged in food preparation, and
2.1.4 Luxury Goods - Manufacturers or manufacturers of packaged food, among
1.3.5 Infrastructure - Providers of products designers of luxury goods. Includes high end others.
and services for commercial transportation clothing, accessories, and footwear, among
infrastructure. Includes products and others. Ex: Kraft Foods, Heinz, Lancaster Colony
services related to airports, train stations,
bus terminals, and highway construction, Ex: Gucci Group, Patek Philippe, Tag Heuer 2.3.3 Household Products - Manufacturers
among others. International of household products. Includes cleaning
supplies, disposable products, and paper
Ex: Hubbard Construction, Granite 2.1.5 Other Apparel towels, among others.
Construction, Mosites Construction
2.2 Consumer Durables Ex: Clorox, Dixie, Kleenex
1.3.6 Other Transportation
2.2.1 Business Equipment and Supplies 2.3.4 Personal Products - Manufacturers
1.4 Other Business Products and Services - Manufacturers of office supplies and of personal products. Includes cosmetics,
equipment. Includes general office supplies, perfumes, and hygiene products, among
1.4.1 Buildings and Property - Owners filing products, and paper shredders, among others.
of buildings and property. Includes office others.
buildings, factories, farmland, and oil fields, Ex: Old Spice, Gillette, Dove
among others. Ex: Pitney Bowes, Steelcase, 3M
2.3.5 Other Consumer Non-Durables
Ex: The Empire State Building, 175 Fifth 2.2.2 Electronics - Manufacturers of
Avenue consumer electronics. Includes digital
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2.4 Media Ex: Carnival Cruise Lines, Royal Caribbean Ex: Amazon.com, Overstock.com, Netflix
Cruise Lines, Crystal Cruises
2.4.1 Broadcasting, Radio and Television 2.6.6 Specialty Retail - Owners and
- Providers of entertainment through 2.5.3 Hotels and Resorts - Owners and operators of retail stores specializing in
radio, television, or the internet. Includes operators of hotels and resorts. Includes the sale of goods in a particular industry or
local, national, and international radio and vacationing facilities and commercial sector.
television channels. establishments, among others.
Ex: Barnes and Noble, Petsmart, Office
Ex: NBC, Telemundo, YouTube Ex: Four Seasons, Hyatt, Fairmont Depot
2.4.2 Information Services - Providers of 2.5.4 Leisure Facilities - Owners and 2.6.7 Other Retail
information and content services. Includes operators of leisure facilities. Includes fitness
political surveys, financial data, and centers and day spas, among others. 2.7 Services (Non-Financial)
statistics, among others.
Ex: LA Fitness, 24 Hour Fitness, Aveda 2.7.1 Accounting, Audit and Tax Services
Ex: Bloomberg, Interactive Data Lifestyle Salon and Spa - Providers of accounting, audit, and tax
Corporation, Gallup services to individuals.
2.5.5 Restaurants and Bars - Owners and
2.4.3 Movies, Music and Entertainment operators of restaurants and bars. Ex: HandR Block, Jackson Hewitt, Liberty
- Companies engaged in the production, Tax Service
distribution, and sale of entertainment Ex: Applebee’s, Chili’s, Ruth’s Chris Steak
House 2.7.2 Educational and Training Services -
products and services. Includes movie
Providers of educational and professional
theaters, production companies, and music
2.5.6 Other Restaurants, Hotels and Leisure training services. Includes vocational
labels, among others.
education and exam preparation, among
2.6 Retail others.
Ex: Lowes Cineplex, Virgin Records,
Paramount Pictures 2.6.1 Catalog Retail - Provider of retail Ex: University of Phoenix, ITT Technical
services through mail order and TV home Institute, Princeton Review
2.4.4 Publishing - Providers of print and
shopping.
internet publishing services. Includes
2.7.3 Legal Services - Providers of legal
newspapers, magazines, and books, among Ex: QVC, HSN, Jewelry Television services to individuals. Includes criminal
others.
law, property law, human rights law, and
2.6.2 Department Stores - Owners and
Ex: Daily Journal, The New York Times insurance law, among others.
operators of large stores with a wide variety
Company, The McGraw-Hill Companies of products in distinct departments. Includes Ex: DLA Piper, Goodwin Procter, White and
apparel, furniture, electronics, hardware, Case
2.4.5 Social Content - Owners and operators
and sporting goods, among others.
of social content websites. Includes social
2.7.4 Real Estate Services - Providers of
networks, discussion boards, and dating Ex: Nordstrom, Macy’s, Neiman Marcus real estate services to individuals. Includes
websites, among others.
real estate brokers and property valuation,
2.6.3 Distributors/Wholesale - Companies
