NVCA 2020 Yearbook

Y E ARBOOK
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Credits & Contact
National Venture Capital Association NVCA Board of Directors 2019-2020

(NVCA)
EXECUTIVE COMMITTEE
Washington, DC | San Francisco, CA | Palo Alto, CA
nvca.org | [email protected] | 202-864-5920

JAN GARFINKLE Arboretum Ventures, Chair
BARRY EGGERS Lightspeed Venture Partners,
BOBBY FRANKLIN President and CEO Chair-Elect
JEFF FARRAH General Counsel DENISE MARKS SV Health Investors, Treasurer
JUSTIN FIELD Senior Vice President of Government ANDY SCHWAB 5AM Ventures, Secretary
Affairs MICHAEL BROWN Battery Ventures, At-Large
MARYAM HAQUE Senior Vice President of Industry RICH WONG Accel, At-Large
Advancement, NVCA; Executive Director, Venture MAHA IBRAHIM Canaan Partners, At-Large
Forward
STEPHANIE VOLK Vice President of Development AT-LARGE
HANNAH MUNIZZA Senior Director of

Development BRUCE BOOTH Atlas Venture
RHIANON ANDERSON Programs Director, Venture DIANE DAYCH Granite Growth Health Partners
Forward RYAN DRANT Questa Capital
ALLYSON CHAPPELL Director of Conferences & PATRICK ENRIGHT Longitude Capital
Events STEVE FREDRICK Grotech Ventures
CASSIE ANN HODGES Director of Communications CHRIS GIRGENTI Pritzker Group Venture Capital
CHARLOTTE SAVERCOOL Director of Government JOE HOROWITZ Icon Ventures
Affairs GEORGE HOYEM In-Q-Tel
MICHELE SOLOMON Director of Administration CHARLES HUDSON Precursor Ventures
DEVIN MILLER Manager of Communications & NAGRAJ KASHYAP M12
Digital Strategy MARK KVAMME Drive Capital
JONAS MURPHY Manager of Government Affairs LISA LAMBERT National Grid Ventures
EMILY VARADY Executive Assistant MOHAMAD MAKHZOUMI NEA

EMILY MELTON Threshold Ventures
PATRICIA NAKACHE Trinity Ventures
PitchBook Data, Inc.
VIC PARKER Spectrum Equity
pitchbook.com
WILL PRICE Next Frontier Capital
RESE ARCH
RENATA QUINTINI Lux Capital
[email protected]
SCOTT RANEY Redpoint Ventures
EDITORIAL
GLENN RIEGER NewSpring Capital
[email protected]
PHIL SANDERSON Griffin Gaming Partners
SALES
DANA SETTLE Greycroft
[email protected]
JOHN SOMORJAI Salesforce Ventures
JENNIFER TEGAN Cayuga Venture Fund
JOHN GABBERT Founder, CEO
NICOLE WALKER Baird Capital
ADLEY BOWDEN Vice President,
DAVID YORK Top Tier Capital Partners
Market Development & Analysis
DATA AND DESIGN
VAN LE Senior Data Analyst

AMBER HENDRICKS Lead Copy Editor
CAROLINE SUT TIE Junior Graphic Designer
This publication has been created for the National Venture Capital Association by PitchBook Data, Inc. COPYRIGHT © 2020
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Contents
Dear Readers 4
Executive Summary 5-7
Venture Capital 101 8-11
The US Venture Industry At-A-Glance 12-19
Capital Commitments: Venture Fundraising 20-23
Capital Deployed: Investment into Venture-
24-33
backed Companies
Exit Landscape: Venture-Backed IPOs &
34-37
M&As
NVCA Decade in Review 38-40
What’s Ahead for 2020 41
2019 NVCA Public Policy Initiatives 43-44
NVCA Member Community - Diverse,
45-46
Engaged, Committed
Glossary 47-58
Data Methodology 59
Geographic Definitions 60
Industry Code Definitions 61-70
3
N VC A 2020 Y E A RBOOK
Data provided by
Dear Readers
March 2020
Dear Readers:
With NVCA’s 23rd annual Yearbook, we District of Columbia, 242 metropolitan an industry that has grown larger and
close the books on a vibrant decade for statistical areas, and 397 Congressional more complex. The data and analysis
the US venture capital (VC) industry. Districts across the country—raised in the Yearbook unpack these trends
We start a new decade of uncovering $133 billion to help build, grow, and scale for seasoned industry veterans and
the potential of budding entrepreneurs, their businesses. At the same time, 270+ newcomers. We also offer resources on
innovative technologies, and the next venture funds closed on $50+ billion to what VC is, how it works and why it’s
generation of American companies that deploy into promising startups. important, and a glossary of important
will fuel the economy of the 2020s and terms to reference.
Perhaps most noteworthy was the
beyond.
industry’s exit activity ending on a high The Yearbook and its supporting data
VC experienced an unprecedented note in 2019, with record IPO exit value may be accessed three ways: 1) this PDF
transformation in the 2010s. The industry generated from several startups that report; 2) the PDF data pack, which is
received their first venture funding in available to the public; and 3) the XLS
today looks very different than it did
the late 2000s and early 2010s. The VC data pack, which is available only to
10 years ago, when we were slowly
industry ended the decade with 1,300+ NVCA members. We hope you find this
recovering from the 2008 global financial
active institutional venture investors industry resource helpful and encourage
crisis. We’re excited to release the 2020
managing a total of $444 billion in VC you to share your feedback with us. We
NVCA Yearbook, highlighting not only
assets. thank all of our NVCA members whose
important trends from the past year but
support makes resources like these and
also the past decade. We look at how On the surface, the trends in US VC
our advocacy efforts possible!
VC has evolved, the impact it continues assets under management, active
to have on our economy and society, investors, fundraising, investments, Here’s to another vibrant decade of VC
and the role of NVCA in the venture and exits are all “up and to the right,” activity!
ecosystem. but there’s more nuance that reflects
Critical to the growth and health of VC

is public policy that encourages new
company formation and makes the
US the most attractive place to start
and grow a business. 2019 proved an
important year for NVCA’s advocacy on
foreign investment legislation, capital
markets reform, high-skilled immigration,
and new regulatory proposals.
Bobby Franklin Maryam Haque
Against the backdrop of several critical President and CEO Senior Vice President of
public policy debates in Washington, Washington, DC Industry Advancement, NVCA
the VC industry surged in the latter half [email protected] Executive Director, Venture
of the decade. In the last year of the Forward
2010s, more than 10,000 venture-backed San Francisco, CA
companies—across 50 states and the [email protected]
4
Data provided by
Executive Summary
The US venture capital (VC) industry ended the decade on a high note in 2019. For the second consecutive year, high-growth startups
raised more than $130 billion, and 2019 represented the second year on record (after 2015) where more than 10,000 venture-backed
companies received an investment. From 2010 to 2019, investors deployed $761 billion into 87,000+ venture-backed companies
across 94,000+ financings to start, build, and grow their businesses across the country.
The VC industry grew steadily over the decade. At the end of 2019, there were 1,328 venture firms in existence, managing 2,211
active venture funds and translating to approximately $444 billion in US venture capital assets under management. Compared to
2010, this represents a growth of: 65% in number of firms, 73% in venture funds, and 87% in VC assets under management.
As the numbers of venture firms, startups, and available capital expanded in 2019, so did the prevalence of mega-funds and mega-
deals, most of which have been concentrated in a few metro areas on the coasts. However, these few metro areas do not have a
monopoly on talent and innovation. Startups and investors across the country continue to disrupt industries, create new sectors, and
fuel the next era of transformative American companies. And investors on the coasts are taking notice.
An important trend over the past decade has been the wave of new participants in the venture ecosystem. These include the surge
in first-time funds raised and companies receiving their first venture investment. The industry has also seen an evolution in the
investor base, with traditional venture funds now part of a broad mix of capital sources available to startups, i.e., accelerators,
incubators, angel groups, corporate venture group, growth equity firms, platforms like AngelList, mutual funds, hedge funds, and
sovereign wealth funds. And while the venture ecosystem still has a long way to go to demographically reflect the broader population
of our country, the industry has made some progress towards lowering barriers and increasing opportunities for historically
underrepresented founders and funders.
The start of a new decade brings a wave of excitement to the venture industry after riding on the waves of robust activity to end the
2010s. Many of the companies that will be making headlines ten years from now for their innovation, disruption, and value creation
are the ones being funded today.
Highlights of the US venture ecosystem in 2019

CAPITAL COMMITMENTS TO VENTURE FUNDS (More details starting on page 20)
• Venture capital investors raised $51 billion across 272 funds to deploy into promising startups, marking the fifth consecutive year
of $35 billion or more raised.
• 35 first-time funds raised $4.0 billion in commitments last year, both a drop from 2018’s 15-year high.
• TCV’s $3.2 billion final close for its tenth fund was the largest VC fund closed last year, one of eight funds closed at $1 billion or
more.
• VC funds based in 26 states and the District of Columbia held final closes on venture funds in 2019, with Connecticut, Ohio,
Illinois, the District of Columbia, Georgia, and Michigan seeing the biggest year-over-year absolute gains.
• The overall US median VC fund size in 2019 was $80 million, the highest since 2008 and a 7% increase from 2018.
• Outside of California, Massachusetts, and New York, median VC fund size reached $43 million in 2019, an increase of 57%
compared to 2018, but still relatively small to the dominant venture hubs—the median for California, Massachusetts, and New
York, collectively, was $100 million.
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Data provided by
CAPITAL DEPLOYED TO STARTUPS (More details starting on page 24)
• 10,430 venture-backed companies received $133 billion in funding in 2019, the second consecutive year more than $130 billion
has been invested.
• The 237 mega-deals (i.e., investments of $100 million+ into venture-backed companies) recorded in 2019 is the highest annual
deal count on record and accounted for nearly half (40%) of total capital invested in 2019.
• Unicorns (i.e., venture-backed companies valued at $1 billion+), many of which raised mega-deals, attracted $37 billion, or
27% of total capital invested, but 1.4% of the total deals completed last year.
• The number of angel/seed VC investments in 2019 remained steady compared to 2018, with 4,760 deals completed
representing 42% of total deals in 2019. Angel/seed deal count last year was more than 2.7x higher than in 2010.
• Nearly 4,000 early-stage investments closed in 2019, representing a little over one-third of total deal count. Early-stage VC
grew 1.8x in absolute terms but dropped to 34% from 39% of deal share compared with 2010.
• Later-stage VC investments surged in the latter part of the decade, reaching more than 2,700 closed in 2019 and a 1.7x
increase compared with 2010. Last year, later-stage deals comprised about one-quarter of total deal count.
• The number of first-time financings (i.e., first round of equity funding in a startup by an institutional venture investor) spiked
in the middle of the decade and returned to pre-2012 levels in 2019. 2,729 companies raised first-time funding and attracted
$11.3 billion, the second highest annual amount of capital invested on record.
• The software sector’s dominance continued in 2019. The life sciences sector has also seen significant growth, with more than
$22 billion invested across 1,487 companies in 2019, accounting for 17% of total capital invested and 14% of total deal count
last year. On a relative basis, both of these metrics are a decline compared with 2010. However, on an absolute basis, 2019 life
science dollars invested and deal count were 2.9x and 1.7x higher, respectively, than 2010.
• 2019 marked the seventh consecutive year where more than 1,200 venture investments involved corporate venture capital
(CVC) participation. In 2019, 24% of all VC deals involved CVC.
• Momentum for growth equity* investment continued in 2019 and grew rapidly over the decade. Investors deployed $66 billion
across 1,217 growth equity investments last year, compared with $19.5 billion deployed across 551 deals in 2010.
• Venture funding reached startups in all 50 states and the District of Columbia, 242 Metropolitan Statistical Areas (MSAs), and
397 Congressional Districts. Buffalo, NY, Boise City, ID, and Richmond, VA saw the biggest growth rate** for annual number of
VC investments over the past five years (for those MSAs with at least 15 in 2019). Bend, OR, Rochester, NY, and Grand Rapids,
MI saw the largest annual growth for VC investment over the past five years (for those MSAs with at least $10 million VC
investment in 2014 and 2019).
• Startups that were venture-backed in 2019 represented approximately 2.27 million*** employees.
• Globally, $257 billion was invested across 23,000+ deals in 2019. The US represented 52% and 49% of the global total,
respectively. In 2010, the US accounted for 67% of global VC dollars and 61% of global VC deal count.
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Data provided by
EXIT LANDSCAPE (More details starting on page 34)
• Venture-backed exit activity was the big story for VC in 2019, a record year for exit value following a buildup of large, late-
stage companies in the private markets.
• The 82 venture-backed IPOs representing $199 billion in exit value in 2019 marked the highest annual exit value on record.
• Venture-backed companies accounted for 43% of all US IPOs in 2019.
• Mergers and acquisitions (M&As) remained strong in the second half of the decade, with six straight years of $40 billion+ in
disclosed exit value. In 2019, 836 M&As (219 with disclosed values) represented a total of $61.4 billion in disclosed exit value, a
6% decrease year-over-year.
• 36 late-stage companies, many of them unicorns, held exits in 2019 for an aggregate exit value of $208 billion, both metrics
representing record highs.
While investors and entrepreneurs had a busy 2019, NVCA led the charge in Washington, DC on several important public policy
issues affecting the ecosystem (see page 43). NVCA also delivered on its mission to arm the venture community for success,
serving as the leading resource for venture capital data, practical education, peer-led initiatives, and networking. Our “Decade in
Review” starting on page 38 highlights several of these in 2019 and over the past ten years.
*Growth equity is not included as a subset of overall VC data in this publication, but is rather its own unique dataset. More details on the methodology are on page
[33].
**Calculated as compound annual growth rate.
***Based on PitchBook’s custom estimation methodology for number of employees at venture-backed companies in the US. Data is as of early November 2019.
Note to readers: Figures for prior years throughout this edition of the Yearbook may be different from last year’s edition due to new and updated information.
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Data provided by
Venture Capital 101

This section offers an overview of
Risk Capital for High- Venture capital is unique as an
what venture capital is, the impact this institutional investor asset class. Venture
unique form of financing has had on Growth Businesses capital funds make equity investments
our economy and society, and why it is in a company whose stock is essentially
Venture capital firms are professional,
important for the future. illiquid and worthless until a company
institutional managers of risk capital
matures five to eight years down the
Venture capital has enabled the United that enable and support the most
road. Follow-on investment provides
States to support its entrepreneurial innovative and promising companies.
additional funding as the company grows.
talent by turning ideas and basic Venture capital supports new ideas that
These “rounds”, typically occurring every
research into products and services that 1) could not be financed with traditional
year or two, are also based on equity in
have transformed the world. Venture bank financing; 2) threaten established
the company, with the shares allocated
capital funds build companies from products and services in a corporation or
among the investors and management
the simplest form—perhaps just the industry; and 3) typically require five to
team based on an agreed “valuation.”
entrepreneur and an idea expressed as a eight years (or longer!) to reach maturity.
However, unless a company is acquired
business plan—to freestanding, mature
or goes public, there is little actual value.
organizations.
Venture capital is a long-term investment.
Venture Capital Plays a Vital Role in a Startup’s Growth

Company
Development Idea/Startup 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
8
Data provided by
Venture Investors year. Team, business model, product, a board seat at the company, and
market, valuation, fit, ability to add hiring employees. With a startup, daily
Partner with value, and industry are all important interaction with the management team
Entrepreneurs factors venture investors consider when is common. This active engagement
evaluating investments into startups. with a fledgling startup is critical to the
The US venture industry provides the
Venture capital investors are seeking company’s success and often limits the
capital to create some of the most
entrepreneurs who are addressing number of startups into which any single
innovative and successful companies.
global markets, have superb scalability, fund can invest. Many one- and two-
However, venture capital is more than
demonstrate success within a reasonable person companies have received funding,
money. A venture capital professional’s
timeframe, and truly innovative. but no one- or two-person company has
most precious asset is time. According to
ever gone public! Along the way, the
a 2016 study, How Do Venture Capitalists A venture capital investor’s competitive
company must recruit talent and scale
Make Decisions?,1 for every company advantage is the expertise and guidance
up. Any venture capital investor who has
in which a venture firm eventually they provide to the entrepreneurs in their
had a “home-run” investment will tell you
invests, the firm considers roughly 100 portfolio. Once the investment into a
that the companies capable of breaking
potential opportunities. The same study, company has been made, venture capital
through the gravity were able to evolve
which included results from a survey partners actively engage with a company,
the original business plan concept due to
of 889 venture capital professionals providing strategic and operational
careful input from an experienced hand.
at 681 firms, showed that the median guidance, connecting entrepreneurs
venture firm closes about four deals per with investors and customers, taking
The VC Fund Structure

Venture Capital Firm Limited Partners
(General Partners or GPs) (LPs, Investors)
Examples: public pension funds,
corporate pension funds, insurance
VC LP LP LP LP companies, high 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
1
Gompers, Paul A. and Gornall, Will and Kaplan, Steven N. and Strebulaev, Ilya A., How Do Venture Capitalists Make Decisions? (August 1, 2016). Stanford
University Graduate School of Business Research Paper No. 16-33; European Corporate Governance Institute (ECGI) - Finance Working Paper No. 477/2016.
Available at SSRN: https://ssrn.com/abstract=2801385
9
Data provided by
Common Structure— A new fund is established when the venture investors have high hopes for
venture capital firm obtains necessary any company getting funded, the 2016
Unique Results commitments from its investors, say study How Do Venture Capitalists Make
$80 million (i.e., the median size of a US Decisions? found that, on average,
While the legal and economic structures
venture fund closed in 2019). The money 15% of a venture firm’s portfolio exits
used to create a venture capital fund are
is taken from limited partners as the are through IPOs while about half are
similar to those used by other alternative
investments are made through what are through an M&A.
investment asset classes, venture capital
referred to as “capital calls.” Typically, an
itself is unique. Typically, a venture capital
firm will create a limited partnership with
initial funding of a company will cause Economic Alignment of
the investors as LPs and the firm itself
the venture fund to reserve three or four All Stakeholders—An
times that first investment for follow-on
as the general partner. Examples of LPs
financing. Over the next three to eight
American Success Story
include public pension funds, corporate
years, partners from the venture firm Venture capital is rare among asset
pension funds, insurance companies,
works with the founding entrepreneur classes in that success is truly shared. It
family offices, endowments, and
to grow the company. The potential is not driven by quick returns, financial
foundations. Each “fund,” or portfolio, is a
payoff comes only after the company engineering, debt, or transaction
separate partnership.
is acquired or goes public. Although fees. Economic success occurs when
How Venture Capital Works
Fundraising Investment Company Growth Exit Returns Re-investment

VCs raise capital for VCs typically invest in VCs provide active After about 5–10 years In addition to The fund ends when
funds from LPs. young, high-growth management and 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 board the VC exits its stake a profit on their proceeds have been
seats, providing via an acquisition or investment. distributed to LPs. LPs
strategic advice, IPO. IPOs have more High-quality jobs are can then reinvest
facilitating advantages: greater created, more earnings in a new crop
introductions. capital raised, higher capital is available for of funds.
returns, local job university research,
creation. retirees have more
for retirement,
foundations have
more resources to fund
their work.
10
Data provided by
the stock price increases above the backed companies have scaled, gone pipeline of talent, and fair and open
purchase price. When a company is public, and become household names, capital markets. It is dependent upon
successful and has a strong public stock and at the same time have generated investment in scientific research,
offering, or is acquired, the stock price high-skilled jobs and trillions of dollars of motivated entrepreneurs, protection of
of the company reflects its success. The benefit for the US economy. intellectual property, a skilled workforce,
entrepreneur benefits from appreciated and public policies that encourage
A 2015 study, The Economic Impact of
stock and stock options. The rank and file new company formation. The nascent
Venture Capital: Evidence from Public
employees throughout the organization deployment of venture capital in some
Companies, 3 analyzed the impact
historically also do well with their stock countries is gated by a country’s or
venture-backed companies, as a subset
options. The venture capital fund and region’s cultural fit, tolerance for failure,
of all US public companies founded
its LP investors split the capital gains services infrastructure that supports
between 1974 and 2015, have had on
per a pre-agreed formula. Many college developing companies, intellectual
the economy. The study found that of the
endowments, pension funds, charities, property protection, efficient capital
1,339 US companies that went public in
individuals, and corporations have markets, and the willingness of big
that period, 556 (or 42%) are venture-
benefited far beyond the risk-adjusted business to purchase from small
backed. These 556 companies represent
returns of the public markets. companies.
63% of the market capitalization and 85%
At the same time, the risk capital that of total research and development. Venture capital investing is now global.
fuels startups can bring benefits to While the US historically has been a
At the end of 2019, venture-backed
local economies in the form of company stronghold of global venture capital
companies accounted for the five
growth, competitiveness, and job activity, the rest of the world has been
largest publicly traded companies by
creation. In fact, recent studies have catching up. In the 1990s, US-based
market capitalization in the US: Apple
found that high-growth startups account startups attracted more than 90% of
($1.29 trillion), Microsoft ($1.20 trillion),
for as many as 50% of gross jobs created, annual global venture capital dollars
Alphabet ($920.3 billion), Amazon
and an average of 2.9 million net jobs invested. Today, US-based startups
($920.2 billion), and Facebook ($585
created annually between 1980 and account for about half of global venture
billion).4
2010.2 capital dollars invested. It’s important
Furthermore, recent research released to note that global investment has

The Impact of Venture- by Silicon Valley Bank found that 42% of grown over that time, i.e., the US decline
backed Companies FDA-approved US drugs between 2009 in global market share is on relative
terms, not by absolute dollars. However,
Beyond Financial and 2018 originated with venture capital
with global competition increasing for
funding.5
Returns innovation and talent, empowering
While venture investing has generated

What’s Ahead high-growth startups and ensuring the
US is the most attractive place to start
billions of dollars for investors and their Much of venture capital’s success has
a company are critical to the continued
institutions and created millions of jobs come from the vibrant entrepreneurial
success of our country’s entrepreneurial
over the years, the economic impact of spirit in the US, financial recognition
ecosystem.
venture-backed companies has been of success, access to good science, a
even more far-reaching. Many venture-
2
Kauffman Foundation, The Economic Impact of High-Growth Startups (January 7, 2016). https://www.kauffman.org/-/media/kauffman_org/resources/2016/
entrepreneurship-policy-digest/pd_highgrowth060716.pdf and Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda. 2014. “The Role of
Entrepreneurship in US Job Creation and Economic Dynamism.” Journal of Economic Perspectives, 28 (3): 3-24. https://www.aeaweb.org/articles?id=10.1257/
jep.28.3.3
3
Gornall, Will and Strebulaev, Ilya A., The Economic Impact of Venture Capital: Evidence from Public Companies (November 1, 2015). Stanford University
Graduate School of Business Research Paper No. 15-55. Available at SSRN: https://ssrn.com/abstract=2681841 or http://dx.doi.org/10.2139/ssrn.2681841
4
Source: YCharts data as of December 31, 2019.
5
Silicon Valley Bank, “Trends in Healthcare Investments and Exits 2019” (Mid-year report 2019) https://www.svb.com/globalassets/library/managedassets/pdfs/
healthcare-report-2019-midyear.pdf
11
Data provided by
At-A-Glance: The US
Venture Industry
2019 bookended a decade of growth VC AUM Summary Statistics
in the number of venture investors and 2007 2013 2019
venture funds and the amount of assets
# of VC Firms in Existence 946 917 1,328
managed by the venture industry. At the
end of 2019, 1,328 venture firms were # of VC Funds in Existence 1,586 1,422 2,211
in existence (i.e., those who have raised # of First-time VC Funds Raised 31 23 35

a fund in the last eight years). These
# of VC Funds Raising Money This Year 187 215 272
1,328 firms managed 2,211 venture
VC Capital Raised This Year ($B) $35.1 $20.4 $50.5
funds and had approximately $444
billion in US venture capital assets under VC AUM ($B) $221.6 $257.6 $444.3
management (AUM) and $121 billion in Avg VC AUM Per Firm ($M) $221.6 $255.1 $337.9
dry powder at the end of 2019.
Avg VC Fund Size to Date ($M) $128.1 $131.0 $138.4
Elevated fundraising levels the past Avg VC Fund Size Raised This Year ($M) $213.0 $102.4 $189.3
two years yielded a 5% year-over-year
Median VC AUM Per Firm ($M) $66.5 $70.2 $77.7
increase in VC AUM from 2018 to 2019.
Median VC Fund Size to Date ($M) $55.0 $52.0 $50.0
The industry’s latest AUM and dry
powder figures are both record highs and Median VC Fund Size Raised This Year ($M) $133.0 $37.5 $80.0
cap a decade where venture funds closed Largest VC Fund Raised to Date ($M) $3,000.0 $1,100.0 $3,200.0
an aggregate of about $350 billion. From
Source: NVCA 2020 Yearbook, Data Provided by PitchBook
where the decade started with about Note: The number of firms in existence is based on a rolling count of firms that raised a fund in the last eight vintage
$230 billion in VC AUM at the end of years. The number of VC funds in existence is based on a rolling count of funds that have closed in the last eight
vintage years. AUM is calculated by adding together a firm’s total remaining value and their total dry powder.
2009, 2019’s VC AUM nearly doubled and
had an annual growth rate* of 7%.
US Venture Capital AUM by Year
VC assets remain geographically $500
concentrated in three states—the $450
dominant hubs for venture activity— $400
California, Massachusetts, and New York. $350
These three states together made up 84%
$300
of total US VC AUM in 2019, on par with
$250
2018. California, Massachusetts, and
$200
New York saw slight year-over-year AUM
increases of 7%, 1%, and 1%, respectively. $150
$100
$170.6
$198.5
$221.6
$227.7
$229.1
$237.0
$253.2
$248.5
$257.6
$285.5
$315.6
$334.4
$347.1
$425.1
$444.3
$50
$0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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Data provided by
Iowa, Ohio, the District of Columbia, The median venture firm size was $78 1,012.
and Minnesota were among the states million in 2019. While VC AUM has
The US share of global fundraising has
with the highest year-over-year VC grown and mega-funds have become
remained steady, accounting for 67% of
AUM increases. At the end of 2019, 28 more prevalent, most firms (755 firms or
total funds raised. US companies gained
states had more than $100 million in 56% of firms) managed less than $100
ground on global investment, accounting
AUM. States that saw the largest annual million at the end of 2019, and 92 firms
for 52% of VC dollars in 2019. However,
growth rate* in VC AUM over the decade managed $1 billion+.
this is a marked difference from the
were Montana, Arizona, North Dakota,
In 2019, 7,958 active investors (all types 84% share of global investment the US
Delaware, and Nebraska. However, it’s
and headquartered globally) made one accounted for in 2004 and has rapidly
important to note that VC assets by a
or more investment in US companies, a declined. Exit activity yielded the biggest
firm’s headquarter state oftentimes is
steady decline after peaking in 2015. change in the US global market share
not the most telling since firms frequently
Active US-based VC investors also after a record year of exits—78% of
invest in companies outside their state,
continued to dip (2,279 in 2019) after global venture-backed exit value in 2019
as noted on the charts on page 28.
peaking in 2017, while US VC investors came from US companies.
making first round investments fell to
*Calculated as compound annual growth rate.
Fund and Firm Analysis

