Venture Capital Insights

2013 year-end

Global VC landscape, angel and incubator participation trends,
and exit landscape

February 2014
Page 2 Venture Capital Insights 2013 year-end
Insights development team
Bryan Pearce, Global Leader, EY Entrepreneur Of The Year and Venture Capital Advisory
Group, EY
Sandra Feldner Vandergriff, Americas Strategic Growth Markets, IPO and Venture Capital
Advisory Group, EY
Shanta Kumari, EY Knowledge, EY
Aseem Goyal, EY Knowledge, EY


Prof. George Foster, Graduate School of Business, Stanford University
Dr. Martin Haemmig, Adjunct Professor, Globalization of Venture Capital, CeTIM and
former Senior Advisor on Venture Capital, Stanford University (SPRIE)
Prof. Steven Kaplan, Graduate School of Business, University of Chicago

Page 3 Venture Capital Insights 2013 year-end
Venture Capital Insights

This edition of the Venture Capital Insights analyzes global investment activity including
Venture Capital initial equity rounds and fundraising by VC firms. It also examines the
increasingly important role of angel investors and incubators as well as the global exit
landscape for VC-backed companies.

Content overview:
1.3 Global VC fundraising activities
1.1 Global VC investment activity
Global VC landscape
1.2 Global VC initial equity rounds of financing
Global VC exit landscape through initial public offerings (IPOs) and mergers
and acquisitions (M&As)
Angel and incubator participation trends
2
1
3
Venture Capital Insights 2013 year-end
Section 1: Global VC investment landscape
Analysis by investment activity, initial equity round of financing and VC fundraising activity
Page 5 Venture Capital Insights 2013 year-end
Section 1: Global VC landscape
Summary

1.1 Global VC investment activity
Global VC investment activity was marginally up in 2013 and reached US$48.5 billion, a 2% increase compared to 2012,
though still below 2011 and pre-2009 levels.
Although the US economy showed strong signs of growth by the end of 2013, this is yet to be reflected in regional VC
activity. While the total amount invested in the US in 2013 saw a marginal growth of 1% over 2012, the number of rounds fell
by 5%. China recorded the lowest yearly total of amount raised, US$3.5 billion, since 2009.
The Bay Area and New England have been the top two hotbeds for the past five years. Europe continued to attract small-
ticket deals in 2013, indicating that VC investors continue to be cautious about making large investments in the region.
Following historical trends, the technology sector continued to attract the major share of VC investment as well as number of
deals in the US, Canada and Israel, while the consumer services sector continued to secure the bulk of VC investment and
deals in Europe, India and China.
Companies at the revenue-generation stage continued to dominate in terms of number of rounds as well as the proportion of
VC investment, indicating the preference of VC investors for these partially de-risked companies across all geographies.
Page 6 Venture Capital Insights 2013 year-end
Section 1: Global VC landscape
Summary