Ex: Facebook, LinkedIn, Match.com among others.
engaged in the sale of bulk goods to
individual consumers. Ex: Century 21, RE/MAX, Coldwell Banker
2.4.6 Other Media
Ex: Costco, Sam’s Club, BJ’s Wholesale Club 2.7.5 Other Services (Non-Financial)
2.5 Restaurants, Hotels and Leisure
2.6.4 General Merchandise Stores - Owners 2.8 Transportation
2.5.1 Casinos and Gaming - Owners and
and operators of stores offering a wide
operators of casinos and other gaming
variety of general merchandise. General 2.8.1 Air - Providers of air transportation
operations.
merchandise includes personal products, to consumers. Includes major airlines and
Ex: MGM Mirage, Boyd Gaming, Monarch food, film, and prescriptions, among others. charter airlines, among others.
Casino
Ex: CVS, RiteAid, Walgreen’s Ex: Northwest Airlines, United Airlines,
2.5.2 Cruise Lines - Owners and operators of Alaska Airlines
2.6.5 Internet Retail - Providers of retail
cruise lines. Includes cruise ships, and ocean
services primarily through the internet.
liners, among others.
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2.8.2 Automotive - Providers of products 3.2 Exploration, Production and Refining 3.3.5 Infrastructure - Companies engaged
and services related to automotives. Includes in energy infrastructure. Includes pipelines,
automotive manufacturers and automotive 3.2.1 Energy Exploration - Companies transmission lines, generation plants, and
services, among others. engaged in energy exploration. Includes the refineries, among others.
identification, testing and development of
Ex: Ford, GM, Enterprise Rent-a-Car sites for well drilling and wind farms. Ex: Energy Infrastructure Acquisition,
Brookfield Infrastructure Partners, Tortoise
2.8.3 Marine - Providers of products and Ex: Apache Corporation, Anadarko Energy Infrastructure
services related to water transportation. Petroleum, Hunt Oil
Includes leisure boat manufacturers and 3.3.6 Other Energy Services
yacht dealers, among others. 3.2.2 Energy Production - Companies
engaged in energy production. Includes wind 3.4 Utilities
Ex: Viking Yacht Company, Marine Products farming, drilling and removal of crude oil and
Corporation, Fountain Powerboat Industries natural gas. 3.4.1 Electric Utilities - Companies
engaged in the generation, transmission,
2.8.4 Rail - Providers of products and Ex: Transocean, Diamond Offshore Drilling, and distribution of energy for sale in the
services related to rail transportation. Noble Corporation regulated market.
Includes passenger trains and express trains,
among others. 3.2.3 Energy Refining - Companies engaged Ex: Southern Company, FPL Group,
in energy refining. Includes the refining of Dominion Resources
Ex: Amtrak, Grand Luxe Rail Journeys, Union crude oil into gasoline, diesel, kerosene, and
Pacific Railroad fuel oil. 3.4.2 Gas Utilities - Companies engaged in
the production, distribution and marketing
2.8.5 Other Transportation Ex: Sasol, Valero Energy, Imperial Oil of natural gas and related services.
2.9 Other Consumer Products and Services 3.3 Services Ex: National Grid, Sempra Energy, Equitable
Resources
2.9.1 Other Consumer Products and Services 3.3.1 Energy Marketing - Companies
engaged in energy marketing. Includes 3.4.3 Multi-Utilities - Companies engaged in
3 Energy gas marketing, pipeline analysis, and asset the generation, transmission, distribution,
management, among others. and sale of water, electricity and natural gas
3.1 Equipment
to residential, commercial, industrial, and
Ex: Marathon Oil, Hess Corporation, Murphy wholesale customers.
3.1.1 Alternative Energy Equipment -
Oil
Manufacturers or providers of alternative
Ex: Exelon Corporation, Public Service
energy equipment. Includes compressed 3.3.2 Energy Storage - Companies engaged Enterprise Group, PGandE
natural gas, solar, hydroelectric, and wind, in energy storage. Includes commercial and
among others. industrial batteries, fuel cells, and capacitors, 3.4.4 Water Utilities - Companies engaged in
among others. providing water or wastewater services.
Ex: The Wind Turbine Company, Vestas,
Solar Electric Power Company Ex: ZBB Energy, Young Gas Storage, Falcon Ex: Aqua America, California Water Service
Gas Storage Group, American States Water Company
3.1.2 Coal and Consumable Fuels Equipment
- Manufacturers or providers of coal and 3.3.3 Energy Traders and Brokers - 3.4.5 Other Utilities
consumable fuels equipment. Companies engaged in energy trading and
brokerage services. 3.5 Other Energy
Ex: Joy Mining Machinery, Getman, Peters
Equipment Company Ex: Dynergy, Reliant Energy, El Paso 3.5.1 Other Energy
Corporation
3.1.3 Oil and Gas Equipment - 4 Financial Services
