U.S. Venture Capital Update

U.S. Venture Capital Update Nizar Tarhuni, Analysis Manager PitchBook Data, Inc. nizar.tarhuni@pitchbook.com Test drive PitchBook demo@pitchbook.com

THE PITCHBOOK PLATFORM The financial informanon technology trusted by leading investors, companies and advisors 26,624 LPs 93,086 Commitments 146,185 GPs/Investors 33,157 Funds 502,371 Performance Data Lines 687,996 PorRolio Companies 475,628 TransacNons 112,169 ValuaNons 24,903 Advisory Firms 1,070,406 People

NaNonal VC Trends

VC fundraising reaches decade- high U.S. VC fundraising $45 300 268 255 253 $40 Capital Raised ($B) # of Funds Closed 250 $35 $30 193 183 198 190 204 200 $25 153 141 150 $20 122 $15 100 $10 50 $5 $0 $36.4 $34.9 $36.2 $12.0 $19.6 $23.3 $24.4 $20.6 $35.4 $35.2 $41.6 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* 0 Source: Q4 PitchBook- NVCA Venture Monitor

Bulk of managers closing funds in 2016 reached target U.S. VC funds (#) hi_ng target 100% 15 27 40 24 38 27 38 33 46 47 28 77 103 41 39 24 80% 33 42 51 60% 40% 158 160 170 20% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* Hit Target Missed Target Source: Q4 PitchBook- NVCA Venture Monitor

First- Nme managers raised most capital since 2008 U.S. first- Nme VC funds by year $3.5 46 50 $3.0 Capital Raised ($B) # of Funds Closed 45 $2.5 32 32 34 36 40 35 $2.0 $1.5 25 18 26 21 23 22 30 25 20 $1.0 15 10 $0.5 5 $0.0 $3.0 $2.9 $3.0 $1.1 $0.9 $1.9 $1.5 $1.4 $1.8 $1.6 $2.2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* 0 Source: Q4 PitchBook- NVCA Venture Monitor

VC Dry powder at near- record level U.S. VC capital overhang ($B) $120 $100 $95.3B $94.6B 2016 $80 $76.4B $65.7B $72.2B 2015 $60 2014 CUMULATIVE OVERHANG 2013 $40 OVERHANG BY VINTAGE 2012 2011 $20 2010 $0 *Through 6/30/2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2009

$90 $80 $70 While VC invested remained high, 2016 transacnon volume normalized Deal value ($B) U.S. VC deal flow # of deals closed 10,550 10,468 12,000 10,000 $60 $50 $40 4,292 6,771 8,136 8,000 6,000 $30 3,301 4,458 4,000 $20 $10 $0 $29.1 $35.5 $37.2 $26.5 $31.2 $44.3 $40.6 $44.8 $68.9 $79.3 $69.1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2,000 0

$25 Quarterly deal flow follows consistent decline U.S. VC deal flow by quarter 3,000 $20 $15 2,500 2,000 1,500 $10 1,000 $5 500 $0 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 Deal value ($B) # of deals closed Angel/Seed Early VC Later VC

While certainly snll inflated, median early- stage valuanons slightly flaken $45 $40 Median pre- money valuanon ($M) by series $38.65 $38.97 $35 $31.66 $30 $25 $20 $15 $10 $5 $0 $21.33 $19.18 $15.00 $13.16 $11.53 $7.22 $6.45 $4.79 $5.29 $5.94 $1.46 $3.21 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Seed Series A Series B

Median late- stage valuanons nearly double since 2010 $180 $160 Median pre- money valuanon ($M) by series $171.11 $144.88 $140 $136.16 $120 $100 $80 $60 $40 $20 $78.68 $44.45 $65.76 $39.06 $59.50 $71.87 $80.00 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Series C Series D+

Somware connnues to drive deal making U.S. VC deal count by industry 2016 Commercial Services 6.3% 6.2% 6.0% 7.7% 3.8% 1.8% 2.3% 3.1% Consumer Goods & RecreaNon Energy IT Hardware Media Somware 24.8% Other 38.1% Pharma & Biotech HC Devices & Supplies HC Services & Systems *Through 12/31/2016 Source: Q4 PitchBook- NVCA Venture Monitor

West coast dominates acnvity Deal flow by region 6080 31575 14449 Deal count by region 1276 4748 4865 21 7397 5705 Great Lakes Mid- AtlanNc Midwest Mountain New England Other Territory South Southeast West Coast Capital invested by region, $B $24.97 $270.84 Great Lakes Midwest New England South West Coast $74.38 $3.94 $20.14 $56.78 $0.07 $22.65 $24.64 Mid- AtlanNc Mountain Other Territory Southeast