1.2 Global VC initial equity rounds of financing
Despite the slower activity in the US in 2013, both in terms of number of initial financing rounds and amount invested, the
average deal size in the region primarily remained comparable to 2012 levels.
The first round continued to dominate with highest number of initial financing rounds as well as amount invested recorded
across geographies. Although the number of initial financings recorded in the second round increased for the US and Europe
in 2013 as compared to 2012, the second round continued to see the lowest activity across all round classes.
1.3 Global VC fundraising activities
In 2013, early stage fundraising activity remained strong in the US, recording the highest total value since 2009, whereas,
for the Asia-Pacific region, fundraising activity continued its downward trajectory since 2011 for early-stage and multistage
categories, and there was no late-stage activity in 2013.
Venture Capital Insights 2013 year-end
Section 1.1: Global VC investment activity
Analysis by geography, hotbed, sector, stage of development and round class
Page 8 Venture Capital Insights 2013 year-end
Global VC investment activity was marginally up in 2013 and reached US$48.5 billion, a 2% increase compared to 2012. However, it remains below
2011 and pre-2009 levels, as recovery in the global economy continues to rebound and grow slowly.
The last quarter of 2013 was significant, marking a quarterly increase over 3Q13 both in terms of deals and dollars. Amounts invested increased by
10% to reach US$13.5 billion with an 8% increase in the number of rounds (1,533). The quarter saw the largest number of rounds since 3Q11 and the
highest proceeds in the last eight quarters.
The outlook for VC investments will continue to grow at a modest rate in 2014, with venture-backed companies looking to benefit from the improving
exit conditions. A strong IPO market and improved global economy will continue the momentum in 2014.
68% of the total global dollars invested were in the US, with 26% of the total global dollars invested in the Bay Area.
Global VC activity by amount invested and number of rounds
Source: Dow Jones VentureSource
11.0
13.7
6.8
9.8
12.7
10.8 10.2
12.9
13.6
8.4
12.0
14.1
13.2
12.5
12.6
13.7
8.6
9.6
14.9
11.2
12.3
13.2
9.9
11.4
14.8
13.0
12.3 13.5
5,805
5,435
4,748
5,349
5,820
5,741
5,753
1,547
1,336
1,503 1,518
1,455 1,400
1,533
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4
Note: Global total includes the US, Europe, Canada, China, Israel (all site) and India only.
49.7 50.8 35.2 46.3 54.7 47.6 48.5
Global VC investment
2013 VC investment activity marginally up from 2012; momentum expected to continue in 2014
Page 9 Venture Capital Insights 2013 year-end
1.6
2.2
1.1
1.5
1.9
1.4 1.5
2.1
1.8
1.1
1.6
1.8
1.9
2.3
1.7
2.0
1.3
1.4
1.8
1.4
1.7
2.1
1.8
2.2
2.6
1.8
1.5
2.0
1,758
1,479
1,288
1,411
1,322
1,320
1,395
482 436 440
421
343 340
357
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
0
1
2
3
4
5
6
7
8
9
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4
8.0
9.1
4.7 5.3
8.0 7.5 7.3
8.9
8.4
6.3
8.0
9.2
9.1
8.2
8.6
9.1
6.0
6.2
10.5
7.8
8.7
8.8 6.7
7.5
9.6
8.5
8.3 8.9
3,132
3,081
2,786
3,161
3,600 3,649
3,480
809 703
844
884
910
872
901
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0
5
10
15
20
25
30
35
40
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4

US
Europe
34.3 33.3 24.5 29.2 36.2 32.8 33.1
7.6 7.8 5.7 7.1 7.3 6.2 7.4
Source: Dow Jones VentureSource
While the total dollars invested in the US in 2013 saw a marginal
growth of 1% over 2012, the number of rounds fell by 5%. Although
the US economy saw strong signs of growth by the end of 2013, with
an upward revision in consumer spending, employment and
continued policy support, this is yet to be fully reflected in regional
VC activity.
In 2013, European VC investment rebounded to above 2011 levels,
largely driven by a positive economic scenario in the two largest
European VC hotbeds UK and Germany. In 4Q13, investment
increased by 18% as compared to 3Q13.
Chinese companies raised a total of US$3.5 billion in 2013, the
lowest yearly total since 2009. Despite a 20% increase in the number
of VC rounds, the dollar amount raised declined by almost 30%,
compared to 2012. However, the recent reopening of the capital
markets with over 700 IPOs in the pipeline is likely to give a boost to
VC investment activity going forward.
VC investment by geography
Activity recovered after recording a drop of 13% in 2012; China recorded the lowest yearly total
since 2010
China
0.5
1.2
0.5
2.4
1.7
1.1
0.6
0.8
1.7
0.6
1.1
1.8
1.5
0.6
1.4
1.4
0.8
1.0
1.5
0.9
0.8
1.2
0.6
0.9
1.7
1.5
1.6
1.5
396
362
315
388
404
261
314
130
77
106 113
95 64 106
0
50
100
150
200
250
300
350
400
450
0
1
2
3
4
5
6
7
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4
3.9 5.0 2.8 6.1 6.5 5.0 3.5
Page 10 Venture Capital Insights 2013 year-end
In Canada, 4Q13 fared the best among the last eight quarters in
terms of both deal volume and dollars raised. Consequently, the
amount invested in 2013 was up 11% over 2012, while deal volume
increased by 23% during this period.
In 2013, VC activity revived in Israel in terms of deal volume after
recording a considerable fall in 2012. The number of rounds
increased by 18%, compared to the previous year, on the back of
strong activity in the business financial services and technology
sectors. In terms of proceeds, VC funds invested totalled US$1.7
billion, a 55% increase over 2012.
VC activity in India was largely in line with 2012 levels in terms of
deal value and volume. While the number of deals fell marginally by
2% compared to 2012, the amount invested increased by 13%. An
uptick in investment in the consumer services sector led to this
increase in value.