Manufacturers or providers of oil and 3.3.4 Energy Transportation - Companies
gas equipment. Includes rigs and drilling 4.1 Capital Markets/Institutions
engaged in energy transportation. Includes
equipment, among others. tankers, and gathering and transmission 4.1.1 Asset Management - Financial
pipelines, among others. institutions providing management of
Ex: Weatherford International, Baker
Hughes, Cameron International various securities to meet specified
Ex: Energy Transfer Equity, Kinder Morgan
investment goals for the investors. Investors
Energy Partners, Enbridge
3.1.4 Other Equipment may be institutions or high net worth
individuals.
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Ex: Smith Barney, Edward Jones, Ameriprise Ex: Accredited Home Lenders, Countrywide, 4.4.2 Holding Companies - Companies that
Financial Quicken Loans do not produce goods or provide services,
but instead own shares of other companies.
4.1.2 Brokerage - Financial Institutions 4.2.5 Other Commercial Banks
acting as an intermediary between a buyer Ex: Berkshire Hathaway, UAL Corporation,
and seller of securities, usually charging a 4.3 Insurance AMR Corporation
commission. Includes clearing houses and
4.3.1 Automotive Insurance - Providers of 4.4.3 Real Estate Investment Trusts (REITs)
stock brokerage firms, among others.
insurance for cars, trucks, and other vehicles. - REIT is a tax designation for a corporation
Ex: Citigroup, Options Clearing Corporation, investing in real estate. REITs receive
Ex: State Farm, All-State, GEICO
LCH.Clearnet special tax reductions and offer high yield
4.3.2 Commercial/Professional Insurance investments in real estate.
4.1.3 Investment Banks - Financial
- Providers of commercial or professional
institutions functioning across all areas of Ex: AMB Property, Duke Realty, EastGroup
insurance. Includes medical malpractice and
capital markets. Includes raising money by Properties
legal malpractice, among others.
issuing and selling securities, and advisory
within mergers and acquisitions, among 4.4.4 Specialized Finance - Companies
Ex: CNA Insurance, Zurich, FM Global
other financial services. engaged in providing specialized finance to
4.3.3 Insurance Brokers - Companies both public and private enterprises.
Ex: Citigroup, Goldman Sachs, Lehman sourcing contracts of insurance on behalf of
Brothers Ex: Latitude Capital Group, Budget Finance
their customers.
Company, Capital Source
4.1.4 Private Equity - Financial Ex: Marsh and McLennan, Willis Group,
institutions engaged in long-term loans 4.4.5 Other Financial Services
Brown and Brown
with multinational corporations and
5 Healthcare
governments. Includes merchant banks, and 4.3.4 Life and Health Insurance - Providers
private equity firms, among others. of life and health insurance. 5.1 Devices and Supplies
Ex: Blackstone Group, Carlyle Group, Ex: ING, Prudential, MetLife 5.1.1 Diagnostic Equipment - Manufacturers
Kohlberg Kravis Roberts of imaging and non-imaging devices used
4.3.5 Multi-line Insurance - Providers of
to assess and diagnose medical conditions.
4.1.5 Other Capital Markets/Institutions diversified insurance services with multiple
Includes X-ray and MRI machines,
interests in life, health, and property
4.2 Commercial Banks otoscopes and stethoscopes, and ultrasound
insurance.
equipment, among others.
4.2.1 International Banks - Non-investment Ex: AXA, Prudential, Sun Life
commercial banks located in more than one Ex: Welch Allyn, Siemens, AFC Industries,
country. 4.3.6 Property and Casualty Insurance - SOMA Technology
Providers of property and casualty risks
Ex: Deutsche Bank, UBS, Bank of America 5.1.2 Medical Supplies - Manufacturers of
insurance.
medical supplies that would be considered
4.2.2 National Banks - Non-investment Ex: Allianz, American International Group, non-durable. Includes syringes, diabetes
commercial banks located in one country. Hartford Financial supplies, bandages, and protective wear,
among others.
Ex: Bank of New York, Citizens Bank, Capital 4.3.7 Re-Insurance - Providers of insurance
One Bank to insurance companies. Ex: Frank Healthcare, Johnson and Johnson,
Adenna, Cardinal Health, Covidien
4.2.3 Regional Banks - Non-investment Ex: Berkshire Hathaway, Munich
commercial banks located in a particular Reinsurance, Hannover Reinsurance 5.1.3 Monitoring Equipment - Manufacturers
region. of devices used to collect and monitor vital
4.3.8 Other insurance signs. Includes heart-rate monitors, oxygen
Ex: Sterling Savings Bank, Evergreen Bank, saturation monitors, and fetal monitors,
HomeStreet Bank 4.4 Other Financial Services
among others.
4.2.4 Thrifts and Mortgage Finance 4.4.1 Consumer Finance - Companies