Total Total Total Firms That Raised Average Average Median Median
Existing AUM
Cumulative Cumulative Cumulative Funds in the Last 8 Fund Size Commitments Fund Size Commitments
Funds ($B)
Funds Firms Capital ($B) Vintage Years ($M) + NAV ($M) ($M) + NAV ($M)
2005 2,520 1,066 $281.7 1,655 931 $170.6 $148.1 $180.8 $60.0 $60.4
2006 2,715 1,127 $313.0 1,672 960 $198.5 $188.4 $202.4 $92.0 $60.0
2007 2,902 1,180 $348.1 1,586 946 $221.6 $213.0 $221.6 $133.0 $66.5
2008 3,096 1,238 $380.2 1,388 843 $227.7 $182.3 $225.4 $84.5 $65.1
2009 3,218 1,279 $393.3 1,264 788 $229.1 $121.2 $223.6 $50.0 $68.5
2010 3,368 1,344 $412.3 1,281 805 $237.0 $138.6 $242.3 $50.0 $75.7
2011 3,522 1,406 $435.6 1,330 830 $253.2 $163.4 $262.6 $45.6 $79.7
2012 3,727 1,496 $460.3 1,378 872 $248.5 $130.6 $250.6 $26.3 $66.6
2013 3,942 1,591 $480.7 1,422 917 $257.6 $102.4 $255.1 $37.5 $70.2
2014 4,235 1,727 $515.6 1,520 981 $285.5 $129.7 $261.3 $30.0 $60.5
2015 4,549 1,853 $552.9 1,647 1,041 $315.6 $126.7 $258.8 $33.5 $55.2
2016 4,877 1,987 $595.6 1,781 1,094 $334.4 $142.1 $265.9 $50.0 $53.9
2017 5,157 2,132 $631.6 1,939 1,200 $347.1 $137.9 $272.3 $47.5 $59.4
2018 5,461 2,271 $689.7 2,093 1,284 $425.1 $203.3 $334.0 $74.9 $71.7
2019 5,733 2,371 $740.2 2,211 1,328 $444.3 $189.3 $337.9 $80.0 $77.7

*Defined as Commitments + Net Asset Value
13
Data provided by
Number of Active Investors (#)

# of # of # of # of # of
# of # of # of # of
# of Active # of Active # of Active Active US Active US
Active 1st Active VC Active US Active
Active Life Active VC VC Life Active US US Life VC 1st VC Life
Round 1st Round 1st Round US VC
Investors Science Investors Science Investors Science Round Science
Investors Investors Investors Investors
Investors Investors Investors Investors Investors
2005 2,536 1,020 818 1,284 564 473 1,851 814 572 1,034 491 367
2006 2,785 1,262 840 1,375 693 497 2,031 970 635 1,082 561 399
2007 3,358 1,478 977 1,563 743 548 2,415 1,134 725 1,244 629 445
2008 3,573 1,478 976 1,631 725 552 2,562 1,136 758 1,287 598 444
2009 3,063 1,281 870 1,433 582 499 2,208 986 667 1,114 500 404
2010 3,552 1,648 830 1,576 700 484 2,558 1,256 649 1,242 589 408
2011 4,592 2,352 879 1,809 894 504 3,092 1,652 714 1,406 741 429
2012 5,734 2,934 1,010 2,060 1,022 535 3,594 1,959 782 1,592 839 445
2013 7,306 3,432 1,126 2,330 1,072 586 4,046 1,990 848 1,740 859 482
2014 9,429 3,848 1,359 2,703 1,196 622 4,646 2,115 935 2,001 973 494
2015 10,278 3,789 1,610 2,957 1,252 726 4,805 1,995 1,063 2,146 1,002 579
2016 8,676 2,864 1,264 3,128 1,261 672 4,475 1,659 888 2,224 1,019 531
2017 8,512 2,829 1,558 3,369 1,444 849 4,436 1,689 1,048 2,377 1,155 640
2018 8,608 2,814 1,737 3,600 1,508 942 4,421 1,672 1,129 2,388 1,129 687
2019 7,958 2,477 1,497 3,453 1,319 833 4,213 1,500 987 2,279 1,012 604
*VC investors include entities with primary investor type as: Venture Capital, Corporate Venture Capital, or Not-for- Source: NVCA 2020 Yearbook, Data Provided by PitchBook
profit Venture Capital
*VC investors are headquartered globally, but only counted if they invested in a US company

US as a % of Global VC Deal Flow by Year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Global Deal Value ($B) $47.6 $49.8 $37.0 $47.2 $66.0 $62.0 $71.4 $114.8 $158.1 $161.8 $183.9 $308.5 $257.3
US Deal Value ($B) $37.9 $36.9 $27.5 $31.6 $44.8 $41.3 $47.7 $72.3 $83.5 $78.1 $87.1 $141.8 $133.4
Global Deal Value (#) 6,499 7,218 6,988 8,943 11,381 13,604 16,785 20,212 22,481 21,286 21,952 23,726 23,268
US Deal Value (#) 4,338 4,772 4,546 5,463 6,822 7,958 9,413 10,720 11,073 9,694 10,392 10,648 11,359
US as % of Global ($) 79.6% 74.0% 74.2% 66.9% 67.9% 66.6% 66.8% 62.9% 52.8% 48.3% 47.4% 46.0% 51.9%
US as % of Global (#) 66.7% 66.1% 65.1% 61.1% 59.9% 58.5% 56.1% 53.0% 49.3% 45.5% 47.3% 44.9% 48.8%
14
Data provided by
Active Investor Count in 2019 Deals by HQ State
118 7 1
24
5
- 19
28
1 2- 3
1 32 525
265
7
5 19
63
91 28 30 3
10 26 36
106 28
4 21 1
1,473 9 40 43
18
6 22 51
25 11 1
7
- 3 33
126
5
0
53
4
US as a % of Global VC Exits by Year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Global Exit Value ($B) $84.0 $25.3 $35.2 $66.1 $95.0 $133.2 $101.0 $203.0 $122.5 $113.2 $157.2 $394.5 $332.7
US Exit Value ($B) $57.1 $17.4 $21.5 $41.4 $66.7 $124.4 $72.3 $111.6 $75.6 $73.3 $97.8 $130.3 $260.6
Global Exit Value (#) 1,075 837 793 1,196 1,260 1,428 1,549 1,959 2,007 1,825 1,849 1,837 1,719
US Exit Value (#) 627 493 480 707 739 868 906 1,081 1,030 908 929 1,022 918
US as % of Global ($) 68.0% 68.8% 61.3% 62.7% 70.2% 93.4% 71.6% 55.0% 61.7% 64.7% 62.2% 33.0% 78.3%
US as % of Global (#) 58.3% 58.9% 60.5% 59.1% 58.7% 60.8% 58.5% 55.2% 51.3% 49.8% 50.2% 55.6% 53.4%
15
Data provided by
Active Investor Count in 2019 Deals by Investor HQ State
56 2 1
19
3
2 23
12
2 1- 5
2 34 359
151
8
5 20
40
99 24 27 3
7 17 25
55 5
9 19 2
909 7 37 35
14
1 17 24
11 6 1
7
- 1 30
79
3
0
48
0
Note: This map breaks out the 2,113 active VC investors by their HQ state. Note that active VC investors headquartered outside of the US are not included in this map.
US as a % of Global VC Fundraising by Year

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Global Capital Raised

$53.6 $52.4 $24.3 $35.3 $45.8 $39.5 $40.4 $52.2 $74.6 $72.8 $59.0 $87.0 $75.1
($B)
US Capital Raised ($B) $35.1 $32.1 $13.1 $19.0 $23.4 $24.7 $20.4 $34.9 $37.4 $42.6 $36.0 $58.1 $50.5
Global Capital Raised

413 447 341 398 434 432 394 490 522 534 466 460 432
(#)
US Capital Raised (#) 187 194 122 150 154 205 215 293 314 328 280 304 272
US as % of Global ($) 65.6% 61.2% 53.8% 53.9% 51.1% 62.5% 50.4% 66.8% 50.1% 58.6% 61.0% 66.8% 67.3%
US as % of Global (#) 45.3% 43.4% 35.8% 37.7% 35.5% 47.5% 54.6% 59.8% 60.2% 61.4% 60.1% 66.1% 63.0%
16
Data provided by
AUM by State in 2019
$7.3B $71.6M $99.1M $68.8M

$50.0M
$1.1B
$31.9M $1.3B $208.7M
$244.1M -
$46.2M
- $2.3B $57.1B
$60.2B
$92.1M
$88.4M
$172.3M $3.2B $1.3M
$9.7B $3.1B $5.6B
$84.0M $2.7B $3.3B
$3.6B $71.6M
$45.9M $1.6B -
$52.7M $2.9B $760.8M
$257.7B
$7.4B
- $1.3B $1.4M
$704.4M $11.3M $17.7M
$34.95M
- $46.2M $0.2B
$4.8B
$222.3M
-
$1.9B
$0.9M
Top 5 States by AUM in Distribution of Firms by AUM in 2019

2019 ($B) 350
AUM 294
300
California $257.7 250 236
200 177 176

Massachusetts $60.2 166
150
121
New York $57.1
92
100 75
Illinois $9.7
50
District of Columbia $7.4
0
$0M- $10M- $25M- $50M- $100M- $250M- $500M- $1B+
Total $444.3 $10M $25M $50M $100M $250M $500M $1B
Source: NVCA 2020 Yearbook, Data Provided by PitchBook Source: NVCA 2020 Yearbook, Data Provided by PitchBook
17
Data provided by
AUM by Year by State ($M)

2005 2006 2007 2008 2009 2010 2011 2012
Alabama $166.9 $184.0 $175.2 $176.8 $169.4 $171.4 $160.6 $143.8
Arizona $90.2 $90.9 $81.5 $71.7 $65.7 $51.8 $93.5 $129.2
Arkansas - - - - - - - -
California $80,896.3 $95,485.7 $103,514.5 $109,986.4 $112,552.2 $117,765.0 $126,467.8 $125,427.6
Colorado $1,255.2 $1,171.6 $1,733.9 $1,656.6 $1,559.0 $1,950.7 $1,894.5 $1,742.6
Connecticut $7,054.0 $9,647.5 $10,111.2 $9,049.0 $9,137.4 $9,431.1 $9,064.3 $9,058.6
Delaware $6.6 $25.2 $18.0 $12.7 $11.5 $11.7 $11.7 $15.7
District of Columbia $1,459.7 $1,593.8 $2,483.7 $2,488.8 $2,297.0 $2,112.4 $2,616.6 $2,449.7
Florida $1,664.3 $1,638.4 $1,865.2 $1,935.4 $1,844.6 $1,807.2 $1,767.7 $2,162.6
Georgia $1,387.5 $1,510.3 $1,779.8 $1,627.8 $1,625.2 $1,785.8 $1,779.0 $1,610.7
Hawaii $11.5 $11.7 $11.6 $11.3 $11.3 $11.8 $12.0 $8.5
Idaho $22.0 $21.6 $93.9 $81.7 $78.9 $94.8 $96.2 $92.1
Illinois $3,080.6 $3,745.2 $4,195.0 $4,391.5 $4,229.4 $4,598.7 $5,442.3 $5,247.3
Indiana $321.3 $309.2 $289.4 $244.3 $226.2 $221.8 $205.6 $189.2
Iowa $28.7 $28.2 $26.3 $22.3 $18.8 $16.8 $14.9 $16.8
Kansas $3.3 $6.1 $2.5 - - - $2.7 $2.5
Kentucky $147.4 $352.7 $341.8 $320.4 $294.0 $279.8 $300.6 $276.2
Louisiana $542.5 $631.0 $627.4 $649.7 $691.2 $750.4 $693.1 $627.6
Maine $258.1 $251.3 $301.2 $271.6 $264.2 $284.6 $311.6 $263.0
Maryland $1,868.3 $2,169.3 $2,472.4 $2,134.8 $1,986.0 $1,777.3 $1,568.8 $1,506.3
Massachusetts $29,843.8 $32,960.6 $38,323.2 $37,048.7 $37,114.7 $38,704.1 $41,193.2 $39,174.4
Michigan $370.0 $365.3 $420.5 $1,310.2 $1,456.8 $1,468.6 $1,669.7 $1,568.2
Minnesota $1,180.6 $1,572.3 $2,061.0 $2,112.0 $1,913.8 $1,806.2 $1,685.5 $1,814.4
Missouri $1,252.8 $1,265.9 $1,508.1 $1,365.9 $1,293.5 $1,254.1 $1,297.1 $1,092.7
Montana - $1.7 $1.7 $1.7 $1.5 $1.6 $1.6 $1.5
Nebraska $25.7 $22.7 $21.2 $16.2 $14.6 $16.1 $51.8 $40.1
Nevada $48.8 $44.4 $43.7 $33.3 $30.6 $26.6 $21.3 $60.4
New Hampshire $14.2 $63.4 $63.0 $60.2 $53.1 $51.7 $51.8 $48.1
New Jersey $3,792.0 $5,216.9 $5,886.7 $5,183.6 $5,368.3 $5,135.1 $5,068.2 $4,900.1
New Mexico $98.1 $123.0 $105.7 $99.1 $99.1 $93.0 $66.7 $46.8
New York $15,570.5 $18,069.5 $20,809.3 $19,553.9 $19,266.3 $20,392.3 $24,265.0 $24,963.9
North Carolina $1,094.0 $1,434.2 $1,410.9 $1,379.6 $1,284.0 $1,213.7 $1,020.3 $1,069.6
North Dakota - - - $10.6 $10.4 $10.5 $10.7 $10.5
Ohio $1,040.2 $1,143.8 $1,217.8 $1,217.2 $1,184.0 $1,235.6 $1,267.4 $1,414.5
Oklahoma $45.2 $70.0 $68.4 $51.4 $47.7 $41.8 $27.1 $13.9
Oregon $95.6 $88.1 $82.0 $66.6 $61.9 $72.8 $68.6 $68.9
Pennsylvania $2,911.5 $3,227.6 $3,483.4 $3,645.1 $3,914.1 $4,059.1 $3,970.2 $3,668.4
Rhode Island - - - - - - - -
South Carolina - - - - - - - -
South Dakota $10.3 $9.9 $9.1 $40.5 $39.2 $54.8 $54.6 $54.4
Tennessee $629.1 $662.6 $688.9 $645.4 $611.0 $615.2 $552.0 $625.4
Texas $5,881.4 $5,968.5 $5,800.0 $6,021.9 $5,670.7 $5,596.5 $6,347.3 $5,493.9
Utah $400.1 $529.1 $850.4 $928.5 $1,045.9 $1,025.7 $1,237.7 $1,217.2
Vermont $12.8 $12.5 $11.7 $23.5 $21.5 $25.7 $25.0 $24.5
Virginia $2,175.5 $2,566.8 $2,722.3 $3,374.3 $3,346.4 $3,251.9 $3,328.2 $3,216.0
Washington $3,713.8 $3,954.0 $5,661.4 $8,104.7 $7,921.0 $7,255.7 $6,908.9 $6,353.5
Wisconsin $84.0 $246.4 $244.0 $280.0 $255.3 $442.8 $475.3 $572.5
Wyoming $16.3 $14.4 $13.4 $10.3 $9.3 $8.6 $7.1 $5.8

18
Data provided by
2013 2014 2015 2016 2017 2018 2019
Alabama $128.6 $123.1 $117.9 $88.8 $52.0 $57.5 $46.2
Arizona $248.2 $422.1 $448.9 $481.4 $541.8 $794.4 $704.4
Arkansas - $10.1 $9.7 $11.3 $14.0 $21.7 $17.7
California $128,696.7 $150,508.8 $168,486.9 $185,559.0 $194,904.6 $241,916.3 $257,693.1
Colorado $2,097.8 $2,122.3 $3,130.4 $2,837.0 $2,765.8 $3,514.0 $3,645.2
Connecticut $8,538.0 $8,327.6 $6,401.8 $5,516.4 $5,007.4 $4,931.5 $5,619.5
Delaware $16.4 $42.6 $44.6 $57.2 $66.2 $86.3 $71.6
District of Columbia $2,689.7 $2,494.2 $2,457.5 $2,956.1 $5,106.0 $5,545.2 $7,431.7
Florida $2,081.8 $2,302.4 $2,358.3 $2,623.8 $2,675.6 $2,728.1 $1,902.7
Georgia $1,583.4 $1,497.5 $1,608.5 $1,435.0 $1,436.9 $1,586.1 $1,506.0
Hawaii $9.8 $8.0 $7.2 $5.8 $1.3 $0.9 $0.9
Idaho $103.2 $85.8 $73.7 $83.8 $119.4 $47.7 $46.2
Illinois $5,284.2 $6,095.4 $6,340.1 $6,505.9 $7,097.4 $9,136.8 $9,739.4
Indiana $179.6 $117.4 $110.8 $78.9 $40.8 $181.9 $172.3
Iowa $18.7 $5.0 $5.8 $5.5 $6.6 $7.4 $92.1
Kansas $2.7 $3.0 $3.3 $3.7 $3.3 $49.2 $45.9
Kentucky $277.5 $224.2 $238.5 $188.8 $156.6 $150.8 $52.7
Louisiana $655.2 $673.8 $629.8 $519.5 $324.5 $252.7 $222.3
Maine $301.4 $224.6 $336.0 $296.9 $206.4 $233.2 $208.7
Maryland $1,545.0 $1,428.0 $1,307.6 $1,032.4 $769.1 $906.2 $760.8
Massachusetts $42,043.6 $41,765.7 $46,173.1 $48,804.3 $48,792.8 $59,604.0 $60,230.0
Michigan $1,751.5 $1,774.3 $1,856.7 $2,016.6 $1,983.7 $2,072.9 $2,255.9
Minnesota $1,779.7 $1,889.8 $1,524.9 $1,123.4 $1,061.7 $866.7 $1,134.8
Missouri $1,285.8 $981.4 $1,041.3 $1,118.3 $1,296.6 $1,689.7 $1,574.9
Montana $1.5 $4.3 $4.1 $26.0 $28.3 $72.3 $71.6
Nebraska $41.8 $45.8 $50.3 $87.1 $82.8 $88.0 $88.4
Nevada $50.1 $53.2 $62.2 $55.2 $78.8 $85.6 $84.0
New Hampshire $50.2 $48.7 $50.0 $40.8 $40.4 $95.2 $68.8
New Jersey $4,926.4 $4,722.4 $4,828.8 $4,367.7 $3,671.0 $3,565.6 $3,335.7
New Mexico $48.2 $42.1 $42.3 $34.5 $32.5 $14.9 $11.3
New York $26,977.5 $33,234.8 $40,197.8 $40,967.0 $43,745.7 $56,343.3 $57,073.2
North Carolina $1,141.2 $1,070.9 $1,083.0 $1,206.5 $1,333.2 $1,295.2 $1,375.1
North Dakota $54.3 $62.4 $66.9 $67.6 $67.0 $77.3 $99.1
Ohio $1,651.4 $1,696.8 $1,782.0 $2,048.5 $2,064.5 $2,233.6 $3,097.3
Oklahoma $13.3 $12.8 $12.4 $9.6 $8.7 $6.3 -
Oregon $97.8 $119.7 $131.5 $151.4 $168.2 $249.1 $244.1
Pennsylvania $3,602.6 $3,989.9 $4,196.1 $3,630.2 $3,281.9 $3,518.5 $3,233.7
Rhode Island - - - - - $1.4 $1.3
South Carolina $5.9 $12.4 $13.0 $13.4 $20.6 $27.7 $34.9
South Dakota $54.8 $67.0 $59.3 $55.1 $43.7 $32.0 $31.9
Tennessee $764.9 $808.9 $885.2 $1,177.9 $1,313.0 $1,274.9 $1,303.5
Texas $5,409.8 $4,680.3 $4,461.8 $4,378.2 $3,953.9 $5,024.4 $4,802.1
Utah $1,452.5 $1,705.4 $2,165.5 $2,335.3 $2,398.2 $2,773.4 $2,732.6
Vermont $24.7 $35.5 $31.4 $44.4 $45.0 $52.8 $50.0
Virginia $2,848.9 $3,509.4 $3,419.1 $2,840.6 $2,796.5 $3,281.5 $2,874.4
Washington $6,521.3 $5,616.2 $6,455.4 $6,629.7 $6,512.5 $7,376.6 $7,238.5
Wisconsin $591.8 $875.0 $840.3 $856.6 $942.6 $1,240.6 $1,300.4
Wyoming - - - - - - -
19
Data provided by
Capital Commitments:
Venture Fundraising
In 2019, 272 US venture capital funds
US VC Fundraising by Year
closed on $50.5 billion in capital
314 328
commitments, representing an 11% and 304
293
13% year-over-year decline, respectively, 280 272
compared with 2018. However, last year
marked the sixth consecutive year of $30 215
205
195 187 194
billion+ in fundraising. 171
150 154
Venture fund sizes remained elevated 122
with a median and average size of $80
million and $189 million, respectively.
Large funds drove this trend—8 funds
$23.4
$31.3
$35.1
$32.1
$13.1
$19.0
$23.4
$24.7
$20.4
$34.9
$37.4
$42.6
$36.0
$58.1
$50.5
closed on $1 billion+ in 2019 and
accounted for 28% of total capital raised, 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
led by TCV’s $3.2 billion tenth fund Capital Raised ($B) Fund Count
closed in 2019. This was lower than 10 Source: NVCA 2020 Yearbook, Data Provided by PitchBook
funds of that size closing in 2018 and

accounting for 38% of capital that year,
thanks largely to the record $8 billion
US VC First-time Fundraising by Year
fund closed by Sequoia Capital. 55
50
47
First-time funds have also been an
42 43
important trend of the decade. These
funds are typically created from 35
33
31 31 31 31
individuals who have spun out of 28
26
established firms, those who were 23
20
previously angel investors, or those who
were previously in operating roles at
companies. First-time funds dipped after
$3.3
$3.0
$2.9
$2.3
$1.1
$0.9
$2.0
$1.7
$1.5
$2.4
$2.2
$2.6
$2.8
$5.4
$4.0
the 2008 global financial crisis but have

seen healthy growth since then. 2018
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
set a record for the number of first-time Capital Raised ($B) Fund Count
funds closed and total capital raised, but
activity dipped in 2019. Last year, 35
first-time funds raised $4.0 billion. 344
first-time funds raised more than $25
billion from 2010 to 2019. The prevalence
20
Data provided by
of first-time funds, many of which are The overall US median VC fund size in Second, comparing fundraising to
smaller in size, has made an impact 2019 was $80 million, the highest since investment figures in this report is
on the number of players and capital 2008 and a 7% increase from 2018. not apples-to-apples. Why? 1) Firms
availability at the seed and earlier stages Outside of California, Massachusetts, generally do not deploy all of their
of the venture investment cycle. and New York, median VC fund size capital into startups in one year or in
reached $43 million in 2019, an the year they close their fund. 2) The VC
VC funds based in 26 states and the
increase of 57% compared to 2018, but fundraising statistics only capture US
District of Columbia held final closes on
still relatively small compared to the funds, whereas VC funds outside the
venture funds in 2019, with Connecticut,
dominant venture hubs – the median for US frequently invest in US startups. The
Ohio, Illinois, the District of Columbia,
California, Massachusetts, and New York, VC investment statistics are inclusive
Georgia, and Michigan seeing the biggest
collectively, was $100 million. of investors headquartered outside the
year-over-year absolute gains.
US; and 3) There are increasingly more
Two important notes on the VC
Funds based in California, New York, and types of investors becoming active in
fundraising data: first, as mentioned in
Massachusetts accounted for 62%, 15%, the venture ecosystem. Most of these
the prior section, a fund’s location doesn’t
and 9%, respectively, of total capital investors do not invest in companies via
mean the capital will only be deployed in
raised in the US in 2019. Collectively, venture funds, e.g., corporate venture
that geography. Local capital is important
these three states represented 86% of groups, hedge funds, mutual funds,
to support the local ecosystem, but
total US capital raised, on par with 2018, sovereign wealth funds, and family
capital travels. Investors frequently invest
but a noticeable jump from the 79% share offices.
in companies outside of their state.
in 2010. The ten largest funds closed in
2019 were based in California.
10 Largest US VC Funds in 2019 Top States by VC Raised

in 2019
Investor Name Fund Name Fund Size ($M) Close Date Fund State
# of Capital Raised
Funds ($M)
TCV TCV X $3,200.0 January 31, 2019 California
California 123 $31,513.4

Andreessen Andreessen Horowitz
$2,238.9 July 17, 2019 California
Horowitz LSV Fund I Massachusetts 28 $7,515.5
Norwest Venture Norwest Venture November 14,

$2,000.0 California New York 40 $4,583.5
Partners Partners XV 2019
November 20, Connecticut 2 $910.0

Founders Fund The Founders Fund VII $1,496.4 California
2019
Ohio 7 $894.1
Vivo Capital Vivo Capital Fund IX $1,430.0 October 30, 2019 California Illinois 10 $721.1
Washington 10 $689.1
Sapphire Ventures December 18,
Sapphire Ventures $1,400.0 California
Fund IV 2019 Texas 9 $546.3
Lightspeed Lightspeed Venture Pennsylvania 4 $417.0