Israel (all site) India

0.3 0.2 0.2
0.2
0.3
0.5
0.4
0.3
0.9
0.1 0.2
0.4
0.3
0.6
0.2
0.4
0.1
0.3
0.4
0.5
0.4
0.2
0.2
0.3
0.3
0.4
0.3
0.4
97
119
95
116
180
227 222
32 27
37
33 42
49
58
0
50
100
150
200
250
0.0
0.5
1.0
1.5
2.0
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4
0.9 1.8 0.8 0.9 1.5 1.6 1.8 1.9 2.2 0.9 1.9 1.9 1.1 1.7
Source: Dow Jones VentureSource
0.4
0.8
0.2
0.2 0.3 0.2 0.3
0.5
0.6
0.2
0.9
0.6
0.2
0.6
0.5
0.5
0.3
0.2
0.4
0.3
0.4
0.5
0.3
0.2
0.5
0.6
0.3
0.4
282
285
176
160 173
141
166
60
67
52
45
37 40
48
0
50
100
150
200
250
300
0.0
0.5
1.0
1.5
2.0
2.5
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4
VC investment by geography
Strong VC activity in Canada and Israel compared to year-ago levels
Canada
0.2 0.2
0.1
0.2 0.4 0.2 0.2
0.2 0.2
0.1
0.2
0.4
0.2 0.2
0.3
0.3
0.1
0.4
0.3
0.3
0.3
0.3
0.2
0.2
0.2
0.1
0.3
0.4
140
109
88
113
141
143
176
34
26
24
22
28
35
63
0
20
40
60
80
100
120
140
160
180
200
0.0
0.5
1.0
1.5
2007 2008 2009 2010 2011 2012 2013
N
u
m
b
e
r

o
f

r
o
u
n
d
s

A
m
o
u
n
t

i
n
v
e
s
t
e
d

(
U
S
$
b
)