Ex: Phillips Medical Systems, GE Medical
- Financial institutions specializing in engaged in any kind of lending to consumers.
Systems, Welch Allyn, SOMA Technology,
originating and/or servicing mortgage loans. Includes sub prime lending, among others.
Datascope
Ex: HSBC Finance, CIT, CitiFinancial
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5.1.4 Surgical Devices - Manufacturers of 5.2.6 Managed Care - Owners and operators 5.4.1 Biotechnology - Companies engaged
devices and equipment used in a surgical of managed health plans. Includes Preferred in research, development, and production
setting. Includes laparoscopy instruments, Provider Organizations (PPOs) and Health of biotechnology. Includes embryology,
retractor systems, and positioning devices, Maintenance Organizations (HMOs). genetics, cell biology, molecular biology, and
among others. biochemistry, among others.
Ex: Aetna, Kaiser Permanente, UnitedHealth
Ex: Lyons, Mediflex, Boston Scientific Group Ex: Elan, Genentech, Amgen
5.1.5 Therapeutic Devices - Manufacturers 5.2.7 Practice Management - Providers 5.4.2 Discovery Tools - Researchers and
of devices for rehabilitation or therapy. of consulting and management services developers of tools used in drug discovery
Includes muscle stimulators, light therapy, to medical practices. Excludes practice and drug delivery research. Includes
and pacemakers, among others. management software, such as billing or compound libraries, enzymes, kinases, and
medical records software. specialized proteins, among others.
Ex: Medtronic, Boston Scientific, Empi
Ex: Advantage Medical Claims, Medical Ex: PerkinElmer, Qiagen, Charles River
5.1.6 Other Devices and Supplies Management Associates, Healthcare Laboratories
Facilitators
5.2 Services 5.4.3 Drug Delivery - Researchers and
5.2.8 Other Healthcare Services developers of medication delivery methods.
5.2.1 Clinics/Outpatient Services - Facilities
Includes targeted delivery methods, and
and services for short-term, outpatient care 5.3 Healthcare Technology Systems timed release formulations, among others.
and procedures. Includes rehabilitation,
diagnostic testing, and outpatient surgery 5.3.1 Decision/Risk Analysis - Developers Ex: Elan, Hospira, Nektar Therapeutics
and exams. and producers of software or systems used
to expedite the medical decision and risk 5.4.4 Drug Discovery - Researchers
Ex: AmSurg, Physiotherapy Associates, management process. These programs try and developers of new drugs. Includes
HealthSouth to assist doctors and nurses in their decision identification, screening, and efficacy testing
making process. of drug candidates, among others.
5.2.2 Distributors - Distributors of
healthcare equipment and supplies. Includes Ex: HLTH Corporation, Apache Medical Ex: Bristol-Meyers Squibb, PerkinElmer, Elan
all distributors of healthcare products. Systems, Wellsource
5.4.5 Pharmaceuticals - Manufacturers
Ex: American Medical Supplies and 5.3.2 Enterprise Systems - Developers and distributors of established drugs/
Equipment, AmerisourceBergen, BMP and producers of software and systems pharmaceuticals. This category includes
Sunstone, Owens and Minor that cover multiple areas of the healthcare any large drug company that primarily
organization. manufactures medicines; however they
5.2.3 Elder and Disabled Care - Facilities
may also be engaged in drug research and
and services for the care of senior citizens. Ex: NextGen, Cerner, McKesson development.
Includes assisted living, long term care, Corporation
hospice care, nursing homes, and home care, Ex: Bristol-Meyers Squibb, GlaxoSmithKline,
among others. 5.3.3 Medical Records Systems - Developers Novartis, Eli Lilly and Company
and producers of software or systems to
Ex: RehabCare Group, Sunrise Senior Living, organize medical records. 5.4.6 Other Pharmaceuticals and
AccentCare Biotechnology
Ex: NextGen, McKesson, MediNotes
5.2.4 Hospitals/Inpatient Services - Facilities 5.5 Other Healthcare
and services for long-term care, and 5.3.4 Outcome Management - Developers
inpatient care and procedures. Includes and producers of software or systems used 5.5.1 Other Healthcare
invasive surgical procedures, and emergency to analyze the effectiveness of treatments
services. prescribed by doctors. 6 Information Technology
Ex: Tenet Healthcare, HCA, Universal Health Ex: Tri-Analytics, Outcome Concept 6.1 Communications and Networking
Services Systems, Protocol Driven Healthcare
6.1.1 Cable Service Providers - Developers
5.2.5 Laboratory Services - Providers of 5.3.5 Other Healthcare Technology Systems and marketers of television, internet and
medical laboratory services. Includes blood voice services for cable networks. Includes
and tissue testing. 5.4 Pharmaceuticals and Biotechnology broadband internet, VoIP, and cable
television, among others.
Ex: Quest Diagnostics, LabCorp, LabOne
Ex: Comcast, Cox Communications, Adelphia
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6.1.2 Connectivity Products - Manufacturers 6.2.2 Electronic Components - Ex: Taiwan Semiconductor Manufacturing,
of electronic components used to create Manufacturers, designers, and distributors United Microelectronics, Chartered
networks or link devices. Includes bulk cable, of electronic parts and components for Semiconductor Manufacturing, SMIC
connectors, and adapters, among others. use in more advanced products. Includes
processors, video cards, sound cards, fans, 6.3.4 Other Semiconductors
Ex: Belkin, AMP Inc., Griffin Technology, and motherboards, among others.
Molex 6.4 Services
Ex: Intel, Advanced Micro Devices (AMD),
6.1.3 Fiberoptic Equipment - Manufacturers 6.4.1 Consulting and Outsourcing - Providers
Texas Instruments, NVIDIA
of fiber optic and photonics equipment. of outside consulting, outsourcing, or
Includes bulk cable, connectors, lasers, and 6.2.3 Electronic Equipment and Instruments offshoring services. Includes subcontractors,
light emitting diodes (LEDs), among others. - Manufacturers, designers, and distributors and business process outsourcers, among
of electronic equipment and instruments. others.
Ex: Oplink Communications, Optical Includes multimeters, and oscilloscopes,
Communication Products, Belden Ex: Gartner, Infosys Technologies, Sapient
among others. This category is for electronic
Corporation
testing and measurement devices.
6.1.4 Internet Service Providers - Providers
of dial-up and DSL access to the internet. 6.4.2 Systems and Information -
Ex: Agilent Technologies, National
Management Providers of systems and
Instruments, Tektronix, Chase Scientific
Ex: America Online, NetZero, EarthLink, information management services. Includes
Juno, PeoplePC 6.2.4 Office Electronics - Manufacturers, companies providing IT hosting and data
designers, and distributors of office centers, among others.
6.1.5 Telecommunications Service Providers
equipment. Includes copiers and faxes,
- Providers of commercial and residential Ex: Rackspace, Network World, Mosso
among others.
voice and data services. Includes phone
service, paging, and voicemail, among others. 6.4.3 Other IT Services
Ex: Xerox, Ricoh, Lanier
Ex: BellSouth, AT&T, Qwest, Vodafone, Airtel 6.5 Software

