11

National Venture Capital AssociationNational Venture Capital Association

2008 Predictions Survey2008 Predictions Survey

All data embargoed until:All data embargoed until:

December 17, 2007

22

NVCA 2008 Venture Capital NVCA 2008 Venture Capital Predictions SurveyPredictions Survey

Second annual predictions surveySecond annual predictions survey Conducted in December 2007Conducted in December 2007 More than 170 respondentsMore than 170 respondents Quotes and press release available – Quotes and press release available –

contact Emily Mendell (610-565-3904)contact Emily Mendell (610-565-3904)

33

Venture InvestmentVenture Investment

44

How much will venture capitalists invest in How much will venture capitalists invest in 2008?2008?

3.5%

71.3%

24.6%

0.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

10-19 BN 20-29 BN 30-39 BN 40 + BN

Mean = $26.8 billionMedian = $27 billionRange: $18 – 43 billion

Source: NVCA 2008 Predictions Survey

55

Of which single global investment region Of which single global investment region are you most leery? are you most leery?

1.8%

2.4%

2.4%

8.4%

16.8%

27.5%

36.5%

0% 10% 20% 30% 40%

US

India

Canada

Other Asia

Eastern Europe

China

South America

Source: NVCA 2008 Predictions Survey

66

Predictions for high growth investment Predictions for high growth investment sectors in 2008sectors in 2008

36.4%9.1%

54.5%

31.9%12.7%

55.4%

25.0%10.4%

64.6%

8.4%12.0%

79.5%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Internet

Biotech

Media

CleanTech

Flat Decrease Increase

Source: NVCA 2008 Predictions Survey

77

Predictions for moderate growth Predictions for moderate growth investment sectors in 2008investment sectors in 2008

34.9%

22.3%

42.8%

49.4%

12.0%

38.6%

0% 10% 20% 30% 40% 50%

Wireless Telecom

Med Devices

Flat Decrease Increase

Source: NVCA 2008 Predictions Survey

88

Predictions for lower growth investment Predictions for lower growth investment sectors in 2008 sectors in 2008

48.8%

21.1%

30.1%

36.6%

49.7%

13.7%

0% 10% 20% 30% 40% 50%

Software

Semiconductors

Flat Decrease Increase

Source: NVCA 2008 Predictions Survey

99

Which single industry will be Which single industry will be overvaluedovervalued in in 2008?2008?

61%

18%12%

9%

0%

10%

20%

30%

40%

50%

60%

70%

Cleantech Internet Media Other

Source: NVCA 2007 Predictions Survey

1010

Which single industry will be Which single industry will be undervaluedundervalued in 2008?in 2008?

28%

23%

12%11% 10%

0%

5%

10%

15%

20%

25%

30%

Semiconductors Software Medical Devices None Biotech

Source: NVCA 2008 Predictions Survey

1111

Venture ExitsVenture Exits

1212

In 2008, the venture-backed U.S. IPO In 2008, the venture-backed U.S. IPO market will…market will…

59%22%

19%

Continue Recovery Remain Flat Weaken

Source: NVCA 2008 Predictions Survey

15 % faster pace than 200720 % slower pace to 200724 % equal pace to 2007

1313

Which stock exchanges hold the most Which stock exchanges hold the most promise for growth for venture backed promise for growth for venture backed

companies in 2008? companies in 2008? 69.6%

19.3% 16.4% 14.6% 11.1%

0%

10%

20%

30%

40%

50%

60%

70%

NASDAQ AIM HongKong

Shenzen Bombay

Source: NVCA 2008 Predictions Survey

1414

In 2008, transaction In 2008, transaction volumevolume in the venture- in the venture-backed M&A market will…backed M&A market will…

55%

15%

30%

Increase Decrease Remain level

Source: NVCA 2008 Predictions Survey

1515

In 2008, transaction In 2008, transaction valuevalue in the venture- in the venture-backed M&A market will…backed M&A market will…

35%

27%

38%

Increase Decrease Remain level

Source: NVCA 2008 Predictions Survey

1616

Venture FundraisingVenture Fundraising

1717

On average, venture capital funds On average, venture capital funds raised in 2008 will be …raised in 2008 will be …

16%

41%

43%

Smaller Larger Same Size

Source: NVCA 2008 Predictions Survey

1818

In 2008, we will see the number of In 2008, we will see the number of venture capital firms…venture capital firms…

17%

26%57%

Increase Stay the same Decrease

Source: NVCA 2008 Predictions Survey

1919

Venture PerformanceVenture Performance

2020

How will venture capital performance How will venture capital performance change over time?change over time?

77%

5%

18%

Improve Decline Remain Same

81%

4%

15%

Improve Decline Stay Same

Short Term Returns (1-5 years) Long Term Returns (5-10 years)

Source: NVCA 2008 Predictions Survey

2121

US Economic and Political PredictionsUS Economic and Political Predictions

2222

How will the US economy trend in How will the US economy trend in 2008?2008?

19%

61%

20%

Imrpove Decline Unchanged

Source: NVCA 2008 Predictions Survey

2323

Will the sub-prime credit woes be Will the sub-prime credit woes be contained in 2008?contained in 2008?

60%

40%

Yes No

Source: NVCA 2008 Predictions Survey

2424

Where will the price of oil be in Where will the price of oil be in December 2008?December 2008?

55%41%

4%

Above $92/barrel Below $92/barrel At $92/barrel

Source: NVCA 2008 Predictions Survey

2525

What will happen to the value of the What will happen to the value of the US dollar in 2008? US dollar in 2008?

39%

42%

19%

Increase Decrease Remain level

Source: NVCA 2008 Predictions Survey

2626

Who will be sworn in as US president in Who will be sworn in as US president in January 2009? January 2009?

39%

21%

16%

11%13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

HillaryClinton

RudyGiuliani

BarackObama

MittRomney

Other

Source: NVCA 2008 Predictions Survey

2727

Venture Capital Historical DataVenture Capital Historical Data

2828

VC Fundraising 1996 – 2007 (thru Q3)VC Fundraising 1996 – 2007 (thru Q3)

Source: VentureXpert™ Database by VE & NVCA

0.0

20.0

40.0

60.0

80.0

100.0

120.0

$B Gross 10.1 11.6 18.1 30.6 58.2 106.6 38.0 3.8 10.6 19.0 28.3 31.7 20.7

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20069mos 2007

2929

Venture Capital Investment1995 – Q3 2007

Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report; Data: Thomson Financial

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$ M

illi

on

In

ve

ste

d

1995

199

6

1997

199

8

199

9

2000

200

1

2002

200

3

2004

2005

2006

200

79M

3030

Venture Exit Counts- Venture Exit Counts- IPOs and M&A by YearIPOs and M&A by Year

Source: Thomson Financial/National Venture Capital Association

0

100

200

300

400

500

600

700

Year

Nu

mb

er o

f Is

sues

M&A

IPO

M&A 17 76 74 100 97 116 164 209 240 317 353 316 293 339 347 340 229

IPO 156 181 220 166 202 270 136 77 260 264 41 24 29 93 56 57 55

91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '069m07

3131

Private Equity Returns As of 6/30/07Private Equity Returns As of 6/30/07

Source: Thomson Financial/National Venture Capital Association

9%7%6%4%NASDAQ

8%7%4%10%S&P 500

14%11%9%21%All PE

13%9%11%22%Buyouts

16%21%3%18%> All VC

14%10%5%24%Later VC

14%18%6%25%Balanced VC

21%40%-1%8%Early VC

20 yr10 yr5 yr1yrFund Type

3232

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