Amount invested during Q1 (US$b) Amount invested during Q2 (US$b)
Amount invested during Q3 (US$b) Amount invested during Q4 (US$b)
Number of rounds during the year Number of rounds during Q4
1.0 0.8 0.5 1.0 1.2 0.9 1.0
Page 11 Venture Capital Insights 2013 year-end
The Bay Area and New England have been the top two investment destinations for the past five years. In 2013, however, NY Metro, supported by consumer services
sector deals, surpassed Southern California to rank third among global VC hotbeds and is close to overtaking New England in dollars raised.
Europe continued to attract small-ticket deals in 2013. The average round size in European hotbeds (except for Switzerland) remained the smallest across all global
hotbeds, indicating that VC investors continue to be cautious about making large investments in the region.
In 2013, despite reduced VC amounts in Beijing, compared to 2008 levels, the average round size continued to be among the highest globally. This was primarily due to
strong investment in later stage health care and information technology sectors.
Note: Chart scales vary for the purpose of clarity. Data on Israel is based on Israel all site.
40
80
72
60
248
176
116
247
133
166
335
273
444
377
1,125
Number of rounds
402
448
552
566
1,039
1,044
1,220
1,311
1,519
1,666
2,170
3,164
3,299
3,733
12,657
Switzerland
Illinois
Shanghai
Bangalore
France
Canada
Potomac
Germany
Beijing
Israel
UK
South Cal
NY Metro
New England
Bay Area
Dollars raised (US$m)
11.3
Avg. round size
(US$m)
Top five hotbeds* US$25.0b
(72% of the total**)
Source: Dow Jones VentureSource
* Top five hotbeds by amount invested; ** Total of 15 major VC hotbeds listed above
Top five hotbeds* 2,554
(66% of the total**)
33
50
109
39
64
268
104
265
127
398
285
281
284
372
1,062
Number of rounds
263
496
810
824
874
1,256
1,280
1,367
1,930
2,166
2,189
2,615
3,364
3,448
12,303
Switzerland
Illinois
Canada
Bangalore
Shanghai
France
Potomac
Germany
Beijing
UK
Israel
NY Metro
South Cal
New England
Bay Area
Dollars raised (US$m)
Top five hotbeds* US$23.9b
(68% of the total**)
Top five hotbeds* 2,284
(61% of the total**)
9.9
7.4
11.6
6.5
10.0
11.4
5.3
10.5
5.9
4.2
9.4
7.7
5.6
10.1
11.6
Avg. round size
(US$m)
9.3
11.8
9.3
7.7
5.4
15.2
5.2
12.3
4.7
13.7
21.1
7.4
9.9
8.0
2008
2013
VC investment by hotbed
NY Metro surpassed Southern California to rank third in 2013; the average round size in
Southern California, however, was the highest among all VC hotbeds
Page 12 Venture Capital Insights 2013 year-end
Source: Dow Jones VentureSource
By number of rounds:
While the information technology (IT) sector attracted the most rounds and investment in the US, Canada and Israel in 2013, the consumer
services sector had the highest number of deals in the other three key markets Europe, China and India. Software and consumer information
services were the most active sub-segments for those two sectors.
While software deals accounted for close to 70% of the total number of IT deals in the three markets, consumer information deals represented
63%, 55% and 47% of total consumer services deals in Europe, China and India, respectively.
By amount invested:
Following the historical trend, the IT sector attracted a major share of VC investment in the US, Canada and Israel, accounting for 26%, 44% and
55% shares, respectively, in 2013.
The consumer services sector continues to secure the bulk of venture capital investment in Europe, India and China, indicating that venture
investors still have a healthy appetite for consumer internet companies. The sector accounted for more than a 50% share in each of the two
emerging economies; it contributed 28% of total regional proceeds in Europe.
1,034
99
718
81
651
90
791
Information technology
Industrial goods and materials
Health care
Energy and utilities
Consumer services
Consumer goods
Business and financial services
US
296
71
229
51
390
48
304
101
6
20
2
123
13
47
71
3
23
1
20
0
47
27
4
34
5
79
12
60
Europe China Israel (all site) India
By number of rounds (2013)

8,673
797
8,634
909
5,500
1,031
7,487
Information technology
Industrial goods and materials
Health care
Energy and utilities
Consumer services
Consumer goods
Business and financial services
US
1,444
288
1,850
463
2,056
118
1,170
762
75
229
26
1,902
199
348
910
70
128
30
160
0
367
53
16
280
36
890
87
405
Europe China Israel (all site) India
By amount invested (US$m) (2013)