$1,361.8 June 21, 2019 California
Venture Partners Partners Select III
District of
2 $365.0
Bond Capital (San Columbia
Bond Capital Fund $1,250.0 May 1, 2019 California
Francisco)
Sequoia Capital US
Sequoia Capital $998.5 December 6, 2019 California
Growth Fund VIII
Andreessen Andreessen Horowitz

$840.0 July 17, 2019 California
Horowitz Fund VI
21
Data provided by
VC Fundraising by State by Year ($M)

2005 2006 2007 2008 2009 2010 2011 2012
Alabama $23.0 $21.9 - $25.7 - - - $5.0
Arizona - - - $20.0 - - $38.2 $56.6
Arkansas - - - - - - - -
California $12,124.0 $15,409.7 $15,134.9 $17,085.0 $6,441.9 $9,657.4 $13,899.1 $14,782.1
Colorado $25.0 $22.3 $420.8 $111.9 $5.0 $328.0 - $88.7
Connecticut $795.0 $3,050.0 $45.0 $650.0 $25.0 $1,259.3 $15.0 $617.5
Delaware - $13.0 - - - $15.0 - $4.9
District of Columbia - $200.0 $828.0 $340.0 - - $450.0 $20.5
Florida $718.0 - $348.5 $164.1 $145.6 $94.0 $97.6 $268.0
Georgia $3.5 $215.0 $255.1 $138.0 $155.0 $293.2 - $50.0
Hawaii - - - $1.8 - - - -
Idaho - - $75.0 - - - - -
Illinois $165.5 $370.5 $818.2 $877.9 $225.0 $512.7 $738.0 $275.3
Indiana $6.0 $26.3 - - $10.0 $90.0 - $19.0
Iowa - - - - - - - $3.0
Kansas - - - - - - $2.6 -
Kentucky $20.1 $36.4 - $175.0 - - - $10.7
Louisiana $73.5 $70.0 $28.0 $106.7 $70.0 $56.0 - $6.0
Maine - - $65.0 - - - - $10.1
Maryland $25.0 $327.0 $575.0 $63.3 $21.0 - - $20.0
Massachusetts $4,263.8 $4,862.8 $6,550.1 $3,332.9 $2,879.8 $2,942.5 $4,054.8 $1,854.2
Michigan - $20.0 $65.0 $910.0 $254.3 $41.4 $185.7 $45.2
Minnesota $275.0 $398.0 $331.0 $475.1 $30.0 - - $150.0
Missouri $66.0 - $210.2 $128.9 $65.0 $2.0 - $20.0
Montana - $1.8 - - - - - -
Nebraska - - - - - $2.6 $37.3 $18.2
Nevada - - - - - - - $50.0
New Hampshire - $50.0 - - - - - $4.5
New Jersey $798.0 $1,063.0 $895.2 $9.0 $516.0 - $500.0 $349.0
New Mexico $47.5 $5.2 - - - - $10.0 -
New York $1,839.4 $1,995.4 $5,147.2 $1,674.6 $759.6 $2,467.0 $2,484.9 $4,670.6
North Carolina $232.0 $340.0 $40.3 $83.0 $102.0 - - $2.5
North Dakota - - - $11.0 - - - -
Ohio $18.9 $100.0 $15.5 $254.7 $23.7 $88.2 $86.1 $63.9
Oklahoma - $15.0 - - - - - -
Oregon - - $0.9 $2.6 $3.0 $20.4 $3.4 $7.8
Pennsylvania $228.8 $397.2 $192.5 $739.6 $940.5 $129.9 $100.0 $298.0
Rhode Island - - - - - - - -
South Carolina - - - - - - - -
South Dakota $10.0 - - $32.5 - $16.0 - -
Tennessee $83.3 $54.0 $40.0 $93.2 $14.0 $74.2 $22.0 $190.0
Texas $268.2 $892.1 $103.3 $1,221.8 $5.1 $175.5 $465.1 $31.2
Utah - $129.2 $352.0 $166.6 $122.0 $66.4 $33.0 $156.9
Vermont - - - $14.0 - $5.0 - -
Virginia $564.1 $478.0 $309.8 $223.1 $274.6 $441.0 $110.0 $80.2
Washington $722.2 $538.0 $2,293.5 $2,902.9 $2.5 $5.9 - $328.2
Wisconsin $10.7 $171.5 - $57.8 - $201.5 $40.0 $116.4

*For this table we give precedent to the fund location, but if unvailable,
22 we use the HQ location of the firm
Data provided by
2013 2014 2015 2016 2017 2018 2019
Alabama - - - - - $25.0 -
Arizona $129.5 $156.9 $6.2 $28.6 - - $49.4
Arkansas - $10.0 - $1.5 - - -
California $9,198.7 $21,240.6 $21,272.5 $25,852.0 $22,475.3 $33,407.0 $31,513.4
Colorado $230.5 $193.8 $640.8 $560.7 $32.0 $807.6 $166.6
Connecticut $193.1 $500.0 $1.0 $151.7 $600.0 $395.4 $910.0
Delaware - $26.0 $2.4 - - - -
District of Columbia $200.0 $8.0 $60.5 $887.8 $2,398.0 $67.7 $365.0
Florida - $327.7 $184.0 $56.4 $45.5 $47.4 $35.0
Georgia $114.7 $40.3 $262.0 $53.0 $111.0 - $327.0
Hawaii - - - - - - -
Idaho - - - - - - -
Illinois $268.5 $500.6 $574.0 $1,584.2 $658.1 $535.9 $721.1
Indiana - $1.7 - - - $132.7 -
Iowa $1.8 - - - - - $80.7
Kansas - - - $0.2 - $42.7 -
Kentucky - - $5.6 - - $29.5 -
Louisiana $14.2 $10.4 $11.1 - - - -
Maine - - $123.0 - $11.0 - -
Maryland $213.0 $82.2 $152.7 $0.8 $78.0 $69.9 -
Massachusetts $5,169.0 $2,453.3 $5,441.3 $6,253.1 $5,698.3 $7,528.1 $7,515.5
Michigan $73.0 $26.3 $316.3 $407.5 $50.5 $26.7 $280.0
Minnesota $107.4 - $105.5 - $36.2 $153.2 $279.2
Missouri $320.0 $1.5 $116.7 $400.1 $108.1 $184.4 $23.5
Montana - - - $21.1 $2.8 $38.0 -
Nebraska - - $0.6 - $31.0 - -
Nevada - - - - $5.0 - -
New Hampshire - $1.0 $7.7 - $1.7 $56.1 -
New Jersey $13.0 $18.6 - $662.0 $10.0 $390.0 $277.0
New Mexico - - - - - - -
New York $1,682.7 $7,271.3 $6,054.3 $3,087.3 $2,188.4 $9,265.7 $4,583.5
North Carolina $215.0 $35.6 $32.1 $205.2 $273.0 $112.6 $31.3
North Dakota $45.0 $3.5 - - - - $30.0
Ohio $104.7 $539.6 $126.7 $428.2 $32.7 $49.3 $894.1
Oklahoma - - - - - - -
Oregon $15.8 $32.7 $17.5 $31.5 $16.2 $58.0 $14.0
Pennsylvania $171.6 $291.7 $235.0 $59.0 $111.7 $359.7 $417.0
Rhode Island - - - - - $1.3 -
South Carolina $6.0 $6.2 - - $5.7 - $10.2
South Dakota - - - - - - -
Tennessee $103.0 $2.5 - $435.0 $125.4 $8.0 $86.0
Texas $653.9 $444.0 $166.9 $224.6 $105.9 $917.8 $546.3
Utah $345.9 $150.7 $245.2 $400.6 $86.2 $187.1 $220.0
Vermont - $12.0 - - $14.0 - -
Virginia $228.1 $88.8 $531.6 $180.0 $156.1 $387.6 $240.0
Washington $551.2 $190.8 $690.3 $616.9 $420.8 $2,734.6 $689.1
Wisconsin $5.1 $217.7 $0.6 $29.7 $93.9 $130.5 $227.0

*For this table we give precedent to the fund location, but if unvailable,
we use the HQ location of the firm
23
Data provided by
Capital Deployed:
Investment into
Companies
For the second consecutive year, high-
growth startups raised more than $130
US VC Deal Flow
$160 11,359 12,000
billion, and 2019 represented the second 10,720 11,073 10,648
9,694 10,392
year on record (after 2015) where more $140 9,413 10,000
than 10,000 venture-backed companies
$120 7,958
received an investment. From 2010 to 8,000
$100 6,822
2019, investors deployed $761 billion
5,463
across nearly 94,000 financings to start, $80 6,000
4,772 4,546
4,338
build, and grow 87,000+ businesses
$60
3,358 4,000
across the country. 2,995
$40
In 2019, 10,430 venture-backed 2,000
$141.8
$133.4
$20
$23.7
$29.3
$37.9
$36.9
$27.5
$31.6
$44.8
$41.3
$47.7
$72.3
$83.5
$78.1
$87.1
companies received $133 billion in
$0 0
funding. Mega-deals (i.e., investments
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
of $100 million+ into venture-backed Deal Value ($B) Deal Count Company Count
companies) accounted for 44% of total Source: NVCA 2020 Yearbook, Data Provided by PitchBook
capital invested in 2019, slightly down
US VC Deal Flow by Stage (#)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Angel &
460 790 923 1,235 1,746 2,618 3,557 4,668 5,491 5,783 4,790 4,956 4,622 4,760
seed
Early
1,758 2,125 2,288 1,859 2,129 2,453 2,630 2,852 3,172 3,250 3,016 3,384 3,731 3,882
VC
Later
1,140 1,423 1,561 1,452 1,588 1,751 1,771 1,893 2,057 2,040 1,888 2,052 2,295 2,717
VC
24
Data provided by
from 2018, but the 237-deal count

2019 US VC Deals by Stage ($B)
was the highest on record. Many of
these mega-deals are for unicorns (i.e.,
venture-backed companies valued at $9.6
$1 billion+), since they tend to be later in

their growth cycle and larger companies. Late VC
Unicorns attracted $37 billion, or 27%

of total capital invested, but less than $43.2
Early VC
1.4% of the total deals completed in 2019.
Mirroring mega-deal count, unicorn deal
count (157) also hit a record high last
$80.7 Angel & Seed
year.
Mega-deals and unicorns were

much rarer in 2010, but the decade’s
progression brought a new normal with Source: NVCA 2020 Yearbook, Data Provided by PitchBook
a steady rise in deal sizes, pre-money

valuations, and company age across US VC Unicorn Deal Activity by Year
stages and series. By the end of 2019, $50 180
the median angel/seed deal increased $45 160
2.3x, the median early-stage VC deal $40 140
increased 2.4x, and the median later-
$35
120
stage VC deal increased 1.8x compared
$30
with 2010. Median pre-money valuations 100
$25
grew by even higher multiples—Series 80
$20
A increased 3.7x, Series B 3.6x, Series C 60
$15
4.1x, and Series D+ 5.7x.
$10 40
$14.4
$18.4
$18.3
$17.8
$47.0
$36.6
With the shift in deal sizes and $5 20
valuations, many consider a Series A $0 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
deal today what a seed investment was
Deal Value ($B) Deal Count
earlier in the decade. Capital needs for
starting a company, particularly in the
tech sector, have significantly dropped. Sectors count last year. On a relative basis, both
The prevalence of cloud-based services of these metrics are a decline compared
has undercut large infrastructure costs The software sector’s dominance with 2010. However, on an absolute
that were once the norm. At the same continued in 2019. Last year, companies basis, 2019 life science dollars invested
time, more data-centric and software/ in this sector comprised 34% of total and deal count were 2.9x and 1.7x higher,
services companies have emerged, capital invested and 36% of total deal respectively, than 2010.
compared to the prior era of hardware- count. This is on par with the sector’s
Companies in the business products
centric business models. Furthermore, an annual share over the decade.
and services (B2B) sector took the top
influx of capital available through several
The upward trend of life sciences VC two spots in the ranking of largest
strong venture fundraising years—and
activity continued, with more than $22 investments in 2019: The We Company’s
more sources of capital from a diverse
billion invested across 1,487 companies $5 billion investment and Flexport’s $1
investor base across company stages—
in 2019, accounting for 17% of total billion investment.
have transformed the industry.
capital invested and 14% of total deal
25
Data provided by
Investment Stages & by an institutional venture investor) annual growth for VC investment over
spiked in the middle of the decade and the past five years (for those MSAs with
First-time Fundings returned to pre-2012 levels in 2019. at least $10 million in VC investment in
The number of angel/seed VC 2,729 companies raised first-time 2014 and 2019).
investments in 2019 remained steady funding and attracted $11.3 billion, the
California, Massachusetts, and New
compared to 2018, with 4,760 deals second-highest annual amount of capital
York continued their dominance as the
completed representing 42% of total invested on record. Though the life
country’s VC hubs; however, California
deals in 2019. Angel/seed deal count last sciences sector attracted 17% of overall
and Massachusetts both saw year-over-
year was more than 2.7x higher than in capital invested in 2019, the sector
year declines in capital invested in 2019
2010. attracted 26% of capital invested via
versus 2018. Collectively, these three
first-time financings. Pharma & biotech
Nearly 4,000 early-stage investments states accounted for 53% of total deal
companies attracted $2.9 billion in
closed in 2019, representing a little over count and 73% of total capital invested
first-time financings, the highest among
one-third of total deal count. Early- in 2019. The share of deal count last year
sectors last year.
stage VC grew 1.8x in absolute terms was on par with the start of the decade in
but dropped from 39% of deal share Geographical Analysis 2010, whereas their share of total capital
compared with 2010. invested in 2010 was 64%.
Venture funding reached startups in all
Later-stage VC investments surged in the 50 states and the District of Columbia, Globally, startups raised $257 billion
latter part of the decade, reaching more 242 Metropolitan Statistical Areas across 23,268 deals in 2019, a 17% and
than 2,700 closed in 2019 and a 1.7x (MSAs), and 397 Congressional Districts. 2% year-over-year decline, respectively.
increase compared with 2010. Last year, Buffalo, NY, Boise City, ID, and Richmond, The US represented 52% and 49% of the
later-stage deals comprised about one- VA saw the biggest growth rate** for global total, respectively. In 2010, the US
quarter of total deal count. annual number of VC investments over accounted for 67% of global VC dollars
the past five years (for those MSAs with and 61% of global VC deal count.
The number of first-time financings (i.e., at least 15 in 2019). Bend, OR, Rochester,
first round of equity funding in a startup NY, and Grand Rapids, MI saw the largest
Insurance
2019 US VC Deals by Sector ($B)

*Other industry groups below:
Commercial Products Other Financial Services
Commercial Transportation Other Healthcare
Commercial Services $14.0 IT Hardware $3.9 Other Business Products and IT Services
Services
Other Information Technology
Consumer Durables
Consumer Goods & Recreation $6.3 Media $2.9 Agriculture
Consumer Non-Durables
Chemicals and Gases
Services (Non-Financial)
Energy $1.5 Other $30.6 Construction (Non-Wood)
Transportation
Containers and Packaging
Other Consumer Products and
Forestry
HC Devices & Supplies $5.7 Pharma & Biotech $16.7 Services
Metals, Minerals and Mining
Utilities
Textiles
HC Services & Systems $7.1 Software $44.8 Other Energy
Other Materials
Capital Markets/Institutions
Commercial Banks
26
Data provided by
US VC Deal Flow by State in 2019

Company # of Deals Capital Missouri 67 70 $440.5
Count Closed Invested ($M)
Montana 24 25 $119.0
Alabama 29 30 $58.9
Nebraska 31 34 $69.0
Alaska 11 13 $25.1
Nevada 33 34 $141.0
Arizona 116 123 $834.7
New Hampshire 27 29 $135.2
Arkansas 28 32 $71.9
New Jersey 139 146 $1,271.2
California 3519 3870 $65,601.7
New Mexico 29 30 $302.6
Colorado 361 401 $2,509.4
New York 1283 1400 $20,901.7
Connecticut 100 116 $867.8
North Carolina 199 211 $1,218.5
Delaware 72 78 $249.4
North Dakota 7 7 $21.2
District of Columbia 68 73 $464.2
Ohio 139 149 $960.0
Florida 255 269 $2,918.7
Oklahoma 16 17 $36.6
Georgia 153 169 $1,672.7
Oregon 130 141 $952.3
Hawaii 15 19 $41.8
Pennsylvania 265 289 $2,653.1
Idaho 29 30 $86.8
Rhode Island 22 22 $61.6
Illinois 293 312 $2,213.0
South Carolina 55 65 $132.2
Indiana 131 145 $380.8
South Dakota 8 8 $9.1
Iowa 31 32 $41.2
Tennessee 95 107 $928.7
Kansas 27 28 $276.1
Texas 538 584 $3,695.4
Kentucky 34 35 $248.1
Utah 141 150 $1,390.4
Louisiana 22 22 $130.4
Vermont 26 29 $94.8
Maine 27 29 $46.3
Virginia 194 211 $1,171.1
Maryland 136 146 $921.4
Washington 421 460 $3,887.8
Massachusetts 720 773 $10,832.5
West Virginia 1 1 $0.2
Michigan 127 140 $803.2
Wisconsin 63 68 $248.5
Minnesota 122 135 $1,217.9
Wyoming 9 9 $8.3
Mississippi 6 7 $7.9
Top 10 US VC Deals in 2019

Company Name Close Date Deal Size ($M) Deal Type Industry Sector State
January 8; October 22,

The We Company $5,000.0 Later VC B2B New York
2019
Flexport April 22, 2019 $1,000.0 Later VC B2B California
Nuro February 11, 2019 $940.0 Early VC B2C California
REEF Technology March 1, 2019 $900.0 Late VC IT Florida
JUUL August 16, 2019 $785.2 Late VC B2C California
GoPuff August 1, 2019 $750.0 Late VC B2C Pennsylvania
DoorDash November 13, 2019 $700.0 Late VC B2C California
Bright Health December 16, 2019 $635.0 Late VC Financial Services Minnesota
Aurora Innovation February 7, 2019 $600.0 Early VC B2C California
UiPath April 30, 2019 $568.0 Late VC IT New York

27
Data provided by
2019 VC Deals & Company Counts by # of States Invested Into by Investor

State HQ State
Company Capital Invested % of
% of Total Investor HQ State # of States Invested In
Count ($M) Total
California 3,519 33.7% $65,601.7 49.2% California 46
New York 1,283 12.3% $20,901.7 15.7% New York 43
Illinois 40
Massachusetts 720 6.9% $10,832.5 8.1%
Massachusetts 35
Washington 421 4.0% $3,887.8 2.9%
Texas 34
Texas 538 5.2% $3,695.4 2.8%
District of Columbia 33
Florida 255 2.4% $2,918.7 2.2%
Maryland 32
Pennsylvania 265 2.5% $2,653.1 2.0%
Colorado 31
Colorado 361 3.5% $2,509.4 1.9%
Florida 29
Illinois 293 2.8% $2,213.0 1.7%
Washington 27
Georgia 153 1.5% $1,672.7 1.3%
Georgia 26
All Others 2,622 25.1% $16,535.4 12.4%
New Jersey 26
Total 10,430 $133,421.5
Ohio 25
Source: NVCA 2020 Yearbook, Data Provided by PitchBook Tennessee 25
Top 5 States by Percentage of 2019

Missouri 25
Pennsylvania 23
Deals Done in State Which Featured Virginia 23
Investor(s) from Outside State North Carolina 23
Company HQ State % Invested From Outside State Minnesota 21
Delaware 100% Michigan 21
District of Columbia 88% Utah 21
New Jersey 84% Indiana 20
Minnesota 76% Connecticut 19
Arizona 64% Oregon 18
Source: NVCA 2020 Yearbook, Data Provided by PitchBook New Hampshire 17

Example of how to read this table: 88% of deals done by DC-based investors were
investments into DC-based companies.
Wisconsin 16
*This ranking is inclusive of states with 20 or more investments Kansas 15
Kentucky 14
Top 5 States by Percentage of 2018 Iowa 13
Deals Done in State which Featured Nebraska 12
Investor(s) from that State Nevada 11
Company HQ State % Invested From Within State Louisiana 10
Nebraska 91% Arizona 10
Connecticut 84% Source: NVCA 2020 Yearbook, Data Provided by PitchBook
California 82%
# of States California Investors
Indiana 81%
Invested Into by Year
Michigan 70% Year # of States Invested In
Source: NVCA 2020 Yearbook, Data Provided by PitchBook 2007 37

Example of how to read this table: 91% of investments in Nebraska-based companies
2013 45
featured at least one Nebraska-based investor.
*This ranking is inclusive of states with 20 or more investments 2019 46
28
Data provided by
First-time Financings
US First VC & Follow-on VC Deal Flow ($B) US VC Deal Flow by
$160 Sector: First-Round VC
$140 in 2019
$120 # of Deals Capital Raised
Sector
Closed ($M)
$100
Commercial
317 $1,097.7
$80 Services
$60
Consumer
Goods & 161 $521.6
$40 Recreation
$20 Energy 31 $54.0
$0 HC Devices &
105 $551.1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Supplies
First Follow-On
HC Services &
Source: NVCA 2020 Yearbook, Data Provided by PitchBook 205 $538.3
Systems
IT Hardware 70 $205.8
US First VC & Follow-on VC Deal Flow Media 110 $239.9
(Company Counts) Other 820 $2,608.1

12,000 Pharma &
208 $2,898.3
Biotech
10,000
Software 903 $2,585.9
8,000 Source: NVCA 2020 Yearbook, Data Provided by PitchBook
6,000
4,000
2,000
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
First Follow-On
29
Data provided by
Life Sciences
US Life Sciences VC Deal Flow
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Company Count 10 9 8 8 9 9 10 13 15 13 18 24 22
# of Deals Closed 822 881 880 964 1,055 1,098 1,174 1,242 1,351 1,213 1,414 1,500 1,603
Company Count 767 810 808 885 975 1,006 1,086 1,157 1,253 1,161 1,329 1,408 1,487
US Life Sciences VC Invested ($M) by Sector

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Biotechnology $1,788.6 $1,375.4 $1,980.7 $2,158.5 $2,101.8 $2,123.5 $2,506.3 $3,637.4 $5,444.3 $4,724.7 $7,700.6 $10,815.0 $10,005.9
Diagnostic
$715.0 $762.6 $452.6 $691.4 $686.9 $615.6 $681.6 $850.4 $888.1 $740.2 $1,257.0 $1,509.0 $1,559.6
Equipment
Discovery Tools
$119.6 $69.8 $113.0 $65.6 $77.7 $10.2 $88.0 $47.9 $71.6 $106.6 $62.1 $16.0 $192.0
(Healthcare)
Drug Delivery $520.8 $559.7 $182.0 $168.6 $510.7 $325.9 $363.6 $345.6 $512.2 $287.2 $440.9 $213.2 $222.3
Drug Discovery $1,457.1 $1,346.5 $1,388.0 $1,187.5 $1,336.4 $2,081.9 $2,496.7 $3,148.6 $4,120.3 $3,496.8 $3,366.8 $6,082.6 $4,640.5
Medical Supplies $235.9 $176.6 $91.6 $116.3 $160.7 $298.0 $137.2 $109.8 $66.9 $113.1 $159.0 $233.4 $183.7
Monitoring
$216.4 $373.4 $181.9 $183.3 $388.0 $295.9 $494.9 $1,260.2 $456.1 $443.8 $682.9 $684.4 $790.3
Equipment
Other Devices and

$258.7 $168.8 $110.3 $80.1 $213.7 $284.0 $139.6 $241.8 $235.8 $201.6 $402.2 $602.1 $346.2
Supplies
Other
Pharmaceuticals $57.2 $96.0 $64.8 $126.4 $69.8 $63.9 $23.9 $49.4 $45.6 $46.7 $63.8 $284.5 $282.6
and Biotechnology
Pharmaceuticals $1,753.2 $1,583.5 $1,258.4 $976.4 $942.2 $604.4 $802.5 $608.5 $524.3 $560.4 $748.5 $1,104.3 $1,375.4
Surgical Devices $1,188.5 $1,184.7 $920.9 $972.6 $1,106.3 $927.3 $1,115.4 $1,190.0 $1,130.8 $987.0 $1,184.2 $1,081.9 $940.5
Therapeutic Devices $1,281.3 $1,644.2 $1,303.4 $1,104.9 $1,252.1 $1,130.1 $1,356.0 $1,030.6 $1,660.8 $1,142.0 $1,493.7 $1,773.9 $1,867.8
30
Data provided by
US Life Sciences VC Deal Count by Sector

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Biotechnology 164 166 191 219 225 269 293 330 369 363 464 476 435
Diagnostic
99 111 89 127 121 128 117 126 140 122 123 143 156
Equipment
Discovery Tools
11 10 9 10 12 7 9 9 18 13 16 13 20
(Healthcare)
Drug Delivery 31 26 21 27 33 29 26 23 32 20 32 25 40
Drug Discovery 117 126 127 137 140 149 178 195 207 167 177 220 266
Medical Supplies 31 30 33 35 39 52 44 40 34 39 33 47 54
Monitoring
27 32 41 45 58 68 86 92 93 96 122 111 114
Equipment
Other Devices and

28 34 47 40 63 59 61 83 80 67 85 85 67
Supplies
Other
Pharmaceuticals 7 13 8 16 12 15 13 15 19 15 14 26 28
and Biotechnology
Pharmaceuticals 88 85 75 80 78 63 72 59 68 69 73 81 114
Surgical Devices 92 118 105 101 122 102 107 117 117 91 103 98 112
Therapeutic Devices 127 130 134 127 152 157 168 153 174 151 172 175 197
US VC Activity (#) in Life Sciences

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Life Sciences Deal

822 881 880 964 1,055 1,098 1,174 1,242 1,351 1,213 1,414 1,500 1,603
Count
Life Sciences as % of
18.9% 18.5% 19.4% 17.6% 15.5% 13.8% 12.5% 11.6% 12.2% 12.5% 13.6% 14.1% 14.1%
Total US VC (#)
Company count 767 810 808 885 975 1,006 1,086 1,157 1,253 1,161 1,329 1,408 1,487
US VC Activity ($B) in Life Sciences