6.2.5 Storage - Manufacturers, designers,
and distributors of electronic storage 6.5.1 Application Software - Developers and
6.1.6 Wireless Communications Equipment
devices. Includes hard drives, optical drives, producers of software for specific tasks or
- Manufacturers, designers and marketers
and flash memory, among others. applications. Includes general application
of wireless communications equipment.
Includes wireless handsets, and wireless software not classified elsewhere.
Ex: Seagate Technology, EMC, Western
modems and routers, among others. Digital Ex: Microsoft, Oracle, Adobe
Ex: LG, Motorola, Cisco 6.2.6 Other Hardware 6.5.2 Automation/Workflow Software -
6.1.7 Wireless Service Providers - Providers Developers and producers of software for
6.3 Semiconductors
of wireless telephone networks. Includes automation and workflow management.
cellular telephone service, and personal 6.3.1 Application Specific - Manufacturers Includes automation of IT processes, data
communication service (PCS), among others. and designers of application specific transferring, FTPs, and scheduling, among
semiconductors and integrated circuits. others.
Ex: Verizon Wireless, Qualcomm, Nextel
Partners Ex: First Solar, NVIDIA, Linear Technology Ex: Tethys Solutions, Parallels, Synopsys
6.1.8 Other Communications and 6.3.2 General Purpose - Manufacturers and 6.5.3 Business/Productivity Software -
Networking designers of generic or general purpose Developers and producers of software for
semiconductors and integrated circuits. the enterprise where the focus is on process
6.2 Hardware management and automation.
Ex: Intel, Texas Instruments,
6.2.1 Computers, Parts and Peripherals - STMicroelectronics Ex: Salesforce, IBM, Microsoft
Manufacturers, designers, and distributors
of computers and peripherals. Includes 6.3.3 Production - Owners and operators 6.5.4 Communication Software -
monitors, cases, mice, keyboards, and of semiconductor foundries. “Foundries” Developers and producers of software
printers, among others. are companies that manufacture for communicating electronically through
semiconductors, but are not involved in their voice, video or text. Includes text and video
Ex: Dell, Apple, Hewlett-Packard, Sony, IBM design. chat, web conferencing, and web-based
presentations, among others.
Ex: America Online, Microsoft, WebEx