VC investment by sector
IT and consumer services dominate the global VC investment landscape in 2013
68
8
26
8
28
5
32
Canada
454
18
136
105
125
3
201
Canada
Page 13 Venture Capital Insights 2013 year-end
Source: Dow Jones VentureSource
By number of rounds:
Companies at the revenue-generation stage continued to lead in terms of number of rounds, indicating the preference of VC investors across
all markets for these partially de-risked companies.
In 2013, activity at the start-up stage dropped from 2012 for the three key VC hotbeds US (106 from 221 deals), Europe (41 from 53
deals) and China (10 from 12 deals).
For China, the percentage of deals entered at the revenue-generation stage fell from 82% in 2012 to 78% in 2013. This is because VC activity
at the product-development stage recorded a significant improvement in the region during 2013 (accounting for 12% of total deals compared
to 7% in 2012).
By amount invested:
The revenue-generation stage continues to attract the highest percentage of VC investment across all markets. The share of investment at
the revenue-generation stage was higher than 70% in most markets. The percentage increased to more than 80% for both China and Israel in
2013.
India saw revenue-generation stage investment decline to 63% of total investment in 2013, down from 82% in 2012. However, investment
made at the profitable stage during the year was at 33%, which was significantly higher than 14% in 2013. This indicates that investors
continue to be cautious and prefer investing in companies operating at the later stages of their business cycles.
2%
2%
3%
3%
3%
3%
9%
24%
20%
12%
20%
23%
85%
70%
72%
78%
72%
70%
4%
3%
6%
7%
5%
4%
India
Israel (all site)
Canada
China
Europe
US
Start-up Product development Revenue generation Profitable
0%
0%
1%
1%
0%
1%
4%
12%
12%
5%
20%
19%
63%
85%
78%
81%
73%
75%
33%
3%
9%
14%
6%
5%
India
Israel (all
site)
Canada
China
Europe
US
Start-up Product development Revenue generation Profitable
By number of rounds (2013) By amount invested (US$m) (2013)
VC investment by stage of development
VC investors cautious; continue to make large investments at the revenue-generation stage
100%=3,477
100%=1,396
100%=176
100%=314
100%=166
100%=222
100%=33,063
100%=7,449
100%=1,044
100%=3,546
100%=1,666
100%=1,797
Page 14 Venture Capital Insights 2013 year-end
Source: Dow Jones VentureSource
Investors in China focus on later-stage investments, versus the US, where investors focus on a strategy that is more balanced throughout the life-
cycle of the company.

Median size by round class:
Second and later-stage rounds continue to see high median deal sizes across all geographies, with China recording the highest median value
in both the round classes. The median amount invested in China, however, declined from US$15.3 million in 2012 to US$10.0 million in 2013
at the second round stage, but remained at the same level (US$20.0 million) at the later stage during this period.
Across the all markets, median deal values at the seed and first round stages fell or saw no change, compared to 2012. This indicates that
investors continue to take a measured approach to earlier stage investing.

Median size by stage of development:
The profitable stage recorded the highest median deal size across geographies, indicating a willingness to invest larger amounts in companies
at the later stages of business development.
At US$45.8 million, India recorded an all-time-high median value at the profitable stage in 2013 the highest value ever seen in any market
across all of the development stages since 2007.
While median values across the different stages remained more or less in line with 2012 levels in most markets, China saw a significant drop
in its deal size at the profitable stage, with its median value falling from US$30 million in 2012 to US$10 million in 2013.
2013 median by stage of development (US$m) 2013 median by round class (US$m)

0
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Seed First round Second round Later stage
US Europe China Canada Israel (all site) India

0
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Start-up Product
development
Revenue generation Profitable
US Europe China Canada Israel (all site) India
Median deal size by round class and stage of development
Later-stage rounds were dominant across markets; India saw a particularly high median value at
profitable stage
Page 15 Venture Capital Insights 2013 year-end
Note: Chart scales vary for the purpose of clarity.
1
.
0

1
.
3

1
.
2

1
.
2

1
.
2

1
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1

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8

0
.
9

1
.
1

0
.
9

0
.
8

1
.
0

0
.
6

0
.
4

2
.
5

N
S

1
.
9

2
.
0

3
.
1

N
S

N
S

1
.
5

N
S

1
.
5

2
.
2

0
.
7

0
.
0

N
S

1
.
0

3
.
0

1
.
3

N
S

1
.
8

N
S

N
S

2
.
0

N
S

N
S

8
.
8

N
S

N
S

N
S

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
1
2
3
4
5
6
7
8
9
10
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

US Europe China Canada Israel India S&P 500
Start-up (median round size in US$m)
Activity remained low at the start-up stage across all markets. In 2013, while median
round size remained insignificant for most markets, only two markets the US and
Europe recorded considerable median sizes, although lower than 2012 levels.
Source: Dow Jones VentureSource
7
.
2