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Life Sciences Capital

$9.6 $9.3 $8.0 $7.8 $8.8 $8.8 $10.2 $12.5 $15.2 $12.8 $17.6 $24.4 $22.4
Invested ($B)
Life Sciences as % of
25.3% 25.3% 29.3% 24.8% 19.7% 21.2% 21.4% 17.3% 18.2% 16.5% 20.2% 17.2% 16.8%
Total US VC ($)
Company Count 767 810 808 885 975 1,006 1,086 1,157 1,253 1,161 1,329 1,408 1,487
31
Data provided by
Corporate Venture Capital

Activity from corporate venture capital with investors disclosed). These 1,776 also marked the seventh consecutive
(CVC) investors remained elevated in investments represented an aggregate year where more than 1,200 venture
2019. CVC investors participated in 1,776 deal size (including non-CVC investors) investments involved CVC participation.
venture deals last year, representing 24% of $57 billion, the second-highest annual
of total VC deal count (for those VC deals amount of the past 15 years. 2019
US Corporate VC Investment by Year

Average Median Median
% of VC Deals Average Average Average Median Median Total CVC % of VC Deals
# of # of VC Deals Deal Deal Deal Total VC
with CVC Deal Value Post Post Post Post Capital with CVC
All VC with CVC Value Value Value Capital
Involvement (All VC, Valuation Valuation Valuation Valuation Raised Involvement
Deals Involvement (CVC, (All VC, (CVC, Raised ($M)
(#) $M) (All VC, $M) (CVC, $M) (All VC, $M) (CVC, $M) ($M) ($)
$M) $M) $M)
2005 2,339 526 22% $9.6 $ 11.4 $6.0 $7.5 $42.4 $56.1 $23.9 $30.6 $21.0 $5.7 27%
2006 2,663 587 22% $10.7 $16.4 $6.0 $10.0 $48.2 $65.5 $24.3 $40.0 $26.4 $9.1 35%
2007 3,338 710 21% $11.2 $16.5 $5.6 $10.0 $60.7 $115.2 $24.4 $41.4 $34.3 $11.3 33%
2008 3,622 726 20% $9.9 $14.7 $5.1 $8.5 $60.3 $75.4 $23.0 $35.5 $33.0 $10.1 31%
2009 2,923 532 18% $8.8 $14.6 $4.1 $8.6 $62.0 $83.4 $19.0 $38.0 $22.9 $7.2 31%
2010 3,462 596 17% $8.4 $15.5 $3.0 $8.0 $66.6 $92.8 $18.5 $33.9 $25.6 $8.5 33%
2011 4,653 775 17% $9.5 $18.7 $2.6 $7.5 $134.5 $151.0 $18.5 $40.0 $38.4 $13.4 35%
2012 5,620 903 16% $7.2 $14.7 $2.0 $6.5 $62.5 $98.6 $17.2 $35.4 $35.0 $12.2 35%
2013 6,555 1,209 18% $7.2 $15.2 $2.0 $6.0 $66.6 $136.4 $17.3 $38.7 $40.7 $16.8 41%
2014 7,236 1,486 21% $10.2 $22.3 $2.3 $7.0 $125.6 $266.8 $19.8 $41.9 $62.7 $30.4 48%
2015 7,182 1,613 22% $12.1 $26.6 $2.8 $9.0 $141.2 $339.4 $21.0 $48.1 $74.3 $39.3 53%
2016 6,296 1,559 25% $13.0 $26.6 $3.4 $9.1 $141.7 $313.6 $21.6 $41.2 $70.7 $37.2 53%
2017 6,750 1,667 25% $13.4 $25.9 $4.0 $10.0 $121.3 $210.9 $22.9 $41.0 $77.2 $38.8 50%
2018 7,333 1,846 25% $21.1 $42.2 $4.9 $11.0 $215.8 $412.6 $29.5 $54.9 $130.1 $71.4 55%
2019 7,427 1,776 24% $20.4 $36.2 $5.3 $13.7 $221.5 $319.8 $33.3 $70.0 $121.2 $57.1 47%
32
Data provided by
Growth Equity
Growth equity* sits at the later end of the
venture capital spectrum, filling a gap
the PitchBook Platform are available on
US Growth Equity
page 60.
for mature companies that do not have Investments in 2019
a need for early-stage venture capital Momentum for growth equity investment
by Sector (#)
nor would a buyout by a private equity continued in 2019 and grew rapidly Software
firm make sense for their growth. Growth over the decade. Investors deployed
Pharma & Biotech
equity can also meet capital needs for $66 billion across 1,217 growth equity
Other
9%
larger later-stage companies staying investments last year, a slight year-over- 4%
1% Media
private longer than historically was the year decline in capital invested but on par 5%
38%
IT Hardware
case. Many growth equity deals are also with deal count in 2018. Growth equity 9%
included in the venture capital statistics has evolved into its own sub-asset class 4%
HC Services & Systems
2%
in the Yearbook; however, others are since 2010, when investors deployed HC Devices & Supplies
6%
classified as growth/expansion and are $19.5 billion across 551 deals. 22% Energy
not included. Consumer Goods &

*Growth equity is not included as a subset Recreation
Commercial Services
NVCA defines most growth equity of overall VC data in this publication, but is
Source: NVCA 2020 Yearbook,
investments as having the following key rather its own unique dataset. More details Data Provided by PitchBook
characteristics: 1) company has a proven on the methodology are on page 60.
business model (established product and/

or technology and existing customers);
2) company’s revenues are growing
rapidly; 3) company is often cashflow
positive, profitable or approaching
profitability; 4) company is often founder-
US Growth Equity Deal Flow by Year
owned and / or managed; 5) investor is 1,217 1,217
agnostic about control and purchases 1,021

1,001
minority ownership positions more often 893 882
than not; 6) industry investment mix is
695
similar to that of earlier-stage venture 623 643 670
603
capital investors; 7) capital is used for 551
474
company needs or shareholder liquidity; 378 409
8) additional financing rounds are not

usually expected until exit; 9) investments
$11.1
$16.3
$22.1
$23.1
$14.6
$19.5
$24.3
$22.9
$23.5
$41.2
$48.4
$42.5
$43.1
$70.5
$66.4
are often unlevered or use light leverage

at purchase; and 10) investment returns
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
are primarily a function of growth, not Deal Value ($B) Deal Count
leverage, with a lower expected loss
ratio than venture capital portfolios.
Additional details on the criteria used to
identify growth equity investments from
33
Data provided by
Exit Landscape:
Venture-backed IPOs
& M&As
The exit environment drives the true US VC-backed IPOs by Year
measure of success for venture-backed $250 140
companies. Once successful portfolio
120
startups mature, venture funds generally $200
exit their positions in those companies 100
by taking them public through an initial $150

80
public offering (IPO) or by selling them
60
$100
to presumably larger entities (via an
acquisition, merger, or trade sale) or to a 40
$50
financial buyer (e.g., a private equity buyer). 20
This exit in the company allows the venture
$0 0
firm to distribute the proceeds to investors, 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
raise a new fund for future investment, and Exit Size ($B) Exit Count
US IPOs by Year Top 10 US VC-backed IPOs in 2019

# of VC
# of All IPOs
Backed IPOs Company Name Exit size ($M) Industry Sector State
2007 385 90
Uber $67,613.5 B2C California
2008 193 13
Slack (US) $23,250.0 Information Technology California
2009 134 11
2010 218 40
Lyft $21,660.0 B2C California
2011 214 46
Zoom Video Communications $8,873.2 Information Technology California
2012 244 59
Pinterest $8,632.5 Information Technology California
2013 362 87
2014 392 124 Datadog $7,177.5 Information Technology New York
2015 286 80 Peloton $6,942.3 B2C New York
2016 194 42
CrowdStrike $6,075.4 Information Technology California
2017 246 59
Cloudflare $3,875.2 Information Technology California
2018 240 89
2019 192 82 10x Genomics $3,270.1 Healthcare California
34
Data provided by
invest in the next generation of companies.

Ratio of IPO Pre-Valuation to Total VC Invested
This section collectively refers to any type
Post Value Capital Raised IPO Pre Value Total VC Raised
of sale to a corporate entity or to a financial ($B) ($B) ($B) to Date ($B)
Ratio
buyer as a merger and acquisition (M&A).

2007 $33.2 $24.5 $24.5 $5.00 4.9
IPO trends are analyzed separately.
2008 $2.8 $2.3 $2.3 $0.40 5.6
Venture-backed exit activity was the big
story for VC in 2019, a record year for exit 2009 $9.6 $7.8 $7.8 $0.80 9.9
value following a buildup of large, late-

2010 $15.3 $12.1 $12.1 $4.64 2.6
stage companies in the private markets.
2011 $43.3 $37.8 $37.8 $6.52 5.8
The 82 venture-backed IPOs representing
$199 billion in exit value in 2019 marked 2012 $112.7 $91.2 $91.2 $7.62 12.0
the highest annual exit value on record.
2013 $52.5 $43.7 $43.7 $10.24 4.3
Together, these 82 IPOs had a post-money
valuation of $223 billion, stemming from 2014 $52.4 $42.7 $42.7 $11.10 3.9
just $35 billion invested prior to IPO. The 2015 $39.0 $31.9 $31.9 $8.92 3.6
median size of IPOs in 2019 reached
2016 $15.7 $12.4 $12.4 $4.87 2.5
$369 million and median IPO post-money
valuation reached $462 million, both metrics 2017 $59.7 $51.3 $51.3 $9.57 5.4
breaking the 15-year high reached in 2018.
2018 $77.4 $65.3 $65.3 $15.83 4.1
Companies that went public in 2018 had the
lowest median age from first VC funding 2019 $223.5 $199.3 $199.3 $35.15 5.7
US VC-backed IPO Value and Age Characteristics

Median Time
Deal Value Median Deal Average Deal Post Value Median Post Average Post Average Time
# of IPOs from 1st VC to
($M) Value ($M) Value ($M) ($M) Value ($M) Value ($M) from 1st VC to Exit
Exit
2007 90 $24,510.0 $248.8 $310.3 $33,169.0 $330.2 $409.5 5.2 5.7
2008 13 $2,254.1 $143.6 $281.8 $2,849.1 $212.2 $356.1 4.9 4.8
2009 11 $7,838.8 $317.1 $783.9 $9,624.2 $387.1 $962.4 7.3 7.5
2010 40 $12,133.2 $203.2 $303.3 $15,332.5 $278.7 $383.3 6.7 7.2
2011 46 $37,787.9 $331.2 $944.7 $43,333.4 $423.6 $1,083.3 5.7 6.6
2012 59 $91,249.3 $303.3 $1,862.2 $112,655.8 $356.6 $2,086.2 7.1 7.7
2013 87 $43,663.5 $240.1 $567.1 $52,500.9 $328.5 $648.2 6.7 7.2
2014 124 $42,732.7 $186.3 $359.1 $52,409.7 $250.4 $440.4 7.1 7.3
2015 80 $31,854.6 $220.6 $430.5 $38,989.5 $297.0 $526.9 6.5 6.0
2016 42 $12,363.6 $178.3 $325.4 $15,681.6 $239.3 $382.5 7.8 7.3
2017 59 $51,289.5 $306.2 $899.8 $59,683.2 $411.2 $1,047.1 7.1 6.9
2018 89 $65,280.1 $344.3 $759.1 $77,392.4 $448.8 $899.9 4.7 6.6
2019 82 $199,253.9 $369.5 $2,459.9 $223,469.4 $462.3 $2,758.9 6.9 6.9
35
Data provided by
US Venture-backed M&A Activity to IPO (4.8 years), but the median age of
companies going public in 2019 increased
$80 1,200
to 6.9 years.
$70
1,000 The slate of 2019 IPOs included several
$60
household names—B2C companies Uber,
800
$50 Lyft, and Peloton were three of the 10 largest
IPOs of the year. Software companies Slack
$40 600
and Zoom Video Communications ranked
$30
400 second and fourth, respectively, of 2019’s
$20 largest IPOs. One life sciences company—
200 biotech company 10x Genomics—cracked
$10
the top 10 ranking. Geographically,
$0 0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 companies based in California comprised the
Deal Value ($M) Acquisition Count Disclosed Value Count five largest IPOs of the year.
Venture-backed companies accounted
for 43% of all US IPOs in 2019, surpassing
the 15-year high set in 2018. Even with a
big year for venture-backed IPOs, M&As
US VC-backed M&A Value and Age Characteristics continued to account for the majority of
# with
Median Average Median Average exits, comprising an average of 92% of
# of Deal Value Deal Deal Time from Time from
Acquisitions
Disclosed
($M) Value Value 1st VC to 1st VC to
annual venture-backed exits from 2004-
Values
($M) ($M) Exit Exit 2019.
2007 537 250 $32,602.9 $47.5 $130.4 4.7 4.9 M&A activity remained strong in the
second half of the decade, with six
2008 480 183 $15,183.5 $34.2 $83.0 4.7 4.9
straight years of $40 billion+ in disclosed
2009 469 148 $13,697.0 $22.4 $92.5 4.4 4.9 exit value. In 2019, 836 M&As (219 with
disclosed values) represented a total of
2010 667 239 $29,262.8 $40.0 $122.4 4.4 5.0 $61.4 billion in disclosed exit value, a 6%
decrease year-over-year.
2011 693 262 $28,886.7 $42.2 $110.3 4.2 4.9
After peaking in 2014, M&A exit count

2012 809 253 $33,129.2 $41.2 $130.9 4.5 5.1
dropped off. However, this diminished
2013 819 260 $28,659.2 $36.0 $110.2 3.8 4.9 volume posted in 2019 at higher
valuations—the median and average
2014 957 314 $68,820.5 $50.0 $219.2 4.5 5.3 deal values reached $100 million and
$280 million, respectively, both 16-
2015 950 278 $43,699.7 $45.5 $157.2 4.3 5.5
year highs. The age of companies that
2016 866 249 $60,916.8 $78.0 $244.6 4.5 5.7 were acquired or merged continued to
increase, with a median age from first
2017 870 233 $46,505.6 $70.0 $199.6 5.2 6.2
venture funding to exit of 5.5 years.
2018 933 256 $65,062.8 $98.3 $254.2 5.2 6.1 M&A activity for software companies
cooled in 2019 after a record year in 2018.
2019 836 219 $61,378.6 $100.0 $280.3 5.5 6.3
Last year, the software sector accounted
for 45% of disclosed M&As by value. SAP’s
$8 billion acquisition of Utah-based survey
platform provider Qualtrics was the largest
of the year. Four healthcare companies
36
Data provided by
ranked in the top 10 largest M&A events,

Top 10 US VC-backed M&A in 2019
led by Johnson & Johnson’s $5.75 billion
acquisition of robotic micro-surgical device Company Name Deal Size ($M) Industry Sector State
developer Auris. Three companies in the top
Qualtrics $8,000.0 Information Technology Utah
10 were headquartered outside California,
Massachusetts, or New York. Auris $5,750.0 Healthcare California
Consumer Products and

Unicorns were a key driver of 2019’s robust Honey Science $4,000.0 California
Services (B2C)
exit activity—36 companies, many of them
IFM Tre $1,575.0 Healthcare Massachusetts
unicorns, held $1 billion+ exits in 2019 for
an aggregate exit value of $208 billion, both ConnectWise $1,500.0 Information Technology Florida
metrics representing record highs. These
Cylance $1,400.0 Information Technology California
companies matured and graduated to their
next stage of growth, while generating Promedior $1,390.0 Healthcare Massachusetts
record value for public and private market Peloton Therapeutics $1,050.0 Healthcare Texas
investors. However, some IPOs of 2019
SignalFx $1,050.0 Information Technology California
found their performance and valuations
on shaky ground after floating. Against a Acquia $1,000.0 Information Technology Massachusetts
backdrop of concerns around corporate
governance and profitability, stock prices for
some notable companies dropped. These
trends will certainly be top of mind for
venture-backed companies waiting in the
wings to follow the IPO path in 2020.
US VC-backed IPO Post-Valuation US VC-backed M&A by Range

by Range (Company Count) (Company Count)
$1B- $500M- $100M-
>$10B <$100M >$1B $500M-$1B $100M-$500M <$100M
$10B $1B $500M
2007 1 9 68 459
2007 - 5 14 55 16
2008 1 4 34 441
2008 - 1 - 5 7
2009 1 5 29 434
2009 - 2 2 6 1
2010 1 12 58 596
2010 - 3 5 27 5
2011 3 5 62 623
2011 1 7 9 19 10
2012 4 9 67 729
2012 1 7 11 32 8
2013 4 6 65 744
2013 1 9 12 48 17
2014 9 18 89 841
2014 - 10 18 73 23
2015 8 9 80 853
2015 - 9 13 36 22
2016 8 18 84 756
2016 - 3 8 21 10
2017 8 17 70 775
2017 1 13 10 26 9
2018 10 13 89 821
2018 - 22 16 43 8
2019 9 14 79 734
2019 4 23 12 39 4
37
Data provided by
NVCA Decade
in Review
2010 2012 2013 2014
Dodd-Frank: NVCA secured an JOBS Act: NVCA supported and Startup Visa: NVCA’s proposed NVCA Diversity Task Force: NVCA
exemption for venture capital helped create the Jumpstart “Startup Visa” was included in formed the NVCA Diversity Task
funds from a requirement Our Business Startups (JOBS) the bipartisan Comprehensive Force to develop a clear and
contained in Dodd-Frank that Act, which passed Congress Immigration Reform bill passed measurable path to increase
private funds become registered and was signed into law by by the Senate. The Startup Visa opportunities for women and
investment advisors (RIAs). President Obama. The JOBS Act would be a separate visa category men of diverse backgrounds
While the final definition of a substantially changed a number for immigrant entrepreneurs who to thrive in venture capital and
“venture capital fund” at the SEC of laws and regulations, making create a new business, are backed entrepreneurship. Through forums,
limited the scope of the relief in it easier for emerging growth by venture capitalists or other research, and programming,
the industry (an issue we are companies to enter the public investors, and create American the NVCA Diversity Task Force
actively tackling today), most markets. Importantly, the bill jobs. While the bill failed to pass examined the lack of diversity in
firms have been able to hold created the category of emerging in the House, NVCA has continued the venture capital industry and
down annual compliance costs by growth company (EGC), which to push to pass a Startup Visa into developed meaningful solutions
staying within the confines of the allows companies under $1 billion law. to build a more inclusive, stronger
definition. A recent survey found in annual revenue and who are innovation economy for the 21st
that median annual compliance either public for less than five century. This initiative would
costs jump by about 8x for firms years or privately held, a scaled ultimately be expanded and served
that have to become RIAs. regulatory and disclosure regime. as the foundation for Venture
Today, 90% of companies that go Forward.
public utilize the benefits of EGC
status.
2016 NVCA-Deloitte Human Capital Survey Infographic Inaugural PitchBook-NVCA

Venture Monitor cover - from
Q3 2016
Bill Draper wins the Lifetime Achievement in Venture Capital

Award at the first standalone NVCA Leadership Gala in 2017
38
2015 2016 2017 2018
R&D Credit Payroll Tax Offset: One of NVCA-Deloitte Human Tax Reform Efforts: NVCA worked Stanford/NVCA Venture
NVCA’s tax priorities is working to make the Capital Survey: hard to protect the VC and startup Capital Symposium: The first
R&D credit more effective for startups where Partnering with Deloitte, ecosystem in the Tax Cuts and annual Stanford/NVCA Venture
so much innovation takes place. As part of NVCA released the first Jobs Act, which passed at the end Capital Symposium was held
this effort, the PATH Act included a provision ever NVCA-Deloitte of 2017. NVCA successfully fought on Stanford’s campus. The
that now allows early-stage companies to Human Capital Survey, to remove provisions to tax stock VC Symposium is the premier
use R&D credits to offset up to $250,000 in which captures critical options at vesting rather than governance program for
payroll taxes. The company must have had data on the workforce exercise, an existential fight for the members of the venture capital
sales of less than $5 million annually and at venture capital firms, entrepreneurial business model. community. Investors, startup
have been considered an active business for develops a baseline NVCA worked against a tax on executives, and directors of
no more than five years. understanding of graduate student tuition waivers, venture-backed companies gain
demographics within among a number of other issues. the skills needed to respond
Qualified Small Business Stock (QSBS) the VC industry, and NVCA also fought to preserve effectively to real-world
Rules: Another provision important to uncovers the current capital gains treatment of carried governance challenges that
NVCA in the PATH Act contained several state of diversity and interest in the face of significant commonly arise at VC firms and
improvements to QSBS that make the inclusion (D&I) across political headwinds. NVCA also their portfolio companies.
provision workable for investors were the industry. The survey protected Qualified Small Business
made permanent as part of this bill. These is intended to be an Stock rules and the payroll tax Foreign Investment (CFIUS/
improvements exempt QSBS gains from the educational resource offset for the R&D credit. FIRRMA): NVCA led efforts to
Alternative Minimum Tax (AMT) and allow for venture capital firms ensure the Foreign Investment
for a full 100% (up from 50%) exclusion from to understand how to NVCA Leadership Gala: NVCA held Risk Review Modernization
capital gains taxes for QSBS gains up to expand the diversity of the first annual NVCA Leadership Act (FIRRMA), which gave
either $10 million in gain or 10x the basis. their teams and portfolio Gala as a standalone event, where significant new powers to
Without these provisions, QSBS would be at companies. leaders of the venture capital CFIUS, protected passive foreign
best marginally effective. industry were honored for their investment into venture funds.
Partnership with significant contributions to advance NVCA secured key changes
Protecting Access to the Patent System PitchBook: After an innovation, strengthen the industry, in the legislative process that
for Startups: NVCA successfully fought exhaustive review and promote US entrepreneurship. prevented many venture firms
back against efforts to shift access to the process to identify a new NVCA recognized the recipients of from needing to file with CFIUS
patent system away from startups. NVCA data provider, NVCA the Lifetime Achievement in Venture ahead of investments in US
engaged to raise concerns about a bill that selected PitchBook as the Capital Award, Outstanding Service companies. NVCA held the first
would have made fundamental changes official data provider of Award, and American Spirit Award, Emerging Technology Meets
to the patent litigation system, which NVCA. The partnership and announced the winners of three National Security conference
would have increased the cost and risk of with PitchBook serves new awards, the Rising Star Award, to bring together national
almost all patents suits. While NVCA has as the cornerstone of Excellence in Healthcare Innovation security policymakers, VCs,
long advocated for reforms to the patent our continued efforts Award, and Venture Firm of the Year and entrepreneurs to discuss
system to crack down on non-practicing to be the definitive Award. foreign investment scrutiny and
entities (NPEs) and abusive patent litigation source of venture capital government interest in next-
practices, the American Innovation Act activity across the US. International Entrepreneur Rule generation technology.
would have made it harder for startups to Through the partnership, Lawsuit: NVCA filed a lawsuit
litigate patent cases against either larger NVCA and PitchBook in federal court challenging the California Carried Interest
incumbents or patent trolls. Perhaps most jointly produce the Department of Homeland Security’s Surtax: After a bill passed
concerning was inclusion of a provision PitchBook-NVCA Venture (DHS) delay of the International out of the California Revenue
that would have allowed certain prevailing Monitor, which serves Entrepreneur Rule (IER). Finalized and Taxation Committee that
defendants to pierce the corporate veil and as the authoritative by the Obama Administration, the would have imposed a 17%
hold investors responsible for legal fees quarterly report on rule would have allowed talented surtax on carried interest, NVCA
incurred by a losing entity that could not venture capital activity foreign-born entrepreneurs to engaged at the state level and
afford the prevailing party’s legal fees. NVCA in the entrepreneurial travel to or stay in the United successfully kept this bill off of
successfully worked to defeat this bill and ecosystem. NVCA States to grow their companies the floor of the Assembly, saving
continues to advocate for ways to protect members also receive for two and a half years with the the state from an unintentional
startups from abusive patent litigation certain discounts and possible extension of another but destructive policy. Since then,
practices while defending their access to the special access to the two and a half years. NVCA was NVCA has continued to develop
courthouse in times of need. PitchBook platform. ultimately successful in its lawsuit, its CA-state level advocacy
although to date DHS has refused capacity.
Protecting Limited Partners from Tax SEC Office of Small to use IER to facilitate immigrant
Liabilities: NVCA successfully convinced Business Advocate: entrepreneurship. NVCA continues Blockchain Working Group:
lawmakers to drop a provision that would NVCA successfully to advocate that the Trump In response to the growth
have imposed joint and several liability on fought for legislation that Administration use this important of venture capital funding of
all partners, general and limited, for any tax created an Office of the tool. blockchain technology, NVCA
underpayments by a partnership. In their Small Business Advocate created a working group to
effort to create a new audit regime for all at the Securities and New West Coast Office: NVCA organize those interested
partnerships, Congress proposed providing Exchange Commission established its San Francisco office in the technology to build a
the IRS sweeping punitive tools to collect (SEC). This office serves to foster deeper engagement with foundation for venture capital’s
taxes from partnerships, including the ability as a counterbalance to VCs and portfolio companies, to participation. Efforts include
to force the responsibilities for underpaid the Office of the Investor better serve as the bridge between providing a unified voice in the
taxes onto anyone in the partnership. NVCA Advocate and is a voice our community and policymakers in public policy debate, creating
successfully fought to remove this extreme for small businesses, Washington. a forum for convening, and
provision and mitigate the impact of the new startups and their developing best practices
partnership audit regime passed that year. investors in SEC matters. and learning through shared
experience.
39
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2019
VC University: Launched by NVCA and

Startup@BerkeleyLaw at the University
of California, Berkeley, School of Law, VC
University democratizes access to education
on venture capital for entrepreneurs, investors,
attorneys, or anyone else interested in
emerging company finance across the country.
VC University has two components: 1) an online
certificate program; and 2) in-person events
with local university partners in emerging
ecosystems in the US – VC University LIVE. VC
University ONLINE had two cohorts of 100
participants each in 2019. VC University LIVE
hosted approximately 60 individuals each in
Ann Arbor, Michigan with the University of
Michigan, and in New Orleans with Tulane
University.
Second Edition of NVCA-Deloitte Human