69
Data provided by
6.5.5 Database Software - Developers and 6.5.12 Operating Systems Software - 7.1.4 Horticulture - Companies that cultivate
producers of software to manage and utilize Developers and producers of computer and market grains, fruits, flowers, and
information in databases. Includes MySQL, operating systems. vegetables.
Microsoft SQL Server, and Oracle, among
others. Ex: Apple, Microsoft, Red Hat Software, Ex: Cargill, Archer Daniels Midland, The
Novell Andersons, Inc.
Ex: Microsoft, Oracle, IBM, Sun
Microsystems 6.5.13 Social/Platform Software - 7.1.5 Other Agriculture
Developers and producers of software that
6.5.6 Educational Software - Developers and facilitates the production, distribution or 7.2 Chemicals and Gases
producers of educational software. following of social content. The category also
7.2.1 Agricultural Chemicals - Producers of
includes online markets.
Ex: Renaissance Learning, Scientific Learning chemicals used primarily in an agricultural
Corporation, The Learning Company Ex: Facebook, LinkedIn setting. Includes diammonium phosphate
(DAP), anhydrous ammonia (NH3), and
6.5.7 Entertainment Software - Developers 6.5.14 Software Development Applications potassium chloride (KCl), among others.
of consumer-oriented gaming software and - Developers and producers of software
applications. for planning, coding, and debugging of Ex: Monsanto, Mosaic, CF Industries
new software. Includes compilers, build Holdings
Ex: Zynga, Rovio tools, debuggers, disassemblers, and
7.2.2 Commodity Chemicals - Producers of
documentation generators, among others.
6.5.8 Financial Software - Developers chemicals that are sold in bulk due to their
and producers of software for managing Ex: Eiffel Software, Borland Software, BigFix low cost. Includes methane, hydrochloric
accounting and financial processes. Also acid, chlorine, and sodium chloride, among
includes various software developed 6.5.15 Vertical Market Software - others.
specifically for the financial industry. Developers and producers of vertical market
software. Includes point of sale software, Ex: Mitsubishi Chemical, Terra Nitrogen,
Ex: Intuit, CapControls, Merlin Securities, among others. A vertical market is a group ExxonMobil
Tally, Finacle of companies that do business in the same
7.2.3 Industrial Chemicals - Producers
industry.
6.5.9 Internet Software - Developers and of chemicals used primarily in industrial
producers of software for accessing and Ex: SAP, Hypercom, Ingenico applications. Includes plastics, biocides,
manipulating internet content. Includes coolants, and polyglycols, among others.
internet browsers, and file transfer protocol 6.5.16 Other Software
(FTP) programs, among others. Ex: Celanese, FMC Corp., Archer Daniels
6.6 Other Information Technology Midland
Ex: Apple, Microsoft, Mozilla Foundation,
Norwegian Opera Software 6.6.1 Other Information Technology 7.2.4 Multi-line Chemicals - Producers of
diversified chemicals.
6.5.10 Multimedia and Design Software 7 Materials & Resources
- Developers and producers of software Ex: Dow Chemical, Air Products and
7.1 Agriculture Chemicals, FMC Corp., DuPont
for creating and manipulating multimedia
content. Includes Computer Aided Design 7.1.1 Animal Husbandry - Companies that 7.2.5 Specialty Chemicals - Producers
(CAD) software, and video and image editing breed, raise, and market livestock. of proprietary or advanced chemical
software, among others.
compounds. Includes food additives, and
Ex: Seaboard Corp., Smithfield Foods, Alico
Ex: Adobe Systems, Quark, Autodesk polymers, among others.
7.1.2 Aquaculture - Companies that cultivate
6.5.11 Network Management Software Ex: Sigma-Aldrich, Lubrizol, Cytec Industries
and market aquatic organisms. Includes fish,
- Developers and providers of software shrimp, kelp/seaweed and cultured pearls, 7.2.6 Other Chemicals and Gases
and systems for managing and organizing among others.
networks and information. Includes network 7.3 Construction (Non-Wood)
monitoring software, and network security Ex: Stolt Sea Farm, D.B. Kenney Fisheries,
software, among others. America’s Catch 7.3.1 Raw Materials (Non-Wood) -
Harvesters or producers of non-wood
Ex: Altiris, Tivoli, NetIQ 7.1.3 Cultivation construction materials. Includes stone,
gravel, sand, cement, and bricks, among
70
Data provided by
others. Finished construction products are 7.6.1 Aluminum - Miners, producers and 7.7.4 Synthetic - Manufacturers of synthetic
classified under Building Products. marketers of aluminum. Includes aluminum textiles. Includes polyester, aramid, nylon
ore, and rolled aluminum, among others. and spandex, among others.
Ex: Texas Industries, Eagle Materials, Hanson
Aggregates North America Ex: Alcoa, Kaiser Aluminum, Alcan Ex: Huitong Chemical, Unifi, DuPont-Akra
Polyester
7.4 Containers and Packaging 7.6.2 Coal - Miners, producers and marketers
of coal. Includes lignite coal, bituminous coal, 7.7.5 Other Textiles
7.4.1 Metal - Producers of metal containers anthracite coal, and coke, among others.
and packaging materials. 7.8 Other Materials
Ex: Peabody Energy, CONSOL Energy,
Ex: Ball Corporation, Greif Inc., Silgan Drummond Company 7.8.1 Other Materials
Holdings
7.6.3 Gold - Miners, producers and
7.4.2 Paper - Producers of paper containers marketers of gold.
and packaging materials.
Ex: Newmont Mining, AngloGold Ashanti,
Ex: Packaging Corporation of America, Gold Fields Limited
International Paper, Georgia-Pacific
7.6.4 Iron and Steel - Miners, producers and
7.4.3 Plastic - Producers of plastic containers marketers of iron and steel.
and packaging materials.
Ex: Nucor, Olympic Steel, ArcelorMittal
Ex: Ball Corporation, Sonoco, Silgan
Holdings 7.6.5 Multi-line - Miners, producers and
marketers of diversified metals and minerals.
7.4.4 Wood - Producers of wood containers
and packaging materials. Ex: BHP Billiton, Rio Tinto, Teck Cominco
Ex: Greif Inc., Berry Industrial Group, 7.6.6 Precious Metals and Minerals - Miners,
Universal Forest Products producers and marketers of precious metals
and minerals. Includes platinum, silver, and
7.4.5 Other Containers and Packaging palladium, among others.
7.5 Forestry Ex: Coeur d’Alene Mines, Stillwater Mining,