7
.
0

5
.
2

4
.
1

4
.
9

3
.
0

2
.
9

2
.
6

2
.
6

2
.
2

2
.
6

2
.
1

1
.
3

1
.
6

4
.
0

2
.
7

4
.
4

5
.
0

4
.
0

3
.
6

2
.
0

6
.
7

3
.
8

3
.
6

2
.
5

5
.
7

1
.
4

1
.
1

3
.
0

3
.
0

2
.
8

3
.
7

3
.
1

3
.
0

4
.
0
5
.
2

6
.
3

2
.
0

5
.
9

0
.
4

1
.
0

2
.
0

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
2
4
6
8
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

US Europe China Canada Israel India S&P 500
Product development (median round size in US$m)
In 2013, median rounds in Canada (US$1.1 million) and China (US$2.0 million) have
continued their decline since 2011 (when median values were US$5.7 million and
US$4.0 million, respectively). Israel recorded the highest median value during 2013.
8
.
0

7
.
0

5
.
0

5
.
0

5
.
0

5
.
0

4
.
8

2
.
4

3
.
0

2
.
1

2
.
5

2
.
3

2
.
4

2
.
0

8
.
0

7
.
6

7
.
3

8
.
8
1
0
.
0

8
.
7

8
.
0

3
.
8

6
.
0

3
.
6
5
.
3

5
.
0

3
.
1

2
.
3

4
.
3

3
.
5

3
.
0

6
.
0

9
.
2

4
.
0

4
.
7

8
.
3

8
.
0

5
.
0

7
.
5

5
.
5

4
.
0

4
.
0

0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
0
2
4
6
8
10
12
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

US Europe China Canada Israel India S&P 500
Revenue generation (median round size in US$m)
During 2013, the median round sizes were nearly the same as seen in 2012 for most
markets. The values were, however, below the levels seen in 2011.
6
.
5

8
.
2

5
.
5

7
.
6

9
.
1

6
.
3

5
.
6

2
.
5

3
.
9

2
.
8

5
.
6

3
.
9

5
.
0

3
.
3

N
S

N
S

5
.
7

6
.
7

N
S

N
S

1
0
.
0

0
.
0

0
.
0

7
.
9

1
4
.
6

0
.
0

0
.
0

6
.
2

3
.
0
8
.
3

N
S

N
S

N
S

N
S

1
0
.
0

1
0
.
3

7
.
2

7
.
3

4
.
4

8
.
0

9
.
2

4
5
.
8

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
5
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

US Europe China Canada Israel India S&P 500
Profitable (median round size in US$m)

The median round sizes in developing markets India and China, along with Israel, were
much higher than the values recorded in US and European markets in 2013. For 2013,
India recorded a particularly high median round.

Median round size by stage of development
India saw a particularly high median value at profitable stage during 2013
Page 16 Venture Capital Insights 2013 year-end
Median VC pre-money valuations by industry
US companies recorded the highest valuations in most sectors, except for the consumer services
and IT sectors in 2013.
Source: Dow Jones VentureSource
1
4

1
6

1
7

2
8

1
9

3
8

2
0

8

6

5

4

4

3

4

6
4

3
9
4
3

7
4

4
0

N
S

1
6

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10
20
30
40
50
60
70
80
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

1
1

8

1
7

7

3
2

8

1
7

8

N
S

3

2

3
7

8

4
3

6
3

5
9

6
9

N
S

N
S

N
S

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10
20
30
40
50
60
70
80
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)


1
2



1
9



1
4



1
1



1
1



1
6



6


5

6

5
8

1
4

4

2

3
5

4
1

4
5

4
2

6
2

4
5

1
0

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
-
10
20
30
40
50
60
70
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

2
8

7
0

2
8

4
3

4
3

2
5

N
S

6

1
2

7

4

1
2

2
6

N
S

N
S

9
0

4
0

8
3

N
S

N
S

N
S

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10
20
30
40
50
60
70
80
90
100
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

2
3

1
9

2
2

1
7
2
7

2
2

3
0

7

4

6

6

6
9

5

2
0
3
0
4
3

9
2

N
S

N
S

N
S

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10
20
30
40
50
60
70
80
90
100
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