Capital Survey released: NVCA launched the
second edition of the NVCA-Deloitte Human 2019 VCs-to-DC Populism Panel
Capital Survey, which found that VC firms are
beginning to make some important—albeit
small—gains in implementing strategies to
attract and retain top diverse talent.
Foreign Investment (CFIUS/FIRRMA): NVCA

helped the venture industry navigate the CFIUS
Pilot Program that put many of FIRRMA’s
authorities in place. NVCA engaged deeply
with the Treasury Department and other
CFIUS agencies as the final rules implementing
FIRRMA were put in place. Ultimately, NVCA
gained several wins for the industry that will
allow venture investors to navigate CFIUS more
easily in years to come.
NVCA Oral History Collection unveiled at

Computer History Museum: NVCA and The
Exponential Center at the Computer History
Museum announced a new partnership to
preserve and make freely accessible the NVCA
Oral History Collection, a rich set of transcripts
Senator Kyrsten Sinema speaks at NVCA’s VCs-to-DC 2019
of 17 venture industry luminaries that have
been compiled over the past fifteen years by
NVCA.
2019 Leadership Gala Awards: ARCH Venture

Partners won Firm of the Year award, John
Doerr (Kleiner Perkins) won the Lifetime
Achievement Award, Scott Sandell (NEA) won
the Outstanding Service Award, All Raise
won the American Spirit Award, Mia Hegazy
(Catalyst Investors) won the Rising Star
Award, and Bryan Roberts (Venrock) won the
Excellence in Healthcare Innovation award.
LP Office Hours: In the second year of this

program, NVCA convened 60 emerging VC fund
managers from historically underrepresented
groups in Washington, DC and Los Angeles to
learn fundraising best practices and how to
manage the GP-LP relationship with one-on-
one meetings with 20 LPs and 8 experienced
VCs. All Raise receives the America Spirit Award at NVCA’s 2019 Leadership Gala
40
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In 2020, we continue to empower the next

generation of great American companies.
Here’s How:
NVCA is here to serve our members, and we are proud to represent an industry that is
furthering solutions to meet today’s greatest challenges and advance the possibilities
of tomorrow. We are looking forward to the year ahead as we advocate on behalf
of venture capital and the entrepreneurial ecosystem. From new foreign investment
restrictions, to expansive new tax policy proposals, to immigration policy, it is sure to be
a year full of robust challenges and opportunities. Below is a just a snapshot of what we
are expecting to tackle in 2020. For more information on policy, please visit nvca.org.
2020 Election
The election and the policies that emerge will have a significant impact on VC and startups. As we progress into
2020, we are working hard to position the industry for success no matter who wins the White House, and we
will keep you informed on important developments coming from Washington and the campaign trail.
Foreign Investment and VC

The Treasury Department recently released the long-awaited final rules implementing the Foreign
Investment Risk Review Modernization Act (FIRRMA), and they are in effect as of February 13, 2020.
VCs and entrepreneurs can continue to count on NVCA to be their voice in Washington on this policy
issue for many years to come.
Volcker Rule
The Federal Reserve took the initial steps to update the Volcker Rule and once again allow banks
to invest into venture capital funds. This has been an issue we have worked on for several years,
so we’re thrilled to see this first step. NVCA will use this opportunity to further engage with the
agencies to express our support for the proposed reforms, provide input on the direct questions
asked, and urge swift action to finalize the rules and provide regulatory relief for VC funds.
41
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Shape the
future of
the venture
industry
with NVCA
Join us!
A DVO CACY | C O M M U N I T Y & E D U CAT I O N | R E S E A R C H
Please contact NVCA with

your membership queries at
[email protected] or 202.864.5918
42 nvca.org
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2020 NVCA Public

Policy Initiatives
NVCA is 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 2020 and a brief overview of the current state-of-play.
Vigilance on Modernization of Supporting Tax Policy That Encouraging Talented

Foreign Investment Laws Encourages New Company Immigrants to Found and Build
Formation Startups
Venture capital funds with foreign limited partners,
foreign co-investors, and startups considering NVCA supports tax policy that encourages Immigrant entrepreneurs have made incredible
taking foreign investment have been impacted patient, long-term investment and new company contributions to the US economy, with one-third
by a recent law that expands the mandate of formation. In 2020, we are advocating for a of US venture-backed companies that went
the Committee on Foreign Investment in the US pro-entrepreneurship tax agenda with proposals public between 2006 and 2012 having at least
(CFIUS). This issue remains a high priority in 2020 such as increasing the value of the R&D credit to one immigrant founder. But their true potential
as the Treasury and Commerce departments startups, simplifying QSBS rules, and creating has not been realized because of the lack of a
implement the new law through the rulemaking a safe harbor for startups from Section 382 loss reliable immigration category. NVCA continues
process. These rulemakings are especially limitation rules. We will continue working to ensure to be the leading advocate for policies that will
significant because the universe of VC-backed that the new tax law is implemented in a way that allow immigrant entrepreneurs to build startups
companies impacted may continue to expand due supports startups and entrepreneurship, as well as in the US and create American jobs, particularly
to the ‘emerging technologies’ rulemaking. advocating against any proposals to tax unrealized through a ‘startup visa’ that allows the world’s top
gains or increase taxes on carried interest capital entrepreneurs to launch new enterprises in the US,
gains. and under the International Entrepreneur Rule that
was the subject of a successful lawsuit NVCA filed
against the federal government.
43
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Regulatory Reforms for a Reopening the Public Markets Technology Policy for Startups
Healthier Entrepreneurial to Growth Companies
NVCA supports policies that spur technology
Ecosystem startup activity, including easing regulatory
The US has about half the total number of public burdens, reforming government procurement laws,
companies than it did 20 years ago, in no small and freeing additional spectrum for innovative
NVCA advocates for regulatory reforms that will part because of a lack of IPOs since 2000. A
lead to a healthier entrepreneurial ecosystem. products. In 2020, NVCA will engage on privacy
priority for NVCA is to make the public markets policy to ensure that legislation and regulation
Current priorities include modifying the definition more attractive to venture-backed companies by
of “venture capital fund” at the Securities and in this space does not harm young, high-growth
building off the success of the JOBS Act. Among companies as policymakers work to address harms
Exchange Commission for purposes of determining the proposals NVCA is advocating for include
fund registration. Our proposal includes making by large companies.
making Emerging Growth Company (EGC) status
the following investments qualifying: secondary more attractive, requiring disclosure of short
investments in emerging-growth companies, positions, and encouraging small cap liquidity and
fund-of-funds investments in other VC funds, and research. Reforms which encourage a more robust
cryptocurrency investments. NVCA also advocates IPO environment will create economic growth by
for reforms to the Volcker Rule to allow bank providing opportunities for startups and small cap
investment into venture capital funds, and will companies to grow as public companies.
continue to engage in the regulators’ efforts to
finalize these reforms this year.
Medical Innovation Protecting Patents for Startups Basic Research and

Technology Transfer
Venture is partnering with startups to discover NVCA advocates for ways to address abusive
groundbreaking treatments and cures for the patent litigation, while preserving access to the
most deadly and costly diseases. NVCA supports patent system for startups. Startups are often A foundation to ensuring a robust entrepreneurial
policies that streamline the regulatory approval victimized by ‘patent trolls,’ but efforts in recent ecosystem is a strong federal commitment to
process at the FDA—particularly for novel years to crack down on these entities would have basic research investment and a system to
technologies—as well as the reimbursement had their most severe impact on venture-backed effectively commercialize innovations. NVCA
process at the Centers for Medicare and Medicaid. startups. NVCA believes abusive patent litigation supports a return to our historical leadership
Steady funding and process improvements at these practices must be solved so as not to deter position of federally funded basic research activity
agencies are critical to encouraging investors to investment in patent-reliant startups, but we must by committing to a sustained annual growth in
take the long-term risk of pursuing new medical be mindful not to create unintended consequences funding of at least 4%. In addition, we can make
innovations that will save and improve patients’ that would reduce the value of patents to startups more efficient use of today’s basic research
lives. NVCA will also continue to ensure venture’s and pose a threat to the entrepreneurial ecosystem. dollars by encouraging support for key federal
voice is heard as policymakers work to reduce commercialization programs such as SBIR, STTR,
the price of prescription drugs. Making drugs and I- Corps.
affordable for all Americans is important, but
reforms should be sensitive to the current policy
balance in the US that has made our country the
world leader in life-saving drug development.
Jeff Farrah Justin Field Charlotte Savercool Jonas Murphy

General Counsel Senior Vice President Director of Manager of
[email protected] of Government Affairs Government Affairs Government Affairs
[email protected] [email protected] [email protected]
44
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NVCA Member
Community
Diverse, Engaged, Committed
Join NVCA’s dynamic How does NVCA help you succeed?
member network with
representation from 30+
states and micro VCs to
mega funds
NVCA empowers the next generation Policy & Advocacy Education & Community & Research & Data
of American companies that will fuel the Advancememt Convening
economy of tomorrow. As the voice of the
US venture capital and startup community, Who are NVCA members?
NVCA advocates for public policies that
support the American entrepreneurial
ecosystem. NVCA also fosters the success of
the venture community through best in class
VC data resources, practical education, peer-
led initiatives, and unparalleled networking
opportunities.
VC partnerships Corporate venture Seed/Micro VCs
All VCs, corporations, and individuals actively groups
investing risk equity capital in the US are
invited to become NVCA members.
See a full list of NVCA members here.
Growth equity firms University

accelerators &
Member testimonials innovation funds
“Being a part of the NVCA community has provided access “NVCA plays an important national role in highlighting venture
to valuable and impactful resources including a broader capital as one of the primary growth engines for the U.S.
network, education, and industry best practices. Through economy. These efforts ensure fair regulatory treatment of
our connection with NVCA, we have benefited from their startups and VCs, and we are grateful for them.”
expertise, allowing us to become more equipped to navigate
the venture landscape.” – Guy Turner, Hyde Park Ventures
– Kartik Gupta, Salesforce Ventures
45
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Key Programs and • Online Webinars – Ongoing

opportunities for virtual learning on
Initiatives important industry and technology What’s new in 2020
topics, led by NVCA or trusted subject
• NVCA/Stanford Venture Capital matter experts. • Politics & Priorities – Industry
Symposium – Premier governance gathering for the definitive
program for members of the venture • Legal Documents – Model documents update on how the election
capital community to gain the skills that aim to reflect, guide, and establish and presidential policy will
needed to respond effectively to real- industry standards, including HR affect the entrepreneurial
world governance challenges that practices and policies to promote ecosystem.
commonly arise at VC firms and their diversity and inclusion.
portfolio companies. • New Dues Schedule –
• CFO Task Force – VC CFOs and senior

Must-Attend Events Modernized fee structure
right-sized for 2020 and
operators engage in virtual and in- • Leadership Gala, San Francisco beyond, reducing cost
person meetings to discuss shared – Celebratory evening honoring barriers for small funds to
challenges and best practices in achievement in the VC industry. become members.
accounting, back office operations, and
financial reporting. CPE credit available. • CFO/Operations Conference – Program • VCs-to-DC Lobby Series
dedicated to CFOs and senior operations – Members visit DC to
• Strategic Communications Group – executives at VC firms. Content includes meet with lawmakers and
100+ communications, marketing, and accounting best practices, leadership government officials on key
IR executives who collaborate on digital development, and relevant public policy policy impacting VCs and
strategy, media engagement, and firm topics. startups.
brand building, among other topics.
• Strategic Communications • VC StratComm Live –
• Corporate Venture Network – Summit – Annual private forum for Events in Boston and
Community for learning and dialogue on communications and marketing NYC for marketing and
issues of interest to corporate venture professionals to share best practices communications leaders.
investors. Participants benefit from peer and discuss common challenges with
mentorship, skill-building workshops, peers and press.
and diverse perspectives on corporate
innovation. See all NVCA events here. Questions? Contact membership@
nvca.org
• Regional Fund Community – Leading
How to become a
regionally focused VCs gather to share
experience and guidance with peer GPs member
from across the country.
Visit nvca.org to apply online.
• Growth Equity Roundtable – Platform
for growth stage investors to exchange
ideas and discuss strategy, including
events in New York and San Francisco.
• Preferred Provider Program – Access Stephanie Volk Hannah Munizza