Metalor
7.5.1 Forestry Development/Harvesting
- Companies engaged in developing and 7.6.7 Other Metals, Minerals and Mining
harvesting forested areas.
7.7 Textiles
Ex: Weyerhaeuser, Deltic Timber, MAXXAM
7.7.1 Animal - Manufacturers of animal-
7.5.2 Forestry Processing - Companies based textiles. Includes wool, cashmere and
engaged in converting raw forest products silk, among others.
into marketable materials. Includes lumber,
woodchips, engineered wood products, and Ex: Buckskin Fur and Leather, J. Hewit and
paper products, among others. Sons
Ex: Weyerhaeuser, Louisiana-Pacific, 7.7.2 Plant- Manufacturers of plant-based

Stimson Lumber, Pope and Talbot, Georgia- textiles. Includes hemp and cotton, among
Pacific, Boise Cascade, Temple-Inland Forest others.
Products
Ex: Parkdale Mills, Boston Felt Company,
7.5.3 Paper/Soft Products Aetna Felt Corporation
7.5.4 Wood/Hard Products 7.7.3 Mineral - Manufacturers of mineral-

based textiles. Includes asbestos, glass fiber,
7.5.5 Other Forestry and metal fiber, among others.
7.6 Metals, Minerals and Mining Ex: Roxul, Potter and Soar, Central Glass
71
Data provided by
Timeline
22-Nov-2013
72