1
2

1
4

1
0

2
6

1
8

3
4

6
8

6
1
0

3

3

N
S

5

3
9

3
4

3
9

7
4

7
2

N
S

N
S

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10
20
30
40
50
60
70
80
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

2
2

2
3

2
0

1
7

2
0

2
0

1
1

8
9

5

6

5

4
5

2
3

2
6

3
8
4
3
4
7

1
6

1
3

0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
5
10
15
20
25
30
35
40
45
50
2007 2008 2009 2010 2011 2012 2013
A
v
e
r
a
g
e

i
n
d
e
x

v
a
l
u
e
s

M
e
d
i
a
n

r
o
u
n
d

s
i
z
e

(
U
S
$
m
)

Business and financial services (BFSI)
Energy and utilities
Consumer goods Consumer services
Health care
Industrial goods and materials
IT
In 2013, median pre-money valuations were
the highest in the US in the health care
sector (US$30 million), in China in the
business and financial services sector
(US$16 million) and in Europe in the
consumer goods sector (US$8 million).
In the US, except for health care and
consumer goods, the median valuations in
2013 declined across sectors, when
compared to 2012. The largest decline
(US$ 34 million to US$6 million) was in the
industrial goods and materials sector for the
same period
For 2013, valuations of Chinese companies
remained considerably below historical
levels, across all sectors, as reflected by the
lowest median pre-money valuations
recorded in 2013 since 2007.
For Europe, 2013 median valuations were
in line with values recorded in 2012 in
almost all industry sectors.
US Europe China S&P 500
Venture Capital Insights 2013 year-end
Section 1.2: Global VC initial equity rounds of financing
Analysis by stage of development and round class

Page 18 Venture Capital Insights 2013 year-end
Note: Chart scales vary for the purpose of clarity.
1
8
1

2
2
3

2
0
2

1
9
2

2
3
5

1
9
9

8
7

6
0

7
4

7
5

5
6

6
7

4
5

4
0

2
1

6

1
4

9

1
6

1
0

1
0

1
1

5

5

4

8

3

4

1
1

1
2

1
1

3

4

1

3

1
0

2

3

5

5

4

3

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Start-up (by number of rounds)
In 2013, the number of initial equity rounds of financing for the US and Europe two
of the most popular hotbeds for early stage investing were at their lowest since
2007, perhaps reflecting a VC focus on exiting existing portfolio companies.
Source: Dow Jones VentureSource
Initial equity rounds of financing by stage of development
In 2013, activity in the US was below historical levels, in terms of both value and volume


3
0
8

5
9
3

3
3
4
4
7
4

4
2
9

2
4
3

2
1
6

4
6

1
1
5

6
1

6
9

1
2
0

3
4

1
2

4
0

1
6

5
3

3
8

2
1

1
4

1
2

1
7

2

1
1

5

3

1

1
3

2
1

2
4

2
0

3

3

4

4

1
2

2

1

8
2

1
7

0

1

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Start-up (by amount invested in US$m)
During 2013, despite a 54% fall in the number of initial rounds when compared to
2012, the average deal size in the US doubled to US$2.5 million versus US$1.2 million
in 2012. In the US, the average deal size in 2013 was the second highest since 2007.
5
5
6

4
8
0

3
6
9

4
4
5

4
7
0

5
2
3

4
3
4

3
4
3

2
2
7

1
8
7

2
0
0

1
5
4

1
7
5

1
8
1

1
7

3
7

1
8

2
2

2
6

1
6

2
8

1
8

1
3

1
3

1
5

1
2

2
2

2
6

7
0

3
8

2
7

1
8

1
2

1
9

2
6

1
2

1
9

9

6

1
7

2
0

1
8

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Product development (by number of rounds)
Except for the US and India, the number of initial rounds in 2013 increased across
markets compared to 2012. In fact, four markets Europe, Canada, China and Israel
reported the highest number of rounds at this stage since 2011.
3
,
1
5
2