to discounted products and services Vice President of Senior Director of
from key partners serving the venture Development Development
industry including PitchBook, Carta, [email protected] [email protected]
Brex, and more.
46
Data provided by
Glossary
The following definitions are graciously provided by the Center for Private Equity and Venture Capital at the Tuck School of
Business at Dartmouth. Used by permission. NVCA and PitchBook are grateful to the Center for its support.
“A” round (“Series A”) – formerly the Alpha – a term derived from statistics adjustment provides partial protection
first “institutional” capital raised by a and finance theory that is used to and is called weighted average.
company, the “A” round is now typically describe the return produced by a fund
the second institutional round of manager in excess of the return of a ASC Topic 820 – FASB Accounting
financing for a young company where benchmark index. Manager returns and Standards Codification (ASC) Topic
venture capitalists are sufficiently benchmark returns are measured net of 820 (formerly known as FAS 157) is
interested in a company to invest a larger the risk-free rate. In addition, manager the accounting standard that dictates
amount of capital after the “Seed” round returns are adjusted for the risk of the how to measure and disclose fair value
to fund the company to the next stage of manager’s portfolio relative to the risk of for financial reporting purposes. FASB
its development. Subsequent rounds of the benchmark index. Alpha is a proxy for ASC Topic 946 (Investment Companies)
financing are called “B”, “C”, “D”, etc. manager skill. dictates that all investments should be
reported at fair value.
Accredited investor – a person or legal Alternative asset class – a class of
entity, such as a company or trust investments that includes venture capital, “B” round (“Series B”) – a financing
fund, that meets certain net worth and leverage buyouts, hedge funds, real event whereby investors such as venture
income qualifications and is considered estate, and oil and gas, but excludes capitalists and organized angel groups
to be sufficiently sophisticated to make publicly traded securities. Pension plans, that are sufficiently interested in a
investment decisions in private offerings. college endowments and other relatively company provide additional funds after
Regulation D of the Securities Act of large institutional investors typically the “A” round of financing. Subsequent
1933 exempts accredited investors from allocate a certain percentage of their rounds are called “C”, “D” and so on.
protection of the Securities Act. The investments to alternative assets with an
Basis point (“bp”) – one one-hundredth
Securities and Exchange Commission objective to diversify their portfolios.
(1/100) of a percentage unit. For example,
has proposed revisions to the accredited
Angel – a wealthy individual who invests 50 basis points equals one half of one
investor qualifying rules, which may or
in companies in relatively early stages of percent. Banks quote variable loan rates
may not result in changes for venture
development. in terms of an index plus a margin and
investors. The current criteria for a
the margin is often described in basis
natural person are: $1 million net
Angel Groups – groups of individual points, such as LIBOR plus 400 basis
worth (excluding the value of a primary
angels who invest together, individually points (or, as the experts say, “bips”).
residence) or annual income exceeding
or through a pooled vehicle, enabling
$200,000 individually or $300,000 with Beta – a measure of volatility of a public
them to share deal flow with each other.
a spouse. Directors, general partners stock relative to an index or a composite
and executive officers of the issuer are Anti-dilution – a contract clause that of all stocks in a market or geographical
considered to be accredited investors. protects an investor from a substantial region. A beta of more than one indicates
See Rule 501 of Regulation D of the SEC reduction in percentage ownership in the stock has higher volatility than the
for current details. a company due to the issuance by the index (or composite) and a beta of one
company of additional shares to other indicates volatility equivalent to the index
entities. The mechanism for making an (or composite). For example, the price of
adjustment that maintains the same a stock with a beta of 1.5 will change by
percentage ownership is called a full 1.5% if the index value changes by 1%.
ratchet. The most commonly used Typically, the S&P 500 index is used in
calculating the beta of a stock.
47
Data provided by
Beta product – a product that is being investor A’s price and investor B’s price. C Corporation – an ownership structure
tested by potential customers prior A broad-based anti-dilution method uses that allows any number of individuals
to being formally launched into the all common stock outstanding on a fully or companies to own shares. A C
marketplace. diluted basis (including all convertible corporation is a standalone legal entity,
securities, warrants and options) in so it offers some protection to its owners,
Blockchain – a distributed ledger that the denominator of the formula for managers and investors from liability
uses advanced cryptography to create determining the new weighted average resulting from its actions.
a “chain” of “blocks” of information that price. See Narrow-based weighted
are unalterable and verifiable. Useful for average anti-dilution. Capital Asset Pricing Model (CAPM) – a
recording any number of transactions method of estimating the cost of equity
or sets of data in a verifiable way that is Burn rate – the rate at which a startup capital of a company. The cost of equity
extremely difficult to modify. uses available cash to cover expenses in capital is equal to the return of a risk-free
excess of revenue. Usually expressed on investment plus a premium that reflects
Board of directors – a group of a monthly or weekly basis. the risk of the company’s equity.
individuals, typically composed of
managers, investors and experts who Business Development Company (BDC) Capital call – when a private equity fund
have a fiduciary responsibility for the – a publicly traded company that invests manager (usually a “general partner” in
well-being and proper guidance of in private companies and is required by a partnership) requests that an investor
a corporation. The board is typically law to provide meaningful support and in the fund (a “limited partner”) provide
elected by the shareholders. assistance to its portfolio companies. previously committed capital. Usually a
limited partner will agree to a maximum
Book – see Private placement Business plan – a document that investment amount and the general
memorandum. describes a new concept for a business partner will make a series of capital
opportunity. A business plan typically calls over time to the limited partner as
Bootstrapping – the actions of a startup includes the following sections: opportunities arise to finance startups
to minimize expenses and build cash flow, executive summary, market need, and buyouts.
thereby reducing or eliminating the need solution, technology, competition,
for outside investors. marketing, management, operations, Capital gap – the difficulty faced by some
exit strategy, and financials (including entrepreneurs in trying to raise between
Bp – see Basis point.
cash flow projections). For most venture $2 million and $5 million. Friends, family
Bridge financing – temporary funding capital funds, fewer than 10 of every and angel investors are typically good
that will eventually be replaced by 100 business plans eventually receive sources for financing rounds of less
permanent capital from equity investors funding. than $2 million, while many venture
or debt lenders. In venture capital, a capital funds have become so large
Buyout – a sector of the private equity that investments in this size range are
bridge is usually a short-term note (6 to
industry. Also, the purchase of a difficult.
12 months) that converts to preferred
controlling interest of a company by an
stock. Typically, the bridge lender has
outside investor using substantial debt Capitalization table (or cap table) – a
the right to convert the note to preferred
(in a leveraged buyout) or a management table showing the owners of a company’s
stock at a price that is a 20% to 25%
team (in a management buyout). shares and their ownership percentages
discount from the price of the preferred
as well as the debt holders. It also lists
stock in the next financing round. See Buy-sell agreement – a contract that the forms of ownership, such as common
Mezzanine and Wipeout bridge. sets forth the conditions under which stock, preferred stock, warrants, options,
a shareholder must first offer his or her senior debt, and subordinated debt.
Broad-based weighted average anti-
shares for sale to the other shareholders
dilution – A weighted average anti-
before being allowed to sell to entities Capital gains – a tax classification of
dilution method adjusts downward the
outside the company. investment earnings resulting from the
price per share of the preferred stock of
purchase and sale of assets. Typically, a
investor A due to the issuance of new
company’s investors and founders have
preferred shares to new investor B at
earnings classified as long term capital
a price lower than the price investor A
gains (held for a year or longer), which
originally received. Investor A’s preferred
are often taxed at a lower rate than
stock is repriced to a weighted average of
ordinary income.
48
Data provided by
Capital stock – a description of stock that Clawback – a clause in the agreement Control – the authority of an individual or
applies when there is only one class of between the general partner and the entity that owns more than 50% of equity
shares. This class is known as “common limited partners of a private equity in a company or owns the largest block of
stock”. fund. The clawback gives limited shares compared to other shareholders.
partners the right to reclaim a portion Control can also be granted through
Capital under management/Assets of disbursements to a general partner special voting rights and protective
under management – A frequently used for profitable investments based on provisions in a company’s organizing
metric for sizing total funds managed significant losses from later investments documents.
by a venture capital or private equity in a portfolio.
firm. In practice, there are several ways Consolidation – see Rollup.
of calculating this. In the US, this is the Closing – the conclusion of a financing
total committed capital for all funds round whereby all necessary legal Conversion – the right of an investor or
managed by a firm on which it collects documents are signed and capital has lender to force a company to replace the
management fees. This calculation been transferred. investor’s preferred shares or the lender’s
ignores whether portions of the debt with common shares at a preset
committed capital have not yet been Co-investment – the direct investment conversion ratio. A conversion feature
called and whether portions of the fund by a limited partner alongside a general was first used in railroad bonds in the
have been liquidated and distributed. It partner in a portfolio company. 1800s.
typically does not include aging funds in
Collateral – hard assets of the borrower, Convertible debt – a loan that allows
their “out years” on which fees are not
such as real estate or equipment, for the lender to exchange the debt for
being collected. For purposes of this book
which a lender has a legal interest until a common shares in a company at a
in calculating capital managed in figure
loan obligation is fully paid off. preset conversion ratio. Also known as a
1.04, because direct data is not available,
“convertible note.”
the last eight vintage years of capital Commitment – an obligation, typically the
commitments is considered a proxy maximum amount that a limited partner Convertible preferred stock – a type of
for the industry’s total capital under agrees to invest in a fund. See Capital stock that gives an owner the right to
management. call. convert preferred shares to common
shares of stock. Usually, preferred stock
Capped participating preferred stock Common stock – a type of security has certain rights that common stock
– preferred stock whose participating representing ownership rights in a doesn’t have, such as decision-making
feature is limited so that an investor company. Usually, company founders, management control, a promised return
cannot receive more than a specified management and employees own on investment (dividend), or senior
amount. See Participating preferred common stock while outside investors priority in receiving proceeds from a sale
stock. own preferred stock. In the event of a or liquidation of the company. Typically,
liquidation of the company, the claims convertible preferred stock automatically
Carried interest capital gains – the share
of secured and unsecured creditors, converts to common stock if the company
in the capital gains of a venture capital
bondholders and preferred stockholders makes an initial public offering (IPO).
fund which is allocated to the general
take precedence over common Convertible preferred is the most common
partner. Typically, a fund must return the
stockholders. See Preferred stock. tool for private equity funds to invest in
capital given to it by limited partners plus
any preferential rate of return before the companies.
Comparable – a private or public
general partner can share in the profits company with similar characteristics Co-sale right – a contractual right of an
of the fund. The general partner will to a private or public company investor to sell some of the investor’s
typically receive a 20% carried interest, that is being valued. For example, stock along with the founder’s or majority
although some successful firms receive a telecommunications equipment shareholder’s stock if either the founder
25%-30%. Also known as “carry” or manufacturer whose market value is or majority shareholder elects to sell
“promote.” 2x revenues can be used to estimate stock to a third-party. Also known as
the value of a similar and relatively new Tag-along right.
company with a new product in the same
industry. See Liquidity discount. Cost of capital – see weighted average
cost of capital (WACC).
49
Data provided by
Cost of revenue – the expenses Deal flow – a measure of the number of Discount rate – the interest rate used to
generated by the core operations potential investments that a fund reviews determine the present value of a series of
delivering the product or services of a in any given period. future cash flows.
company.
Defined benefit plan – a company Discounted cash flow (DCF) – a valuation
Covenant – a legal promise to do or retirement plan in which the benefits methodology whereby the present value
not do a certain thing. For example, are typically based on an employee’s of all future cash flows expected from a
in a financing arrangement, company salary and number of years worked. company or investment is calculated.
management may agree to a negative Fixed benefits are paid after the
covenant, whereby it promises not to employee retires. The employer bears Distressed debt – the bonds of a
incur additional debt. The penalties for the investment risk and is committed to company that is either in or approaching
violation of a covenant may vary from providing the benefits to the employee. bankruptcy. Some private equity funds
repairing the mistake to losing control of Defined benefit plan managers can invest specialize in purchasing such debt at
the company. in private equity funds. deep discounts with the expectation of
exerting influence in the restructuring of
Coverage ratio – describes a company’s Defined contribution plan – a company the company and then selling the debt
ability to pay debt from cash flow or retirement plan in which the employee once the company has meaningfully
profits. Typical measures are EBITDA/ elects to contribute some portion of his recovered.
interest, (EBITDA minus capital or her salary into a retirement plan, such
expenditures)/Interest, and EBIT/interest. as a 401(k) or 403(b). The employer may Distribution – the transfer of cash or
also contribute to the employee’s plan. securities to a limited partner resulting
Cram down round – a financing With this type of plan, the employee from the sale, liquidation or IPO of one
event upon which new investors with bears the investment risk. The benefits or more portfolio companies in which a
substantial capital are able to demand depend solely on the amount of money general partner chose to invest.
and receive contractual terms that made from investing the employee’s
effectively cause the issuance of Dividends – payments made by a
contributions.
sufficient new shares by the startup company to the owners of certain
company to significantly reduce (“dilute”) Demand rights – a type of registration securities.
the ownership percentage of previous right. Demand rights give an investor
Down round – a round of financing
investors. the right to force a startup to register its
whereby the valuation of the company
shares with the SEC and prepare for a
Cryptocurrency – a natively digital is lower than the value determined by
public sale of stock (IPO).
currency using encryption techniques to investors in an earlier round.
regulate the creation of units of currency Dilution – the reduction in the ownership
Drag-along rights – the contractual right
and verify transfer of funds. Usually percentage of current investors, founders
of an investor in a company to force all
created and managed independently of a and employees caused by the issuance
other investors to agree to a specific
central bank. of new shares (for example to investors
action, such as the sale of the company.
in follow on rounds, , employees by
Cumulative dividends – the owner increasing the stock option pool, debt Drawdown schedule – an estimate of the
of preferred stock with cumulative providers in the form or warrants, etc.). gradual transfer of committed investment
dividends has the right to receive accrued
funds from the limited partners of
(previously unpaid) dividends in full Dilution protection – see Anti-dilution
a private equity fund to the general
before dividends are paid to any other and Full ratchet.
partners.
classes of stock.
Direct secondary transaction – A
Due diligence – the investigatory process
Current ratio – the ratio of current assets transaction in which the buyer purchases
performed by investors to assess the
to current liabilities. shares of an operating company from an
viability of a potential investment and the
existing seller. While the transaction is a
Data room – a specific location where accuracy of the information provided by
secondary sale of shares, the transacted
potential buyers/investors can review the target company.
interest is a primary issue purchase
confidential information about a target directly into an operating company. Dutch auction – a method of conducting
company. This information may include Sellers are often venture capitalists an IPO whereby newly issued shares
detailed financial statements, client selling their ownership stake in a portfolio of stock are committed to the highest
contracts, intellectual property, property company. Buyers are often funds that bidder, then, if any shares remain, to the
leases, and compensation agreements. specialize in such investments. next highest bidder, and so on until all
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the shares are committed. Note that the Equity – the ownership structure of a using FCFE, the discount rate used is the
price per share paid by all buyers is the company represented by common shares, cost of equity.
price commitment of the buyer of the last preferred shares or unit interests. Equity
share. = assets – liabilities. Free cash flow to the firm (FCFF) – the
operating cash flow available after
Early stage – the state of a company ESOP – see Employee Stock Ownership operating expenses, taxes, reinvestment
after the seed (formation) stage but Program. needs and changes in working capital,
before middle stage (generating but before any interest payments on
revenues). Typically, a company in early Evergreen fund – a fund that reinvests its debt are made. In a discounted cash flow
stage will have a core management team profits in order to ensure the availability model to determine the enterprise value
and a proven concept or product, but no of capital for future investments. of a firm using FCFF, the discount rate
positive cash flow. used is the weighted average cost of
Exit strategy – the plan for generating
capital (WACC).
Earnings before interest and taxes (EBIT) profits for owners and investors of a
– a measurement of the operating profit company. Typically, the options are to Friends and family financing – capital
of a company. One possible valuation merge, be acquired or make an initial provided by the friends and family of
methodology is based on a comparison of public offering (IPO). An alternative is to founders of an early stage company.
private and public companies’ value as a recapitalize (relever the company and Friends and family financings may also
multiple of EBIT. then pay dividends to shareholders). include individual angel investors known
to or introduced to the founders. Friends
Earnings before interest, taxes, Expansion stage – the stage of a
and family financing rounds are typically
depreciation and amortization (EBITDA) company characterized by a complete
structured as notes convertible into a
– a measurement of the cash flow of management team and a substantial
Seed or Series A round of financing.
a company. One possible valuation increase in revenues.
Founders should be careful not to create
methodology is based on a comparison of an ownership structure that may hinder
Fair value – a financial reporting principle
private and public companies’ value as a the participation of professional investors
for valuing assets and liabilities, for
multiple of EBITDA. once the company begins to achieve
example, portfolio companies in venture
capital fund portfolios. In 2007, more success.
Earnout – an arrangement in which
sellers of a business receive additional defined rules took effect. See ASC Topic
Full ratchet – an anti-dilution protection
future payments, usually based on 820.
mechanism to protect earlier investors
financial performance metrics such as from dilution when a new round is
Fairness opinion – a letter issued by an
revenue or net income. raised at a lower price. In the case of
investment bank that charges a fee to
assess the fairness of a negotiated price a full ratchet for a Series A followed by
Elevator pitch – a concise presentation,
for a merger or acquisition. a Series B at a lower price per share,
lasting only a few minutes (an elevator
additional shares would be issued to
ride), by an entrepreneur to a potential
FAS 157 – See ASC Topic 820 entry. the Series A preferred investors so that
investor about an investment opportunity.
their resulting cost per share is equal to
First refusal – the right of a privately
Employee Stock Ownership Program the price per share paid by the Series B
owned company to purchase any shares
(ESOP) – a plan established by preferred investors. Often as a result of
that employees would like to sell before
a company to reserve shares for the implementation of a ratchet, company
they are offered to outside buyers
employees. management and employees who own
Founders stock – nominally priced a fixed amount of common shares suffer
Entrepreneur – an individual who starts significant dilution. See Narrow-based
common stock issued to founders,
his or her own business. weighted average anti-dilution and
officers, employees, directors, and
consultants. Broad-based weighted average anti-
Entrepreneurship – the application of
dilution.
innovative leadership to limited resources
Free cash flow to equity (FCFE) – the
in order to create exceptional value. Fully diluted basis – a methodology
cash flow available after operating
expenses, interest payments on debt, for calculating any per-share ratios
Enterprise value (EV) – the sum of the
taxes, net principal repayments, whereby the denominator is the total
market values of the common stock and
preferred stock dividends, reinvestment number of shares, both preferred and
long-term debt of a company, minus
needs and changes in working capital. common, issued by the company on the
excess cash.
In a discounted cash flow model to assumption that all warrants and options
determine the value of the equity of a firm are exercised.
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Data provided by
Fund-of-funds – a fund created to invest in Hart-Scott-Rodino (HSR) Act – a law Hurdle rate – a minimum rate of return
other funds (e.g. VC funds, PE funds, etc.). requiring entities that acquire certain required before an investor will make an
Typically, individual investors and relatively amounts of stock or assets of a company investment.
small institutional investors participate in to inform the Federal Trade Commission
a fund-of-funds to minimize their portfolio and the Department of Justice and Incorporation – the process by which
management efforts and leverage the size to observe a waiting period before a business receives a state charter,
and scale of the fund-of-funds. completing the transaction to allow the allowing it to become a corporation.
agencies to assess whether there will be Many corporations choose Delaware
Gatekeepers – intermediaries which any anti-competitive implications as a because its laws are business-friendly
endowments, pension funds and other result of the transaction. and up-to-date.
institutional investors use as advisors
regarding private equity investments. Hedge fund – an investment fund that Incubator – a company or facility
has the ability to use leverage, take short designed to host startup companies.
General partner (GP) – a class of partner positions in securities, or use a variety of Incubators help startups grow while
in a partnership. The general partner derivative instruments in order to achieve controlling costs by offering networks
retains liability for the actions of the a return that is relatively less correlated of contacts and shared back office
partnership. Historically, venture capital to the performance of typical indices resources.
and buyout funds have been structured (such as the S&P 500) than traditional
as limited partnerships, with the venture Indenture – the terms and conditions
long-only funds. Hedge fund managers
firm as the GP and limited partners between a bond issuer and bond buyers.
are typically compensated based on
(LPs) being the institutional and high net assets under management as well as Initial Coin Offering (ICO) – An offering of
worth investors that provide most of the fund performance. units of a new cryptocurrency or crypto-
capital in the partnership. The GP earns
token, usually in exchange for existing
a management fee and a percentage of High-yield debt – debt issued via public
cryptocurrencies like Bitcoin or Ether, as
gains (see Carried interest). offering or public placement (Rule 144A)
a presale against a future blockchain
that is rated below investment grade
GP – see General partner. project, i.e., the new coins or tokens sold
by S&P or Moody’s. This means that the
will be the “currency” for transactions in a
debt is rated below the top four rating
GP for hire – In a spin-out or a synthetic new or future blockchain project.
categories (i.e. S&P BB+, Moody’s Ba2 or
secondary, a GP for hire refers to the
below). The lower rating is indicative of Initial public offering (IPO) – the first
professional investor who may be hired
higher risk of default, and therefore the offering of stock by a company to the
by a purchasing firm to manage the new
debt carries a higher coupon or yield than public. New public offerings must be
fund created from the orphaned assets
investment grade debt. Also referred to as registered with the Securities and
purchased. In past cases, the GP has
Junk bonds or Sub-investment grade debt. Exchange Commission. An IPO is one
often expanded its role to fundraise for
and run new funds alongside the initial of the methods that a startup that has
Hockey stick – the general shape and
fund. achieved significant success can use
form of a chart showing revenue,
to raise additional capital for further
customers, cash or some other financial
Going-private transaction – when a growth. See Qualified IPO.
or operational measure that increases
public company chooses to pay off all
dramatically at some point in the future. In-kind distribution – a distribution to
public investors, delist from all stock
Entrepreneurs often develop business limited partners of a private equity fund
exchanges, and become owned by
plans with hockey stick charts to impress that is in the form of publicly traded
management, employees, and select
potential investors. shares rather than cash.
private investors.
Holding period – amount of time an Inside round – a round of financing
Golden handcuffs – financial incentives
investment remains in a portfolio. in which the investors are the same
that discourage founders and/or
important employees from leaving a investors as the previous round. An
Hot issue – stock in an initial public
company before a predetermined date or inside round raises liability issues since
offering that is in high demand.
important milestone. the valuation of the company has no
Hot money – capital from investors that third-party verification in the form of an
Growth stage – the stage of a company have no tolerance for lack of results outside investor. In addition, the terms
when it has received one or more rounds by the investment manager and move of the inside round may be considered
of financing and is generating revenue quickly to withdraw at the first sign of self-dealing if they are onerous to any set
from its product or service. Also known trouble. of shareholders or if the investors give
as “middle stage.” themselves additional preferential rights.
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Institutional investor – professional significant revenues compared to its Leverage ratios – measurements of a
entities that invest capital on behalf competition, and is approaching cash company’s debt as a multiple of cash
of companies or individuals. Examples flow break even or positive net income. flow. Typical leverage ratios include total
include pension plans, insurance Typically, a later stage company is about debt/EBITDA, total debt/(EBITDA minus
companies and university endowments. 6 to 12 months away from a liquidity capex), and senior debt/EBITDA.
event such as an IPO or buyout. The
Intellectual property (IP) – knowledge, rate of return for venture capitalists that L.I.B.O.R. or LIBOR – see The London
techniques, writings and images that are invest in later stage, less-risky ventures is Interbank Offered Rate.
intangible but often protected by law via lower than in earlier stage ventures.
patents, copyrights, and trademarks. License – a contract in which a patent
LBO – see Leveraged buyout. owner grants to a company the right
Interest coverage ratio – earnings to make, use or sell an invention
before interest and taxes (EBIT) divided Lead investor – the outside investor under certain circumstances and for
by interest expense. This is a key ratio that makes the largest investment compensation.
used by lenders to assess the ability of in a financing round and manages
a company to produce sufficient cash to the documentation and closing of Limited liability company (LLC) – an
service its debt obligation. that round. The lead investor sets the ownership structure designed to limit the
price per share of the financing round, founders’ losses to the amount of their
Internal rate of return (IRR) – the interest thereby determining the valuation of the investment. An LLC itself does not pay
rate at which a certain amount of capital company. taxes, rather its owners pay taxes on
today would have to be invested in order their proportion of the LLC profits at their
to grow to a specific value at a specific Letter of intent – a document confirming individual tax rates.
time in the future. the intent of an investor to participate
in a round of financing for a company. Limited partnership – a legal entity
Investment thesis/investment philosophy By signing this document, the subject composed of a general partner and
– the fundamental ideas which determine company agrees to begin the legal and various limited partners. The general
the types of investments that an due diligence process prior to the closing partner manages the investments and is
investment fund will choose in order to of the transaction. Also known as a “Term liable for the actions of the partnership
achieve its financial goals. Sheet”. while the limited partners are generally
protected from legal actions and any
IPEV – Stands for International Private Leverage – the use of debt to acquire losses beyond their original investment.
Equity Valuation guidelines group. This assets, build operations and increase The general partner collects a
group is made up of representatives revenues. By using debt, a company is management fee and earns a percentage
of the international and US venture attempting to achieve results faster than of capital gains (see Carried interest),
capital industry and has published if it only used its cash available from pre- while the limited partners receive income,
guidelines for applying US GAAP and leverage operations. The risk is that the capital gains and tax benefits.
international IFRS valuation rules. See increase in assets and revenues does not
www.privateequityvaluation.com. generate sufficient net income and cash Limited partner (LP) – an investor in a
Widely regarded in the US as the global flow to pay the interest costs of the debt. limited partnership. The general partner
successor to the US-focused PEIGG is liable for the actions of the partnership
group. Leveraged buyout (LBO) – the purchase while the limited partners are generally
of a company or a business unit of a protected from legal actions and any
IPO – see Initial public offering. company by an outside investor using losses beyond their original investment.
mostly borrowed capital. The limited partner receives income,
IRR – see Internal rate of return.
capital gains and tax benefits.
Leveraged recapitalization – the
J-curve – a concept that during the
reorganization of a company’s capital Liquidation – the sale of a company. This
first few years of a private equity fund,
structure resulting in more debt added to may occur in the context of an acquisition
cash flow or returns are negative due to
the balance sheet. Private equity funds by a larger company or in the context of
investments, losses, and expenses, but
can recapitalize a portfolio company selling off all assets prior to cessation
as investments produce results the cash
and then direct the company to issue a of operations (Chapter 7 bankruptcy). In
flow or returns trend upward. A graph of
one-time dividend to equity investors. a liquidation, the claims of secured and
cash flow or returns versus time would
This is often done when the company is unsecured creditors, bondholders and
then resemble the letter “J”.
performing well financially and the debt preferred stockholders take precedence
Later stage – the state of a company markets are expanding. over common stockholders.
that has proven its concept, achieved
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Data provided by
Liquidation preference – the contractual equity fund usually range from 0.75% of investor A (by issuing new additional
right of an investor to priority in receiving to 3% of capital under management, shares) due to the issuance of new
the proceeds from the liquidation of depending on the type and size of fund. preferred shares to new investor B at
a company. For example, a venture For venture capital funds, 2% is typical. a price lower than the price investor A
capital investor with a “2x liquidation originally received. Investor A is issued
preference” has the right to receive Management rights – the rights often enough preferred stock to replicate a
two times its original investment upon required by a venture capitalist as weighted average of investor A’s price
liquidation before other more junior part of the agreement to invest in a and investor B’s price. A narrow-based
forms of equity share in the liquidation company. The venture capitalist has anti-dilution uses only common stock
proceeds. the right to consult with management outstanding in the denominator of
on key operational issues, attend board the formula for determining the new
Liquidity discount – a decrease in the meetings and review information about weighted average price.
value of a private company compared to the company’s financial situation.
the value of a similar but publicly traded National Venture Capital Association
company. Since an investor in a private Market capitalization – the value of a (NVCA) – the trade organization that
company cannot readily sell his or her publicly traded company as determined empowers the next generation of
investment, the shares in the private by multiplying the number of shares American companies that will fuel the
company must be valued less than a outstanding by the current price per economy of tomorrow. As the voice
comparable public company. share. of the US venture capital and startup
community, NVCA advocates for public
Liquidity event – a transaction whereby MBO – see Management buyout.
policy that supports the American
owners of a significant portion of the entrepreneurial ecosystem. Serving the
Mezzanine – a layer of financing that
shares of a private company sell their venture community as the preeminent
has intermediate priority (seniority) in
shares in exchange for cash, in the trade association, NVCA arms the
the capital structure of a company. For
case of an IPO or cash-based M&A venture community for success, serving
example, mezzanine debt has lower
transaction, or shares of an acquiring as the leading resource for venture
priority than senior debt but usually has
company. capital data, practical education, peer-led
a higher interest rate and often includes
warrants. In venture capital, a mezzanine initiatives, and networking
Lock-up agreement – investors,
management and employees often agree round is generally the round of financing
NDA – see Non-disclosure agreement.
not to sell their shares for a specific that is designed to help a company have
time period after an IPO, usually six to enough resources to reach an IPO. See Non-cumulative dividends – dividends
12 months. By avoiding large sales of Bridge financing. that are payable to owners of preferred
its stock, the company has time to build stock at a specific point in time only if
Multiples – a valuation methodology that
interest among potential buyers of its there is sufficient cash flow available
compares public and private companies
shares. after all company expenses have been
in terms of a ratio of value to an
paid. If cash flow is insufficient, the
London Interbank Offered Rate operations figure such as revenue or net
owners of the preferred stock will not
(L.I.B.O.R. or LIBOR) – the average rate income. For example, if several publicly
receive the dividends owed for that time
charged by large banks in London for traded computer hardware companies
period and will have to wait until the
loans to each other. LIBOR is a relatively are valued at approximately 2x revenues,
board of directors declares another set of
volatile rate and is typically quoted in then it is reasonable to assume that a
dividends.
maturities of one month, three months, startup computer hardware company
six months and one year. that is growing fast has the potential to Non-disclosure agreement (NDA) – an
achieve a valuation of 2x its revenues. agreement issued by entrepreneurs to
Management buyout (MBO) – a Before the startup company issues its protect the privacy of their ideas when
leveraged buyout controlled by the IPO, it will likely be valued at less than 2x disclosing those ideas to third parties.
members of the management team of a revenue because of the lack of liquidity of
company or a division. Often an MBO is its shares. See Liquidity discount. Non-interference – an agreement often
conducted in partnership with a buyout signed by employees and management
fund. Narrow-based weighted average whereby they agree not to interfere
anti-dilution – a type of anti-dilution with the company’s relationships with
Management fee – a fee charged to the mechanism. A weighted average anti- employees, clients, suppliers and sub-
limited partners in a fund by the general dilution method adjusts downward the contractors within a certain time period
partner. Management fees in a private price per share of the preferred stock after termination of employment.
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Data provided by
No-shop clause – a section of an Participating dividends – the right of Post-money valuation – the valuation of
agreement to purchase or invest in a holders of certain preferred stock to a company including the capital provided
company whereby the seller agrees not receive dividends and participate in by the current round of financing. For
to market the company to other potential additional distributions of cash, stock or example, a venture capitalist may
buyers or investors for a specific time other assets. invest $5 million in a company valued
period. at $2 million “pre-money” (before the
Participating preferred stock – a unit investment was made). As a result, the
Non-solicitation – an agreement often of ownership composed of preferred startup will have a post-money valuation
signed by employees and management stock and common stock. The preferred of $7 million.
whereby they agree not to solicit other stock entitles the owner to receive a
employees of the company regarding job predetermined sum of cash (usually PPM – see Private placement memorandum.
opportunities. the original investment plus accrued
dividends) if the company is sold or has Preemptive rights – the rights of
NVCA – see National Venture Capital an IPO. The common stock represents shareholders to maintain their
Association. additional continued ownership in the percentage ownership of a company by
company. buying shares sold by the company in
Offering memorandum – a legal future financing rounds.
document that provides details of an PEIGG – acronym for Private Equity
investment to potential investors. See Industry Guidelines Group, an ad hoc Preference – seniority, usually with
Private placement memorandum. group of individuals and firms involved respect to dividends and proceeds from a
in the private equity industry for the sale or dissolution of a company.
Operating cash flow – the cash flow
purpose of establishing valuation
produced from the operation of a Preferred return – a minimum return per
and reporting guidelines. With the
business, not from investing activities annum that must be generated for limited
implementation of FAS 157 in 2007, the
(such as selling assets) or financing partners of a private equity fund before
group’s mission was essentially complete.
activities (such as issuing debt). the general partner can begin receiving a
Several of its members then joined
Calculated as net operating income (NOI) percentage of profits from investments.
IPEV, which is viewed by US VCs as the
plus depreciation.
international successor to PEIGG. Preferred stock – a type of stock that
Option pool – a group of options set aside has certain rights that common stock
Piggyback rights – rights of an investor
for long-term, phased compensation to does not have. These special rights may
to have his or her shares included in
management and employees. include dividends, participation, liquidity
a registration of a startup’s shares in
preference, anti-dilution protection and
Outstanding shares – the total amount preparation for an IPO.
veto provisions, among others. Private
of common shares of a company, not equity investors usually purchase
PIK dividend – a dividend paid to the
including treasury stock, convertible preferred stock when they make
holder of a stock, usually preferred stock,
preferred stock, warrants and options. investments in companies.
in the form of additional stock rather than
Pay to play – a clause in a financing cash. PIK refers to payment in kind.
Pre-money valuation – the valuation of
agreement whereby any investor that a company prior to the current round
PIPEs – see Private investment in public
does not participate in a future round of financing. For example, a venture
equity.
agrees to suffer significant dilution capitalist may invest $5 million in a
compared to other investors. The most Placement agent – a company that company valued at $2 million pre-money.
onerous version of “pay to play” is specializes in finding institutional As a result, the startup will have a “pre-
automatic conversion to common shares, investors that are willing and able money” valuation of $2 million.
which in essence ends any preferential to invest in a private equity fund.
rights of an investor. Sometimes a private equity fund will hire Primary shares – shares sold by
a placement agent so the fund partners a corporation (not by individual
Pari passu – a legal term referring to the shareholders).
can focus on making and managing
equal treatment of two or more parties
investments in companies rather than on
in an agreement. For example, a venture American Investment Council (AIC) – an
raising capital.
capitalist may agree to have registration advocacy, communications and research
rights that are pari passu with the other Portfolio company – a company that has organization for the private equity
investors in a financing round. received an investment from a private industry in the United States. Previously
equity fund. known as Private Equity Growth Capital
Council (PEGCC).
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Data provided by
Private equity – equity investments in that demonstrate consistent results over average total assets.
non-public companies, usually defined as time, placing in the upper quartile of the
being made up of venture capital, growth investment results for all funds. Rights offering – an offering of stock to
equity and buyout funds. Real estate, oil current shareholders that entitles them to
and gas, and other such partnerships are Realization ratio – the ratio of cumulative purchase the new issue.
sometimes included in the definition. distributions to paid-in capital. The
realization ratio is used as a measure of Rights of co-sale with founders – a
Private investment in public equity the distributions from investment results clause in venture capital investment
(PIPEs) – investments by a private equity of a private equity partnership compared agreements that allows the VC fund to
fund in a publicly traded company, to the capital under management. sell shares at the same time that the
usually at a discount and in the form of founders of a startup choose to sell.
preferred stock. Recapitalization – the reorganization of a
company’s capital structure. Risk-free rate – a term used in finance
Private placement – the sale of a theory to describe the return from
security directly to a limited number of Red herring – a preliminary prospectus investing in a riskless security. In practice,
institutional and qualified individual filed with the Securities and Exchange this is often taken to be the return on US
investors. If structured correctly, a private Commission and containing the details Treasury Bills.
placement avoids registration with the of an IPO offering. The name refers to
the disclosure warning printed in red Road show – presentations made in
Securities and Exchange Commission.
letters on the cover of each preliminary several cities to potential investors and
Private placement memorandum (PPM) prospectus advising potential investors of other interested parties. For example, a
– a document explaining the details of the risks involved. company will often make a road show
an investment to potential investors. to generate interest among institutional
For example, a private equity fund will Redemption rights – the right of an investors prior to its IPO.
issue a PPM when it is raising capital investor to force the startup company to
buy back the shares issued as a result of ROI – see Return on investment.
from institutional investors. Also, a
startup may issue a PPM when it needs the investment. In effect, the investor has
Rollup – the purchase of relatively smaller
growth capital. Also known as “Offering the right to take back his/her investment
companies in a sector by a rapidly
Memorandum”. and may even negotiate a right to receive
growing company in the same sector. The
an additional sum in excess of the original
strategy is to create economies of scale.
Private securities – securities that are investment.
For example, the movie theater industry
not registered with the Securities and
Registration – the process whereby underwent significant consolidation via
Exchange Commission and do not trade
shares of a company are registered with rollups in the 1960’s and 1970’s.
on any exchanges. The price per share
is negotiated between the buyer and the the Securities and Exchange Commission
Round – a financing event usually
seller (the “issuer”). under the Securities Act of 1933 in
involving several private equity investors.
preparation for a sale of the shares to the
Qualified IPO – a public offering of public. Royalties – payments made to patent or
securities valued at or above a total copyright owners in exchange for the use
amount specified in a financing Regulation D – Often referred to as
of their intellectual property.
agreement. This amount is usually simply “Reg D,” an SEC regulation that
specified to be sufficiently large to governs private placements. Private Rule 144 – a rule of the Securities and
guarantee that the IPO shares will trade placements are investment offerings for Exchange Commission that specifies the
in a major exchange (NASDAQ or New institutional and accredited individual conditions under which the holder of shares
York Stock Exchange). Usually upon a investors, but not the general public. acquired in a private transaction may sell
qualified IPO preferred stock is forced to those shares in the public markets.
Restricted shares – shares that cannot be
convert to common stock.
traded in the public markets. S corporation – an ownership structure
Quartile – one fourth of the data points in that limits its number of owners to 100.
Return on investment (ROI) – the
a data set. Often, private equity investors An S corporation does not pay taxes,
proceeds from an investment, during
are measured by the results of their rather its owners pay taxes on their
a specific time period, calculated as a
investments during a particular period proportion of the corporation’s profits at
percentage of the original investment.
of time. Institutional investors often their individual tax rates.
Also, net profit after taxes divided by
prefer to invest in private equity funds
SBIC – see Small Business Investment
Company.
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Scalability – a characteristic of a new and family financing. Seed rounds can options are commonly used as long term
business concept that entails the growth be priced rounds or can be structured incentive compensation for employees
of sales and revenues with a much slower as notes convertible into a “Series A” and management of fast growth
growth of organizational complexity and financing round. The Seed round is now companies.
expenses. Venture capitalists look for typically the first “institutional” financing
scalability in the startups they select to of a company. The size of Seed rounds in Strategic investor – a relatively large
finance. recent years has grown in recent years to corporation that agrees to invest in a
resemble what formerly would have been young or a smaller company in order to
Scale-down – a schedule for phased a small “Series A” round. have access to its proprietary technology,
decreases in management fees for product or service.
general partners in a limited partnership Seed stage – the state of a company
as the fund reduces its investment when it has just been incorporated and Subordinated debt – a loan that has a
activities toward the end of its term. its founders are developing their product lower priority than a senior loan in case
or service. of a liquidation of the asset or company.
Scale-up – the process of a company Also known as “junior debt”.
growing quickly while maintaining Senior debt – a loan that has a higher
operational and financial controls in place. priority in case of a liquidation of the Sweat equity – ownership of shares in a
Also, a schedule for phased increases in asset or company. company resulting primarily from work
management fees for general partners in rather than investment of capital.