Group of mega- exits keep 2016 exit value nearly flat with 2015 U.S. VC exit flow $90 $80 $70 Exit Value ($B) # of Exits Closed 859 885 1,040 961 1,200 1,000 $60 $50 $40 510 602 465 482 693 733 726 800 600 $30 400 $20 $10 $0 $24.1 $40.8 $18.1 $15.7 $30.3 $36.9 $53.9 $36.2 $81.7 $50.4 $46.8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 200 0

Cash- rich strategics remain VCs best friends U.S. VC- backed exit count by exit type 1200 1000 800 600 400 200 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* AcquisiNon Count IPO Count Buyout Count Source: Q4 PitchBook- NVCA Venture Monitor *Through 12/31/2016

Florida VC Trends

Florida deal volume slides, yet total capital invested remains unchanged Southeast region VC deal Flow FL vs. rest of region $1,600 140 $1,400 $1,200 $1,000 $800 $600 $400 $200 $- 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2010 2011 2012 2013 2014 2015 2016 Florida Capital ($M) Southeast (excl. FL) Capital ($M) Florida Deal # Southeast (excl. FL) Deal # 120 100 80 60 40 20 0

250 Angel/seed rounds connnue to represent the bulk of Florida VC Florida VC deal count by stage 200 196 192 150 137 100 50 0 36 25 54 65 50 53 37 25 41 30 16 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 25 Angel/Seed Early VC Later VC

$25 Early- stage valuanons rise across the Southeast region Median early- stage pre- money valuanon ($M) $22.0 $20 $15 $10 $5 $9.1 $6.3 $9.9 $11.0 $8.6 $0 2011 2012 2013 2014 2015 2016 Florida Early Stage Southeast (excl. Florida) Early Stage

$100 $90 $80 $70 $60 Florida late- stage valuanons drop, yet Southeast region unchanged Median later- stage pre- money valuanon ($M) $63.5 $49.0 $86.4 $50 $40 $30 $20 $10 $23.8 $18.2 $31.6 $0 2011 2012 2013 2014 2015 2016 Florida Later Stage Southeast (excl. Florida) Later Stage

In step with the broader market, first Nme financings in Florida slump $300 $250 $200 $188M Florida first financings by year $202M 150 $271M 117 $199M 160 140 120 100 $150 64 $142M 88 80 $100 $50 29 60 40 20 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 Capital Invested ($M) Deal Count

Company Name Top deals 2016 in Florida Close Date Deal Size ($M) City Industry Code Magic Leap 2/2/2016 $793.5 Dania Beach Computers, Parts and Peripherals JetSmarter 12/12/2016 $105 Fort Lauderdale ApplicaNon Somware Reven PharmaceuNcals 2/1/2016 $100 Sarasota Biotechnology Rental Equipment Investment 6/1/2016 $59.5 Miami Beach Other Business Products and Services Finova Financial 8/4/2016 $52.5 Palm Beach Gardens Consumer Finance Woundtech 8/4/2016 $40 Hollywood Other Healthcare Technology Systems Surterra 12/11/2016 $35 Tampa Drug Discovery Open Blue Sea Farms 8/10/2016 $23 Miami Aquaculture Fountainhead 5/4/2016 $23 Orlando Specialized Finance Sliderz UL 7/20/2016 $21 Miami Restaurants and Bars

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Outsized propornon of capital si_ng in largest fund buckets U.S. capital raised by fund size 100% 90% $1B+ 80% $500M-$1B 70% 60% $250M-$500M 50% 40% $100M-$250M 30% 20% $50M-$100M 10% Under $50M 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* Source: Q4 PitchBook- NVCA Venture Monitor

$7,000 U.S. East Coast VC deal flow by quarter 1000 $6,000 $5,000 900 800 700 $4,000 $3,000 600 500 400 $2,000 $1,000 300 200 100 $- Qtr1Qtr2Qtr3Qtr4Qtr1Qtr2Qtr3Qtr4Qtr1Qtr2Qtr3Qtr4Qtr1Qtr2Qtr3Qtr4Qtr1Qtr2Qtr3Qtr4Qtr1Qtr2Qtr3Qtr4Qtr1Qtr2Qtr3Qtr4 2010 2011 2012 2013 2014 2015 2016 0 Capital Invested ($B) Deal count (#)

$18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $- U.S. West Coast VC deal flow by quarter Qtr1 Qtr3 Qtr1 Qtr3 Qtr1 Qtr3 Qtr1 Qtr3 Qtr1 Qtr3 Qtr1 Qtr3 Qtr1 Qtr3 2010 2011 2012 2013 2014 2015 2016 1400 1200 1000 800 600 400 200 0 Capital Invested ($B) Deal count (#)

$18 $16 U.S. VC rounds valued over $1 billion $16.3B 65 67 $15.7B 80 70 $14 $13.3B 60 $12 50 $10 $8 $6 $4 $2 $0.4B $5.4B 19 21 $2.7B 36 40 30 20 10 $0 4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 0 Capital invested ($B) Deal count