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YE ARBOOK

nvca.org | [email protected] | 202-864-5920 ALEXIS BORISY Third Rock Ventures, Chair

PitchBook Data, Inc. LISA LAMBERT National Grid Ventures

Public market volatility at the end of

Highlights of the U.S. venture ecosystem in 2018:

CAPITAL DEPLOYED TO STARTUPS (More details starting on page 23)

EXIT LANDSCAPE (More details starting on page 33)

** Calculated as compound annual growth rate.

Venture Capital 101

Growth Businesses on investment provides additional funding

Venture Capital Plays a Vital Role in a Startup’s Growth

Concept, Product Operational, Growth Expansion

included results from a survey of 889 providing strategic and operational

The VC Fund Structure

Venture Capital Firm Limited Partners

Fund manager Ownership of the fund

Venture Capital Fund

Fund ownership of portfolio companies

Investment Investment Investment Investment Investment

money is taken from Limited Partners

How Venture Capital Works

Fundraising Investment Company Growth Exit Returns Re-investment

The Impact of Venture- A 2015 study, The Economic Impact of

However, the rest of the world is catching

At-A-Glance: The U.S.

Thanks to a strong VC fundraising year in VC AUM ($B) 204.5 253.7 403.5

Median VC Fund Size to Date ($M) 50.0 50.0 45.4

accounted for 73% of the country’s AUM.

Total AUM ($B)

figure since firms frequently invest in

making first round investments also declined 150

Total Total Firms that Raised Avg Firm Median Median

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

Number of Active Investors (#)

U.S. as a % of Global VC Deal Flow by Year

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

Active Investor count in 2018 deals by HQ state

U.S. as a % of Global VC Exits by Year

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

Active Investor count in 2018 deals by Investor HQ State

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

U.S. as a % of Global VC Fundraising by Year

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

AUM by State 2018 ($M)

6,405.44 67.32 72.82 918.13

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

Top 5 States by AUM in

New York 56.00

Source: NVCA 2019 Yearbook, Data Provided by PitchBook

AUM by As of Year by State ($M)

Alabama 149.09 166.42 183.22 174.96 176.88 168.50 166.57 151.91

Arizona 96.07 90.64 89.95 80.03 71.31 65.74 51.81 93.83

California 73,452.53 81,792.14 96,984.68 104,372.02 111,139.84 113,180.54 118,938.43 127,496.25

Colorado 1,461.00 1,280.05 1,190.60 1,748.00 1,665.34 1,557.91 1,946.44 1,907.10

Connecticut 6,306.07 7,287.30 10,160.91 10,580.67 9,504.82 9,573.97 9,897.09 9,485.17

Delaware 8.50 6.07 24.11 17.46 12.66 11.44 11.83 11.75

Florida 1,002.77 1,292.62 1,260.91 1,515.82 1,571.55 1,548.03 1,531.42 1,480.28

Georgia 865.19 896.36 1,204.87 1,308.52 1,210.95 1,296.65 1,524.51 1,551.14

Hawaii 7.62 6.80 7.03 6.88 7.20 6.99 6.29 5.72

Idaho 23.71 22.01 21.91 94.11 81.71 78.88 94.82 95.80

Illinois 3,311.23 3,288.42 3,948.46 4,389.52 4,514.67 4,410.87 4,783.77 5,594.44

Indiana 345.34 318.79 308.16 289.51 240.96 221.20 207.58 182.32

Iowa 30.93 28.71 28.58 26.54 21.34 18.20 16.43 14.37