a limited partnership as the fund increases Seniority – higher priority.
Syndicate – a group of investors that
its investment activities over time.
Series A preferred stock – preferred agree to participate in a round of funding
Secondary market – a market for the sale stock issued by a fast growth company for a company. Alternatively, a syndicate
of limited partnership interests in private in exchange for capital from investors in can refer to a group of investment banks
equity funds. Sometimes limited partners the “A” round of financing. This preferred that agree to participate in the sale of
chose to sell their interest in a partnership, stock is usually convertible to common stock to the public as part of an IPO.
typically to raise cash or because they shares upon an IPO.
Synthetic secondary – A popular method of
cannot meet their obligation to invest
Shareholder agreement – a contract that completing a direct secondary transaction
more capital according to the takedown
sets out the basis on which the company in which the buyer becomes a limited
schedule. Certain investment companies
will be operated and the shareholders’ partner (LP) in a special purpose vehicle
specialize in buying these partnership
rights and obligations. It provides rights (SPV) or similar entity which has been
interests at a discount.
and privileges to preferred and major set up out of the underlying investments
Secondary shares – shares sold by a shareholders and protections to minority in order to create a limited partnership
shareholder (not by the corporation). shareholders. interest. The term arose because of the
synthetic nature of the direct purchase
Securities and Exchange Commission Sharpe Ratio – a method of calculating through the LP secondary transaction.
(SEC) – the regulatory body that enforces the risk-adjusted return of an investment.
federal securities laws such as the The Sharpe Ratio is calculated by Tag-along right – the right of a minority
Securities Act of 1933 and the Securities subtracting the risk-free rate from the investor to receive the same benefits
Exchange Act of 1934. return on a specific investment for as a majority investor. Usually applies
a time period (usually one year) and to a sale of securities by investors. Also
Seed capital – investment provided by then dividing the resulting figure by known as co-sale right.
professional seed funds, angels and the standard deviation of the historical
angel groups, and friends and family (annual) returns for that investment. The Takedown – a schedule of the transfer
of the founders of a startup in the seed higher the Sharpe Ratio, the better. of capital in phases in order to complete
stage of its development. a commitment of funds. Typically, a
Small Business Investment Company takedown is used by a general partner of
Seed round (“Series Seed”) - a financing (SBIC) – a company licensed by the a private equity fund to plan the transfer
event whereby angels, angel groups, Small Business Administration to receive of capital from the limited partners.
professionally managed Seed funds, government capital in the form of debt or
and early stage venture capital funds equity for use in private equity investing. Tender offer – an offer to public
become involved in a young start-up shareholders of a company to purchase
company that was previously financed Stock option – a right to purchase or sell their shares.
by founders, their friends and family, and a share of stock at a specific price within
individual angel investors in a friends a specific period of time. Stock purchase
57
Data provided by
Term loan – a bank loan for a specific representing the fact that venture Weighted average cost of capital
period of time, usually up to ten years in capitalists must achieve significant (WACC) – the average of the cost of
leveraged buyout structures. returns on investment in order to equity and the after-tax cost of debt.
compensate for the risks they take in This average is determined using weight
Term sheet – a document confirming funding unproven companies. factors based on the ratio of equity to
the intent of an investor to participate debt plus equity and the ratio of debt to
in a round of financing for a company. Venture Monitor – Officially known as debt plus equity.
By signing this document, the subject the PitchBook-National Venture Capital
company agrees to begin the legal and Association (NVCA) Venture Monitor. Weighted average anti-dilution – an
due diligence process prior to the closing Jointly produced by PitchBook and NVCA, anti-dilution protection mechanism
of the transaction. Also known as “Letter it serves as the authoritative quarterly whereby the conversion rate of preferred
of Intent”. report on venture capital activity in the stock is adjusted in order to reduce an
entrepreneurial ecosystem. The Venture investor’s loss due to an increase in the
Tranche – a portion of a set of securities. Monitor provides a complete look at number of shares in a company. Without
Each tranche may have different rights or venture capital activity, reporting on anti-dilution protection, an investor
risk characteristics. When venture capital fundraising, investments, exits and would suffer from a reduction of his
firms finance a company, a round may other relevant industry analysis in one or her percentage ownership. Usually
be disbursed in two or three tranches, comprehensive report each quarter. as a result of the implementation of a
each of which is paid when the company weighted average anti-dilution, company
attains one or more milestones. Vesting – a schedule by which employees management and employees who own
gain ownership over time of a previously a fixed amount of common shares suffer
Turnaround – a process performed at agreed upon amount of retirement significant dilution, but not as badly as in
a struggling company resulting in a funding or stock options. the case of a full ratchet.
substantial increase in a company’s
revenues, profits and reputation. Vintage – the year that a private equity Write-down – a decrease in the reported
fund begins making investments. Venture value of an asset or a company.
Underwater option – an option is said to funds are generally benchmarked to
be under water if the current fair market funds of the same vintage year. Write-off – a decrease in the reported
value of a stock is less than the option value of an asset or a company to zero.
exercise price. Voting rights – the rights of holders
of preferred and common stock in a Write-up – an increase in the reported
Underwriter – an investment bank that company to vote on certain acts affecting value of an asset or a company.
chooses to be responsible for the process the company. These matters may include
of selling new securities to the public. payment of dividends, issuance of a new Zombie – a company that has received
An underwriter usually chooses to work class of stock, mergers or liquidation. capital from investors but has only
with a syndicate of investment banks in generated sufficient revenues and cash
order to maximize the distribution of the Warrant – a security which gives the flow to maintain its operations without
securities. holder the right to purchase shares in a significant growth. Sometimes referred
company at a pre-determined price. A to as “walking dead.” Typically, a venture
Venture capital – a segment of the private warrant is a long-term option, usually capitalist has to make a difficult decision
equity industry which focuses on investing valid for several years or indefinitely. as to whether to liquidate a zombie or
in new companies with high growth Typically, warrants are issued continue to invest funds in the hopes that
potential and accompanying high risk. concurrently with preferred stocks or the zombie will become a winner.
bonds in order to increase the appeal of
Venture capital method – a pricing
the stocks or bonds to potential investors.
valuation method whereby an estimate
of the future value of a company is Washout round – a financing round
discounted by a certain interest rate whereby previous investors, the founders
and adjusted for future anticipated and management suffer significant
dilution in order to determine the current dilution. Usually as a result of a washout
value. Usually, discount rates for the round, the new investor gains majority
venture capital method are considerably ownership and control of the company.
higher than public stock return rates,
58
Data provided by
Data Methodology
Fundraising corporate venture firms, and corporate
investors. Investments received as part of
Early-stage: Rounds are generally
classified as Series A or B (which we
We define VC funds as pools of capital an accelerator program are not included, typically aggregate together as early
raised for the purpose of investing in the however, if the accelerator continues to stage) either by the series of stock issued
equity of startup companies. In addition invest in follow-on rounds, those further in the financing or, if that information
to funds raised by traditional VC firms, financings are included. All financings are is unavailable, by a series of factors
PitchBook also includes funds raised by of companies headquartered in the US. including: the age of the company, prior
any institution with the primary intent financing history, company status,
stated above. Funds identifying as Stage Definitions participating investors, and more.
growth-stage vehicles are classified as PE
We include equity investments into Late-stage: Rounds are generally
funds and are not included in this report.
startup companies from an outside classified as Series C or D or later (which
A fund’s location is determined by the
source. Investment does not necessarily we typically aggregate together as late
country in which the fund is domiciled; if
have to be taken from an institutional stage) either by the series of stock issued
that information is not explicitly known,
investor. This can include investment in the financing or, if that information
the HQ country of the fund’s general
from individual angel investors, angel is unavailable, by a series of factors
partner is used. Only funds based in the
groups, seed funds, VC firms, corporate including: the age of the company, prior
United States that have held their final
venture firms, corporate investors and financing history, company status,
close are included in the fundraising
institutions, among others. Investments participating investors, and more.
numbers. The entirety of a fund’s
received as part of an accelerator
committed capital is attributed to the year Nontraditional investors: “CVC” includes
program are not included; however, if the
of the final close of the fund. Interim close rounds executed by established CVC
accelerator continues to invest in follow-
amounts are not recorded in the year of arms as well as direct equity investments
on rounds, those further financings are
the interim close. by corporations into VC-backed
included. All financings are of companies
companies. “PE” includes VC deals by
Deals headquartered in the US, with any
reference to “metro” defined as the
investors whose primary classification is
PE/buyout, growth, mezzanine or other
We include equity investments into metropolitan statistical area (MSA). We
private equity.
startup companies from an outside include deals that include partial debt
source. Investment does not necessarily and equity.
have to be taken from an institutional
Angel & seed: We define financings as
investor. This can include investment
angel rounds if there are no PE or VC Exits
from individual angel investors, angel
firms involved in the company to date
groups, seed funds, venture capital firms, We include the first majority liquidity
and we cannot determine if any PE or
corporate venture firms, and corporate event for holders of equity securities of
VC firms are participating. In addition, if
investors. Investments received as part of venture-backed companies. This includes
there is a press release that states the
an accelerator program are not included, events where there is a public market
round is an angel round, it is classified
however, if the accelerator continues to for the shares (IPO) or the acquisition of
as such. Finally, if a news story or press
invest in follow-on rounds, those further majority of the equity by another entity
release only mentions individuals making
financings are included. All financings are (corporate or financial acquisition). This
investments in a financing, it is also
of companies headquartered in the US. does not include secondary sales, further
classified as angel. As for seed, when the
sales after the initial liquidity event, or
We include equity investments into investors and/or press release state that
bankruptcies. M&A value is based on
startup companies from an outside a round is a seed financing, or it is for
reported or disclosed figures, with no
source. Investment does not necessarily less than $500,000 and is the first round
estimation used to assess the value of
have to be taken from an institutional as reported by a government filing, it is
transactions for which the actual deal
investor. This can include investment classified as such. If angels are the only
size is unknown. IPO value is based on
from individual angel investors, angel investors, then a round is only marked as
the pre-money valuation of the company
groups, seed funds, venture capital firms, seed if it is explicitly stated.
at its IPO price.
59
Data provided by
Geographic
Definitions
US regions
Great Lakes: South:
West Coast: Arkansas, Kentucky, Louisiana,
Illinois, Indiana, Michigan, Minnesota,
Alaska, California, Hawaii, Oregon, Oklahoma, Tennessee, Texas
Ohio, Wisconsin
Washington
New England: Southeast:
Mountain: Alabama, Florida, Georgia, Mississippi,
Connecticut, Maine, Massachusetts, New
Arizona, Colorado, Idaho, Montana, North Carolina, Puerto Rico, South
Hampshire, Rhode Island, Vermont
Nevada, New Mexico, Utah, Wyoming Carolina
Mid-Atlantic:
Midwest:
Delaware, D.C., Maryland, New Jersey,
Iowa, Kansas, Missouri, Nebraska, North
New York, Pennsylvania, Virginia, West
Dakota, South Dakota
Virginia
West New
England
Midwest
Great lakes Mid-atlantic
Mountain
South Southeast
60
Data provided by
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
Forestry Other
Consumer Goods &
Restaurants, Hotels and Leisure
Recreation Metals, Minerals and Mining Other
Consumer Goods &
Retail Textiles Other
Recreation
Energy Equipment Energy Other Materials Other
Exploration, Production and Refining Energy Utilities Other
Energy Services Energy Other Energy Other
Healthcare Devices and Supplies HC Devices & Supplies Capital Markets/Institutions Other
Healthcare Services HC Services & Systems Commercial Banks Other
Healthcare Technology Systems HC Services & Systems Insurance Other
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.
61
Data provided by
1 Business Products & Services 1.1.7 Other Commercial Products Ex: Environmental Quality Management,
Waste Management, Allied Waste
1.1 Commercial Products 1.2 Commercial Services Industries
1.1.1 Aerospace and Defense - 1.2.1 Accounting, Audit and Tax Services 1.2.7 Human Capital Services - Providers
Manufacturers of equipment, parts - Providers of accounting, audit, and tax of human resource and employment
or products related to civil or military services to managers, investors, and tax services. Includes recruitment, training,
aerospace and defense. Includes aircraft authorities. and career development, among others.
parts, firearms, and other munitions.
Ex: PricewaterhouseCoopers, Ernst and Ex: Monster Worldwide, Vault.com, Robert
Ex: Boeing, Lockheed Martin, Northrop Young, KPMG, Deloitte Half Finance and Accounting
Grumman
1.2.2 BPO/Outsource Services - Providers 1.2.8 Legal Services - Providers of
1.1.2 Building Products - Manufacturers of business process outsourcing (BPO) corporate legal services. Includes contract
and distributors of home improvement services. BPO is the transmission of law, tax law, securities law, intellectual
and construction products and equipment. processes and operational activities property rights, and zoning law, among
Includes drills, saws, windows, doors, and to a third party for the purpose of cost others.
other prefabricated building materials, reduction, productivity growth, and
among others. innovative capabilities. Ex: DLA Piper, Goodwin Procter, White
and Case
Ex: USG, Elk Corporation, Fastenal Company Ex: Accenture, Sitel, ARAMARK
1.2.9 Logistics - Providers of supply
1.1.3 Distributors/Wholesale - Companies 1.2.3 Construction and Engineering - chain management and logistical
engaged in the sale of bulk goods for Companies engaged in large scale or non- support. Includes inventory management,
resale by a retailer. The goods are sold residential construction. Includes building purchasing, organizing transportation,
to industrial, commercial, institutional, or construction, heavy/highway construction, and warehousing, among others.
other entities. industrial construction, architecture, and
civil engineering, among others. Ex: Penske Logistics, United Parcel
Ex: Ferguson Enterprises, W.W. Grainger, Service, Expeditors International
Hughes Supply Ex: Turner Construction, Skanska,
Tishman Construction 1.2.10 Media and Information Services
1.1.4 Electrical Equipment - Manufacturers - Providers of media and information
of electrical equipment and components. 1.2.4 Consulting Services - Providers of services to businesses. Includes
Includes a broad range of electrical specialized consulting services to improve companies engaged in trade shows,
devices, electrical components, power- a company’s performance. Includes marketing, branding, conducting surveys,
generating equipment, and other large environmental consulting, human resource market analysis, and audience data
electrical systems, among others. consulting, management consulting, interpretations, among others. This
strategic consulting, and political includes online marketplaces.
Ex: AO Smith, Exide Technologies, Zoltek consulting, among others.
Companies Ex: Arbitron, DST Systems, Interactive
Ex: McKinsey and Company, Boston Data Corporation
1.1.5 Industrial Supplies and Parts - Consulting Group, Watson Wyatt
Manufacturers of intermediate goods. 1.2.11 Office Services - Providers of
Includes industrial parts and supplies 1.2.5 Education and Training Services - administrative, office management, and
made through injection molding, extrusion, Providers of specialized education and personnel services.
thermoforming, die casting, and metal training services. Includes on-the-job and
stamping, among others. off-the-job training, among others. Ex: Express Personnel Services, IKON
Office Solutions, Snelling Personnel
Ex: Advanced Plastics, Precision Urethane Ex: Apollo Group, Accredited Technical Services
and Machine, Lyons Tool and Die Training, WorldWideLearn
1.2.12 Printing Services - Providers of
1.1.6 Machinery - Manufacturers of 1.2.6 Environmental Services - Providers commercial printing services. Includes
heavy-duty industrial machinery. Includes of environmental services. Includes printing, copying, binding, and document
heavy equipment, hardware, and machine environmental management, waste preparation, among others.
tools, among others. management, and pollution control
services, among others. Ex: Kinko’s, AlphaGraphics, Sir Speedy
Ex: Caterpillar, Komatsu, Deere and
Company
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Data provided by
1.2.13 Security Services - Provider of 1.3.6 Other Transportation Ex: Gucci Group, Patek Philippe, Tag Heuer
residential and commercial security International
services. Includes security system 1.4 Other Business Products and Services
installation, monitoring, and staffing 2.1.5 Other Apparel
1.4.1 Buildings and Property - Owners
services, among others.
of buildings and property. Includes office 2.2 Consumer Durables
Ex: Brinks, AlliedBarton Security Services, buildings, factories, farmland, and oil
fields, among others. 2.2.1 Business Equipment and Supplies
Protection One
- Manufacturers of office supplies and
1.2.14 Other Commercial Services Ex: The Empire State Building, 175 Fifth equipment. Includes general office
Avenue supplies, filing products, and paper
1.3 Transportation shredders, among others.
1.4.2 Conglomerates - Companies
1.3.1 Air - Providers of products or engaged in multiple and unrelated Ex: Pitney Bowes, Steelcase, 3M
services related to commercial air industrial sectors.
transportation. Includes couriers, 2.2.2 Electronics - Manufacturers of
airfreight, and airplane maintenance, Ex: Berkshire Hathaway, Altria Group, GE consumer electronics. Includes digital
among others. cameras, televisions, and handheld
1.4.3 Government - Providers of products devices, among others.
Ex: Delta Cargo, Pilot Freight Services, and services to government agencies.
Lufthansa Cargo Includes consulting, information Ex: Samsung, Sony, Panasonic
technology services, and military
1.3.2 Marine - Providers of products or equipment and support, among others. 2.2.3 Home Furnishings - Manufacturers
services related to commercial water of home furniture and other decorative
transportation. Includes cargo shipping, Ex: Booz Allen Hamilton, Maximus, accessories. Includes couches, lamps, and
manufacturers of ships, and ship Skanska draperies, among others.
components, among others.
1.4.4 Other Business Products and Ex: Ethan Allen Interior, Furniture Brands
Ex: Overseas Shipholding Group, Services International, La-Z-Boy
DryShips, Seacor Holdings
2 Consumer Products & Services 2.2.4 Household Appliances -
1.3.3 Rail - Providers of products or Manufacturers of household appliances.
2.1 Apparel and Accessories Includes microwaves, vacuum cleaners,
services related to commercial rail
transportation. Includes freight trains, washers, and dryers, among others.
2.1.1 Accessories - Manufacturers or
manufacturers of trains, and train parts, designers of fashion accessories. Includes Ex: Whirlpool, Kenmore, LG
among others. jewelry, gloves, handbags, hats, belts,
scarves, and sunglasses, among others. 2.2.5 Recreational Goods - Manufacturers
Ex: Union Pacific, Canadian National
of recreational goods. Includes sporting
Railway, Norfolk Southern Ex: Ray-Ban, Coach, Citizen Watch goods and leisure goods, among others.
Company
1.3.4 Road - Providers of products or
Ex: Burton, Titleist, Coleman
services related to commercial land 2.1.2 Clothing - Manufacturers or
transportation. Includes freight trucks, designers of clothing. 2.2.6 Other Consumer Durables
manufacturers of commercial trucks, and
truck parts, among others. Ex: Ralph Lauren Polo, Hanes, Columbia 2.3 Consumer Non-Durables
Sportswear
Ex: J.B. Hunt Transport Services, Landstar 2.3.1 Beverages - Producers and distributors
System, Con-way 2.1.3 Footwear - Manufacturers or of alcoholic and non-alcoholic beverages.
designers of footwear. Includes athletic
1.3.5 Infrastructure - Providers of shoes, boots, and sandals, among others. Ex: Coca-Cola, Pepsi, Anheuser-Busch
products and services for commercial
Ex: Crocs, Sketchers, Timberland 2.3.2 Food Products - Producers,
transportation infrastructure. Includes
processors, and distributors of food
products and services related to airports,
2.1.4 Luxury Goods - Manufacturers or products. Includes companies engaged in
train stations, bus terminals, and highway
designers of luxury goods. Includes high food preparation, and manufacturers of
construction, among others.
end clothing, accessories, and footwear, packaged food, among others.
Ex: Hubbard Construction, Granite among others.
Ex: Kraft Foods, Heinz, Lancaster Colony
Construction, Mosites Construction
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Data provided by
2.3.3 Household Products - Manufacturers Ex: Facebook, LinkedIn, Match.com Ex: Nordstrom, Macy’s, Neiman Marcus
of household products. Includes cleaning
supplies, disposable products, and paper 2.4.6 Other Media 2.6.3 Distributors/Wholesale - Companies
towels, among others. engaged in the sale of bulk goods to
2.5 Restaurants, Hotels and Leisure individual consumers.
Ex: Clorox, Dixie, Kleenex
2.5.1 Casinos and Gaming - Owners and Ex: Costco, Sam’s Club, BJ’s Wholesale
2.3.4 Personal Products - Manufacturers operators of casinos and other gaming Club
of personal products. Includes cosmetics, operations.
perfumes, and hygiene products, among 2.6.4 General Merchandise Stores -
Ex: MGM Mirage, Boyd Gaming, Monarch Owners and operators of stores offering
others.
Casino a wide variety of general merchandise.
Ex: Old Spice, Gillette, Dove General merchandise includes personal
2.5.2 Cruise Lines - Owners and operators
products, food, film, and prescriptions,
2.3.5 Other Consumer Non-Durables of cruise lines. Includes cruise ships, and
among others.
ocean liners, among others.
2.4 Media Ex: CVS, RiteAid, Walgreen’s
Ex: Carnival Cruise Lines, Royal Caribbean
2.4.1 Broadcasting, Radio and Television Cruise Lines, Crystal Cruises 2.6.5 Internet Retail - Providers of retail
- Providers of entertainment through services primarily through the internet.
radio, television, or the internet. Includes 2.5.3 Hotels and Resorts - Owners and
local, national, and international radio and operators of hotels and resorts. Includes Ex: Amazon.com, Overstock.com, Netflix
television channels. vacationing facilities and commercial
establishments, among others. 2.6.6 Specialty Retail - Owners and
Ex: NBC, Telemundo, YouTube operators of retail stores specializing in
Ex: Four Seasons, Hyatt, Fairmont the sale of goods in a particular industry
2.4.2 Information Services - Providers of or sector.
information and content services. Includes 2.5.4 Leisure Facilities - Owners and
political surveys, financial data, and operators of leisure facilities. Includes Ex: Barnes and Noble, Petsmart, Office
statistics, among others. fitness centers and day spas, among Depot
others.
Ex: Bloomberg, Interactive Data 2.6.7 Other Retail
Corporation, Gallup Ex: LA Fitness, 24 Hour Fitness, Aveda
Lifestyle Salon and Spa 2.7 Services (Non-Financial)
2.4.3 Movies, Music and Entertainment
- Companies engaged in the production, 2.5.5 Restaurants and Bars - Owners and 2.7.1 Accounting, Audit and Tax Services
distribution, and sale of entertainment operators of restaurants and bars. - Providers of accounting, audit, and tax
products and services. Includes movie services to individuals.
Ex: Applebee’s, Chili’s, Ruth’s Chris Steak
theaters, production companies, and
House Ex: HandR Block, Jackson Hewitt, Liberty
music labels, among others.
Tax Service
2.5.6 Other Restaurants, Hotels and
Ex: Lowes Cineplex, Virgin Records,
Leisure 2.7.2 Educational and Training Services -
Paramount Pictures
Providers of educational and professional
2.6 Retail training services. Includes vocational
2.4.4 Publishing - Providers of print and
internet publishing services. Includes education and exam preparation, among
2.6.1 Catalog Retail - Provider of retail
newspapers, magazines, and books, others.
services through mail order and TV home
among others. shopping. Ex: University of Phoenix, ITT Technical
Ex: Daily Journal, The New York Times Institute, Princeton Review
Ex: QVC, HSN, Jewelry Television
Company, The McGraw-Hill Companies
2.7.3 Legal Services - Providers of legal
2.6.2 Department Stores - Owners
2.4.5 Social Content - Owners and services to individuals. Includes criminal
and operators of large stores with a
operators of social content websites. law, property law, human rights law, and
wide variety of products in distinct
Includes social networks, discussion insurance law, among others.
departments. Includes apparel, furniture,
boards, and dating websites, among electronics, hardware, and sporting Ex: DLA Piper, Goodwin Procter, White
others. goods, among others. and Case
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Data provided by
2.7.4 Real Estate Services - Providers of Ex: The Wind Turbine Company, Vestas, Ex: ZBB Energy, Young Gas Storage,
real estate services to individuals. Includes Solar Electric Power Company Falcon Gas Storage
real estate brokers and property valuation,
among others. 3.1.2 Coal and Consumable Fuels 3.3.3 Energy Traders and Brokers -
Equipment - Manufacturers or providers of Companies engaged in energy trading
Ex: Century 21, RE/MAX, Coldwell Banker coal and consumable fuels equipment. and brokerage services.
2.7.5 Other Services (Non-Financial) Ex: Joy Mining Machinery, Getman, Peters Ex: Dynergy, Reliant Energy, El Paso
Equipment Company Corporation
2.8 Transportation
3.1.3 Oil and Gas Equipment - Manufacturers 3.3.4 Energy Transportation - Companies
2.8.1 Air - Providers of air transportation or providers of oil and gas equipment. Includes engaged in energy transportation.
to consumers. Includes major airlines and rigs and drilling equipment, among others. Includes tankers, and gathering and
charter airlines, among others. transmission pipelines, among others.
Ex: Weatherford International, Baker
Ex: Northwest Airlines, United Airlines, Hughes, Cameron International Ex: Energy Transfer Equity, Kinder Morgan
Alaska Airlines Energy Partners, Enbridge
3.1.4 Other Equipment
2.8.2 Automotive - Providers of products 3.3.5 Infrastructure - Companies engaged
and services related to automotives. 3.2 Exploration, Production and Refining in energy infrastructure. Includes
Includes automotive manufacturers and pipelines, transmission lines, generation
automotive services, among others. 3.2.1 Energy Exploration - Companies
plants, and refineries, among others.
engaged in energy exploration. Includes
Ex: Ford, GM, Enterprise Rent-a-Car the identification, testing and development Ex: Energy Infrastructure Acquisition,
of sites for well drilling and wind farms. Brookfield Infrastructure Partners,
2.8.3 Marine - Providers of products and
Tortoise Energy Infrastructure
services related to water transportation. Ex: Apache Corporation, Anadarko
Includes leisure boat manufacturers and Petroleum, Hunt Oil 3.3.6 Other Energy Services
yacht dealers, among others.
3.2.2 Energy Production - Companies 3.4 Utilities
Ex: Viking Yacht Company, Marine engaged in energy production. Includes
Products Corporation, Fountain wind farming, drilling and removal of 3.4.1 Electric Utilities - Companies
Powerboat Industries crude oil and natural gas. engaged in the generation, transmission,
and distribution of energy for sale in the
2.8.4 Rail - Providers of products and Ex: Transocean, Diamond Offshore regulated market.
services related to rail transportation. Drilling, Noble Corporation
Includes passenger trains and express Ex: Southern Company, FPL Group,
trains, among others. 3.2.3 Energy Refining - Companies Dominion Resources
engaged in energy refining. Includes the
Ex: Amtrak, Grand Luxe Rail Journeys, refining of crude oil into gasoline, diesel, 3.4.2 Gas Utilities - Companies engaged in
Union Pacific Railroad kerosene, and fuel oil. the production, distribution and marketing
of natural gas and related services.
2.8.5 Other Transportation Ex: Sasol, Valero Energy, Imperial Oil
Ex: National Grid, Sempra Energy,
2.9 Other Consumer Products and 3.3 Services Equitable Resources
Services
3.3.1 Energy Marketing - Companies 3.4.3 Multi-Utilities - Companies
2.9.1 Other Consumer Products and engaged in energy marketing. Includes engaged in the generation, transmission,
Services gas marketing, pipeline analysis, and distribution, and sale of water, electricity
asset management, among others. and natural gas to residential, commercial,
3 Energy
industrial, and wholesale customers.
Ex: Marathon Oil, Hess Corporation,
3.1 Equipment Murphy Oil Ex: Exelon Corporation, Public Service
3.1.1 Alternative Energy Equipment - Enterprise Group, PGandE
3.3.2 Energy Storage - Companies
Manufacturers or providers of alternative engaged in energy storage. Includes 3.4.4 Water Utilities - Companies engaged
energy equipment. Includes compressed commercial and industrial batteries, fuel in providing water or wastewater services.
natural gas, solar, hydroelectric, and wind, cells, and capacitors, among others.
among others.
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Data provided by
Ex: Aqua America, California Water Service Ex: Deutsche Bank, UBS, Bank of America 4.3.6 Property and Casualty Insurance -
Group, American States Water Company Providers of property and casualty risks
4.2.2 National Banks - Non-investment insurance.
3.4.5 Other Utilities commercial banks located in one country.
Ex: Allianz, American International Group,
3.5 Other Energy Ex: Bank of New York, Citizens Bank, Hartford Financial
Capital One Bank
3.5.1 Other Energy 4.3.7 Re-Insurance - Providers of
4.2.3 Regional Banks - Non-investment insurance to insurance companies.
4 Financial Services commercial banks located in a particular
region. Ex: Berkshire Hathaway, Munich
4.1 Capital Markets/Institutions
Reinsurance, Hannover Reinsurance
Ex: Sterling Savings Bank, Evergreen
4.1.1 Asset Management - Financial
Bank, HomeStreet Bank 4.3.8 Other insurance
institutions providing management
of various securities to meet specified 4.2.4 Thrifts and Mortgage Finance 4.4 Other Financial Services
investment goals for the investors. - Financial institutions specializing in
Investors may be institutions or high net originating and/or servicing mortgage 4.4.1 Consumer Finance - Companies
worth individuals. loans. engaged in any kind of lending to
consumers. Includes sub prime lending,
Ex: Smith Barney, Edward Jones, Ex: Accredited Home Lenders, among others.
Ameriprise Financial Countrywide, Quicken Loans
Ex: HSBC Finance, CIT, CitiFinancial
4.1.2 Brokerage - Financial Institutions 4.2.5 Other Commercial Banks
acting as an intermediary between a buyer 4.4.2 Holding Companies - Companies
and seller of securities, usually charging a 4.3 Insurance that do not produce goods or provide
commission. Includes clearing houses and services, but instead own shares of other
stock brokerage firms, among others. 4.3.1 Automotive Insurance - Providers companies.
of insurance for cars, trucks, and other
Ex: Citigroup, Options Clearing vehicles. Ex: Berkshire Hathaway, UAL Corporation,
Corporation, LCH.Clearnet AMR Corporation
Ex: State Farm, All-State, GEICO
4.1.3 Investment Banks - Financial 4.4.3 Real Estate Investment Trusts
institutions functioning across all areas of 4.3.2 Commercial/Professional Insurance (REITs) - REIT is a tax designation for a
capital markets. Includes raising money by - Providers of commercial or professional corporation investing in real estate. REITs
issuing and selling securities, and advisory insurance. Includes medical malpractice receive special tax reductions and offer
within mergers and acquisitions, among and legal malpractice, among others. high yield investments in real estate.
other financial services.
Ex: CNA Insurance, Zurich, FM Global Ex: AMB Property, Duke Realty, EastGroup
Ex: Citigroup, Goldman Sachs, Lehman Properties
4.3.3 Insurance Brokers - Companies
Brothers
sourcing contracts of insurance on behalf 4.4.4 Specialized Finance - Companies
4.1.4 Private Equity - Financial of their customers. engaged in providing specialized finance
institutions engaged in long-term loans to both public and private enterprises.
Ex: Marsh and McLennan, Willis Group,
with multinational corporations and
Brown and Brown Ex: Latitude Capital Group, Budget
governments. Includes merchant banks,
and private equity firms, among others. Finance Company, Capital Source
4.3.4 Life and Health Insurance - Providers
of life and health insurance. 4.4.5 Other Financial Services
Ex: Blackstone Group, Carlyle Group,
Kohlberg Kravis Roberts Ex: ING, Prudential, MetLife 5 Healthcare
4.1.5 Other Capital Markets/Institutions 4.3.5 Multi-line Insurance - Providers 5.1 Devices and Supplies
of diversified insurance services with
4.2 Commercial Banks
multiple interests in life, health, and 5.1.1 Diagnostic Equipment -
4.2.1 International Banks - Non- property insurance. Manufacturers of imaging and non-
investment commercial banks located in imaging devices used to assess and
Ex: AXA, Prudential, Sun Life diagnose medical conditions. Includes
more than one country.
X-ray and MRI machines, otoscopes and
66
Data provided by
stethoscopes, and ultrasound equipment, Ex: American Medical Supplies and Ex: HLTH Corporation, Apache Medical
among others. Equipment, AmerisourceBergen, BMP Systems, Wellsource
Sunstone, Owens and Minor
Ex: Welch Allyn, Siemens, AFC Industries, 5.3.2 Enterprise Systems - Developers
SOMA Technology 5.2.3 Elder and Disabled Care - Facilities and producers of software and systems
and services for the care of senior citizens. that cover multiple areas of the healthcare
5.1.2 Medical Supplies - Manufacturers of Includes assisted living, long term care, organization.
medical supplies that would be considered hospice care, nursing homes, and home
non-durable. Includes syringes, diabetes care, among others. Ex: NextGen, Cerner, McKesson
supplies, bandages, and protective wear, Corporation
among others. Ex: RehabCare Group, Sunrise Senior
Living, AccentCare 5.3.3 Medical Records Systems -
Ex: Frank Healthcare, Johnson and Johnson, Developers and producers of software or
Adenna, Cardinal Health, Covidien 5.2.4 Hospitals/Inpatient Services - systems to organize medical records.
Facilities and services for long-term
5.1.3 Monitoring Equipment - care, and inpatient care and procedures. Ex: NextGen, McKesson, MediNotes
Manufacturers of devices used to collect Includes invasive surgical procedures, and
and monitor vital signs. Includes heart- 5.3.4 Outcome Management - Developers
emergency services.
rate monitors, oxygen saturation monitors, and producers of software or systems
and fetal monitors, among others. Ex: Tenet Healthcare, HCA, Universal used to analyze the effectiveness of
Health Services treatments prescribed by doctors.
Ex: Phillips Medical Systems, GE Medical
Systems, Welch Allyn, SOMA Technology, 5.2.5 Laboratory Services - Providers Ex: Tri-Analytics, Outcome Concept
Datascope of medical laboratory services. Includes Systems, Protocol Driven Healthcare
blood and tissue testing.
5.1.4 Surgical Devices - Manufacturers of 5.3.5 Other Healthcare Technology
devices and equipment used in a surgical Ex: Quest Diagnostics, LabCorp, LabOne Systems
setting. Includes laparoscopy instruments,
5.2.6 Managed Care - Owners and 5.4 Pharmaceuticals and Biotechnology
retractor systems, and positioning devices,
among others. operators of managed health plans.
5.4.1 Biotechnology - Companies engaged
Includes Preferred Provider Organizations
in research, development, and production
Ex: Lyons, Mediflex, Boston Scientific (PPOs) and Health Maintenance
of biotechnology. Includes embryology,
Organizations (HMOs).
5.1.5 Therapeutic Devices - Manufacturers genetics, cell biology, molecular biology,
of devices for rehabilitation or therapy. Ex: Aetna, Kaiser Permanente, and biochemistry, among others.
Includes muscle stimulators, light therapy, UnitedHealth Group
Ex: Elan, Genentech, Amgen
and pacemakers, among others.
5.2.7 Practice Management - Providers
5.4.2 Discovery Tools - Researchers and
Ex: Medtronic, Boston Scientific, Empi of consulting and management services
developers of tools used in drug discovery
to medical practices. Excludes practice
5.1.6 Other Devices and Supplies and drug delivery research. Includes
management software, such as billing or
compound libraries, enzymes, kinases,
medical records software.
5.2 Services and specialized proteins, among others.
Ex: Advantage Medical Claims, Medical
5.2.1 Clinics/Outpatient Services - Ex: PerkinElmer, Qiagen, Charles River
Management Associates, Healthcare
Facilities and services for short-term, Laboratories
Facilitators
outpatient care and procedures. Includes
rehabilitation, diagnostic testing, and 5.4.3 Drug Delivery - Researchers
5.2.8 Other Healthcare Services
outpatient surgery and exams. and developers of medication delivery
5.3 Healthcare Technology Systems methods. Includes targeted delivery
Ex: AmSurg, Physiotherapy Associates, methods, and timed release formulations,
HealthSouth 5.3.1 Decision/Risk Analysis - Developers among others.
and producers of software or systems
5.2.2 Distributors - Distributors of used to expedite the medical decision Ex: Elan, Hospira, Nektar Therapeutics
healthcare equipment and supplies. and risk management process. These
Includes all distributors of healthcare 5.4.4 Drug Discovery - Researchers
programs try to assist doctors and nurses
products. and developers of new drugs. Includes
in their decision making process.
identification, screening, and efficacy
67
Data provided by
testing of drug candidates, among others. 6.1.5 Telecommunications Service Ex: Agilent Technologies, National
Providers - Providers of commercial Instruments, Tektronix, Chase Scientific
Ex: Bristol-Meyers Squibb, PerkinElmer, Elan and residential voice and data services.
Includes phone service, paging, and 6.2.4 Office Electronics - Manufacturers,
5.4.5 Pharmaceuticals - Manufacturers designers, and distributors of office
voicemail, among others.
and distributors of established drugs/ equipment. Includes copiers and faxes,
pharmaceuticals. This category includes Ex: BellSouth, AT&T, Qwest, Vodafone, among others.
any large drug company that primarily Airtel
manufactures medicines; however they Ex: Xerox, Ricoh, Lanier
may also be engaged in drug research and 6.1.6 Wireless Communications Equipment
development. - Manufacturers, designers and marketers 6.2.5 Storage - Manufacturers, designers,
of wireless communications equipment. and distributors of electronic storage
Ex: Bristol-Meyers Squibb, GlaxoSmithKline, Includes wireless handsets, and wireless devices. Includes hard drives, optical
Novartis, Eli Lilly and Company modems and routers, among others. drives, and flash memory, among others.
5.4.6 Other Pharmaceuticals and Ex: LG, Motorola, Cisco Ex: Seagate Technology, EMC, Western
Biotechnology Digital
6.1.7 Wireless Service Providers -
5.5 Other Healthcare Providers of wireless telephone networks. 6.2.6 Other Hardware
Includes cellular telephone service, and
5.5.1 Other Healthcare 6.3 Semiconductors
personal communication service (PCS),
6 Information Technology among others. 6.3.1 Application Specific - Manufacturers
and designers of application specific
6.1 Communications and Networking Ex: Verizon Wireless, Qualcomm, Nextel
semiconductors and integrated circuits.
Partners
6.1.1 Cable Service Providers - Developers Ex: First Solar, NVIDIA, Linear Technology
and marketers of television, internet and 6.1.8 Other Communications and
voice services for cable networks. Includes Networking 6.3.2 General Purpose - Manufacturers
broadband internet, VoIP, and cable and designers of generic or general
6.2 Hardware
television, among others. purpose semiconductors and integrated
6.2.1 Computers, Parts and Peripherals - circuits.
Ex: Comcast, Cox Communications,
Manufacturers, designers, and distributors
Adelphia Ex: Intel, Texas Instruments,
of computers and peripherals. Includes
STMicroelectronics
6.1.2 Connectivity Products - Manufacturers monitors, cases, mice, keyboards, and
of electronic components used to create printers, among others. 6.3.3 Production - Owners and operators
networks or link devices. Includes bulk cable, of semiconductor foundries. “Foundries”
Ex: Dell, Apple, Hewlett-Packard, Sony,
connectors, and adapters, among others. are companies that manufacture
IBM
semiconductors, but are not involved in
Ex: Belkin, AMP Inc., Griffin Technology, their design.
6.2.2 Electronic Components -
Molex
Manufacturers, designers, and distributors
Ex: Taiwan Semiconductor Manufacturing,
6.1.3 Fiberoptic Equipment - of electronic parts and components for
United Microelectronics, Chartered
Manufacturers of fiber optic and use in more advanced products. Includes
Semiconductor Manufacturing, SMIC
photonics equipment. Includes bulk cable, processors, video cards, sound cards,
connectors, lasers, and light emitting fans, and motherboards, among others. 6.3.4 Other Semiconductors
diodes (LEDs), among others.
Ex: Intel, Advanced Micro Devices (AMD), 6.4 Services
Ex: Oplink Communications, Optical Texas Instruments, NVIDIA
Communication Products, Belden 6.4.1 Consulting and Outsourcing
6.2.3 Electronic Equipment and - Providers of outside consulting,
6.1.4 Internet Service Providers - Instruments - Manufacturers, designers, outsourcing, or offshoring services.
Providers of dial-up and DSL access to the and distributors of electronic equipment Includes subcontractors, and business
internet. and instruments. Includes multimeters, process outsourcers, among others.
and oscilloscopes, among others. This
Ex: America Online, NetZero, EarthLink, category is for electronic testing and Ex: Gartner, Infosys Technologies, Sapient
Juno, PeoplePC measurement devices. Corporation
68
Data provided by
6.4.2 Systems and Information - 6.5.7 Entertainment Software - Applications - Developers and producers
Management Providers of systems and Developers of consumer-oriented gaming of software for planning, coding, and
information management services. software and applications. debugging of new software. Includes
Includes companies providing IT hosting compilers, build tools, debuggers,
and data centers, among others. Ex: Zynga, Rovio disassemblers, and documentation
generators, among others.
Ex: Rackspace, Network World, Mosso 6.5.8 Financial Software - Developers
and producers of software for managing Ex: Eiffel Software, Borland Software,
6.4.3 Other IT Services accounting and financial processes. Also BigFix
includes various software developed
6.5 Software specifically for the financial industry. 6.5.15 Vertical Market Software -
Developers and producers of vertical
6.5.1 Application Software - Developers Ex: Intuit, CapControls, Merlin Securities, market software. Includes point of sale
and producers of software for specific tasks Tally, Finacle software, among others. A vertical market
or applications. Includes general application
is a group of companies that do business
software not classified elsewhere. 6.5.9 Internet Software - Developers and
in the same industry.
producers of software for accessing and
Ex: Microsoft, Oracle, Adobe manipulating internet content. Includes Ex: SAP, Hypercom, Ingenico
internet browsers, and file transfer
6.5.2 Automation/Workflow Software -
protocol (FTP) programs, among others. 6.5.16 Other Software
Developers and producers of software for
automation and workflow management. Ex: Apple, Microsoft, Mozilla Foundation, 6.6 Other Information Technology
Includes automation of IT processes, data Norwegian Opera Software
transferring, FTPs, and scheduling, among 6.6.1 Other Information Technology
others. 6.5.10 Multimedia and Design Software
- Developers and producers of software 7 Materials & Resources
Ex: Tethys Solutions, Parallels, Synopsys for creating and manipulating multimedia
7.1 Agriculture
content. Includes Computer Aided Design
6.5.3 Business/Productivity Software -
(CAD) software, and video and image 7.1.1 Animal Husbandry - Companies that
Developers and producers of software
editing software, among others. breed, raise, and market livestock.
for the enterprise where the focus is on
process management and automation. Ex: Adobe Systems, Quark, Autodesk Ex: Seaboard Corp., Smithfield Foods, Alico
Ex: Salesforce, IBM, Microsoft 6.5.11 Network Management Software 7.1.2 Aquaculture - Companies that
- Developers and providers of software cultivate and market aquatic organisms.
6.5.4 Communication Software -
and systems for managing and organizing Includes fish, shrimp, kelp/seaweed and
Developers and producers of software
networks and information. Includes cultured pearls, among others.
for communicating electronically through
network monitoring software, and
voice, video or text. Includes text and
network security software, among others. Ex: Stolt Sea Farm, D.B. Kenney Fisheries,
video chat, web conferencing, and web-
America’s Catch
based presentations, among others. Ex: Altiris, Tivoli, NetIQ
7.1.3 Cultivation
Ex: America Online, Microsoft, WebEx 6.5.12 Operating Systems Software -
Developers and producers of computer 7.1.4 Horticulture - Companies that
6.5.5 Database Software - Developers
operating systems. cultivate and market grains, fruits, flowers,
and producers of software to manage and
and vegetables.
utilize information in databases. Includes Ex: Apple, Microsoft, Red Hat Software,
MySQL, Microsoft SQL Server, and Oracle, Novell Ex: Cargill, Archer Daniels Midland, The
among others. Andersons, Inc.
6.5.13 Social/Platform Software -
Ex: Microsoft, Oracle, IBM, Sun Microsystems Developers and producers of software 7.1.5 Other Agriculture
that facilitates the production, distribution
6.5.6 Educational Software - Developers 7.2 Chemicals and Gases
or following of social content. The
and producers of educational software.
category also includes online markets. 7.2.1 Agricultural Chemicals - Producers of
Ex: Renaissance Learning, Scientific Learning chemicals used primarily in an agricultural
Ex: Facebook, LinkedIn
Corporation, The Learning Company setting. Includes diammonium phosphate
6.5.14 Software Development (DAP), anhydrous ammonia (NH3), and
69
Data provided by
potassium chloride (KCl), among others. Ex: Packaging Corporation of America, 7.6.3 Gold - Miners, producers and
International Paper, Georgia-Pacific marketers of gold.
Ex: Monsanto, Mosaic, CF Industries Holdings
7.4.3 Plastic - Producers of plastic Ex: Newmont Mining, AngloGold Ashanti,
7.2.2 Commodity Chemicals - Producers of containers and packaging materials. Gold Fields Limited
chemicals that are sold in bulk due to their
low cost. Includes methane, hydrochloric Ex: Ball Corporation, Sonoco, Silgan Holdings 7.6.4 Iron and Steel - Miners, producers
acid, chlorine, and sodium chloride, among and marketers of iron and steel.
others. 7.4.4 Wood - Producers of wood
containers and packaging materials. Ex: Nucor, Olympic Steel, ArcelorMittal
Ex: Mitsubishi Chemical, Terra Nitrogen,
ExxonMobil Ex: Greif Inc., Berry Industrial Group, 7.6.5 Multi-line - Miners, producers and
Universal Forest Products marketers of diversified metals and minerals.
7.2.3 Industrial Chemicals - Producers
of chemicals used primarily in industrial 7.4.5 Other Containers and Packaging Ex: BHP Billiton, Rio Tinto, Teck Cominco
applications. Includes plastics, biocides,
7.5 Forestry 7.6.6 Precious Metals and Minerals - Miners,
coolants, and polyglycols, among others.
producers and marketers of precious metals
7.5.1 Forestry Development/Harvesting and minerals. Includes platinum, silver, and
Ex: Celanese, FMC Corp., Archer Daniels
- Companies engaged in developing and palladium, among others.
Midland
harvesting forested areas.
7.2.4 Multi-line Chemicals - Producers of Ex: Coeur d’Alene Mines, Stillwater Mining,
Ex: Weyerhaeuser, Deltic Timber, Metalor
diversified chemicals.
MAXXAM
Ex: Dow Chemical, Air Products and 7.6.7 Other Metals, Minerals and Mining
7.5.2 Forestry Processing - Companies
Chemicals, FMC Corp., DuPont
engaged in converting raw forest products 7.7 Textiles
7.2.5 Specialty Chemicals - Producers into marketable materials. Includes
lumber, woodchips, engineered wood 7.7.1 Animal - Manufacturers of animal-
of proprietary or advanced chemical
products, and paper products, among based textiles. Includes wool, cashmere
compounds. Includes food additives, and
others. and silk, among others.
polymers, among others.
Ex: Weyerhaeuser, Louisiana-Pacific, Ex: Buckskin Fur and Leather, J. Hewit and
Ex: Sigma-Aldrich, Lubrizol, Cytec Industries
Stimson Lumber, Pope and Talbot, Sons
7.2.6 Other Chemicals and Gases Georgia-Pacific, Boise Cascade, Temple-
7.7.2 Plant- Manufacturers of plant-based
Inland Forest Products
7.3 Construction (Non-Wood) textiles. Includes hemp and cotton, among
7.5.3 Paper/Soft Products others.
7.3.1 Raw Materials (Non-Wood) -
Harvesters or producers of non-wood 7.5.4 Wood/Hard Products Ex: Parkdale Mills, Boston Felt Company,
construction materials. Includes stone, Aetna Felt Corporation
gravel, sand, cement, and bricks, among 7.5.5 Other Forestry
7.7.3 Mineral - Manufacturers of mineral-
others. Finished construction products are
7.6 Metals, Minerals and Mining based textiles. Includes asbestos, glass
classified under Building Products.
fiber, and metal fiber, among others.
7.6.1 Aluminum - Miners, producers
Ex: Texas Industries, Eagle Materials,
and marketers of aluminum. Includes Ex: Roxul, Potter and Soar, Central Glass
Hanson Aggregates North America
aluminum ore, and rolled aluminum,
among others. 7.7.4 Synthetic - Manufacturers of synthetic
7.4 Containers and Packaging
textiles. Includes polyester, aramid, nylon
7.4.1 Metal - Producers of metal Ex: Alcoa, Kaiser Aluminum, Alcan and spandex, among others.
containers and packaging materials.
7.6.2 Coal - Miners, producers and Ex: Huitong Chemical, Unifi, DuPont-Akra
Ex: Ball Corporation, Greif Inc., Silgan marketers of coal. Includes lignite coal, Polyester
Holdings bituminous coal, anthracite coal, and coke,
among others. 7.7.5 Other Textiles
7.4.2 Paper - Producers of paper
Ex: Peabody Energy, CONSOL Energy, 7.8 Other Materials
containers and packaging materials.
Drummond Company
7.8.1 Other Materials
70
Data provided by
Timeline
22-Nov-2013
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Y E ARBOOK

National Venture Capital Association NVCA Board of Directors 2019-2020

nvca.org | [email protected] | 202-864-5920

BOBBY FRANKLIN President and CEO Chair-Elect

JEFF FARRAH General Counsel DENISE MARKS SV Health Investors, Treasurer

Affairs MICHAEL BROWN Battery Ventures, At-Large

HANNAH MUNIZZA Senior Director of

Forward RYAN DRANT Questa Capital

ALLYSON CHAPPELL Director of Conferences & PATRICK ENRIGHT Longitude Capital

Events STEVE FREDRICK Grotech Ventures

CHARLOTTE SAVERCOOL Director of Government JOE HOROWITZ Icon Ventures

Affairs GEORGE HOYEM In-Q-Tel

MICHELE SOLOMON Director of Administration CHARLES HUDSON Precursor Ventures

DEVIN MILLER Manager of Communications & NAGRAJ KASHYAP M12

Digital Strategy MARK KVAMME Drive Capital

EMILY VARADY Executive Assistant MOHAMAD MAKHZOUMI NEA

DATA AND DESIGN

VAN LE Senior Data Analyst

Critical to the growth and health of VC

Highlights of the US venture ecosystem in 2019

CAPITAL DEPLOYED TO STARTUPS (More details starting on page 24)

EXIT LANDSCAPE (More details starting on page 34)

• Venture-backed companies accounted for 43% of all US IPOs in 2019.

**Calculated as compound annual growth rate.

Venture Capital 101

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

Concept, Product Operational, Growth Expansion

The VC Fund Structure

Fund manager Ownership of the fund

Venture Capital Fund

Fund ownership of portfolio companies

Investment Investment Investment Investment Investment

How Venture Capital Works

Fundraising Investment Company Growth Exit Returns Re-investment

Furthermore, recent research released to note that global investment has

While venture investing has generated

in existence (i.e., those who have raised # of First-time VC Funds Raised 31 23 35

Fund and Firm Analysis

Source: NVCA 2020 Yearbook, Data Provided by PitchBook

Number of Active Investors (#)

US as a % of Global VC Deal Flow by Year

Source: NVCA 2020 Yearbook, Data Provided by PitchBook

Active Investor Count in 2019 Deals by HQ State

US as a % of Global VC Exits by Year

Source: NVCA 2020 Yearbook, Data Provided by PitchBook

Active Investor Count in 2019 Deals by Investor HQ State

US as a % of Global VC Fundraising by Year

Global Capital Raised

Global Capital Raised

Source: NVCA 2020 Yearbook, Data Provided by PitchBook

AUM by State in 2019

$7.3B $71.6M $99.1M $68.8M

Source: NVCA 2020 Yearbook, Data Provided by PitchBook

Top 5 States by AUM in Distribution of Firms by AUM in 2019

California $257.7 250 236

200 177 176

AUM by Year by State ($M)

Alabama $166.9 $184.0 $175.2 $176.8 $169.4 $171.4 $160.6 $143.8

Arizona $90.2 $90.9 $81.5 $71.7 $65.7 $51.8 $93.5 $129.2