2
,
8
1
8

1
,
7
0
5

1
,
7
8
2

1
,
6
7
2

1
,
8
6
1

1
,
5
8
4

7
8
5

5
6
4

7
7
9

4
8
4

3
6
7

2
2
3

4
2
3

4
7

1
9
0

1
0
7

1
8
7

2
2
1

5
1

3
8

6
2

2
5

4
1

3
3

3
0

4
5

4
0
4
0
9

1
0
6

6
2

4
1

2
0

5
7

7
2

4
4

7
4
3

1
5

1
5

4

1
2

5
0

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Product development (by amount invested in US$m)

Average deal sizes in Europe and India increased 2x and 5x, respectively, in 2013
compared to 2012. The average size declined by 25% and 55% in Canada and China,
respectively; however, it was nearly the same for the US and Israel,.
Page 19 Venture Capital Insights 2013 year-end
Note: Chart scales vary for the purpose of clarity.
5
4

3
9

1
0

2
5

3
2

2
5
3
3

2
4

1
3

7

1
8

3
3

1
6

3
1

9
1

7
6

6
9
7
8

2
2

8

1
4

1

1

3

1

1

1

6

1

2

0

0

1

1

0
5

5

9

2

2

0

2

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
5
0
3

5
0
5

3
2
7

4
8
9

7
3
7

8
1
1

7
7
2

5
7
5

4
7
4

3
9
5

4
9
0

4
9
2

5
1
1

5
0
3

1
5
1

1
1
9

1
1
5

1
5
0

2
0
1

1
3
4

1
3
6

4
2

2
4

1
9

2
9

4
3

5
1

6
6

2
8

2
5

1
2

8

1
5

1
6

2
9

4
4

6
5

3
7

5
7

8
9

1
1
8

1
0
5

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Revenue generation (by number of rounds)
The historical trend for the revenue generation stage recorded the highest number of
initial rounds for the development stages in 2013. The US continues to lead ,followed
by Europe, although volume in both markets fell in 2013 over 2012.
Profitable (by number of rounds)
In 2013, the number of initial rounds nearly doubled in China, compared to 2012.
The Chinese market has recorded the highest number of initial rounds from 2007
2010 for all geographies; however, that trend has been declining since 2011.
Source: Dow Jones VentureSource
Initial equity rounds of financing by stage of development
Activity remained softer in most markets in 2013 compared to 2012 levels

3
,
1
6
0

3
,
0
4
3

1
,
9
6
6

2
,
3
3
3

2
,
9
2
1

3
,
2
4
5

2
,
5
6
0

1
,
3
9
2

1
,
3
4
8

6
6
6

1
,
1
2
5

1
,
4
4
2

1
,
0
9
0

1
,
1
2
7

1
,
1
6
8

8
4
3

5
8
1
1
,
1
5
9

1
,
2
7
9

1
,
4
7
0

5
5
1

1
7
0

1
0
0

6
7

1
7
5

1
8
1

1
7
4

1
2
0

1
0
2

6
6

2
0

2
8

7
0

4
9

7
5
4
4
6

4
2
5

1
3
4

2
6
4

3
9
3

4
4
6

2
5
7

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Revenue generation (by amount invested in US$m)

Activity remained soft across markets in 2013 compared to 2012, except for Europe
and Israel. Although China reported the largest decline (63% drop) in 2013, the
average deal size was still the highest for China (US$4.1 million), across markets.
5
9
0

3
9
9

3
1
4

3
3
6

7
8
7

2
5
1

1
3
6

8
1

5
1

1
7

1
3
6

2
2
1

1
1
4

9
2

5
6
7

6
5
6

6
5
2

7
2
7

3
6
7

2
0
5

1
8
3

5

2
1

1
7

1

8
0

4
1

1

1
3

1

1
4
7

2
1

3
6

8

9

4

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Profitable (by amount invested in US$m)

The activity continued to decline further in 2013 in the three major VC markets the
US, Europe and China. The year 2013 marked Chinas return to the top position since
2011, when the US took over the lead in terms of amount invested.
Page 20 Venture Capital Insights 2013 year-end
Note: Chart scales vary for the purpose of clarity.
2
1
2

2
0
5

1
7
9

2
6
3

4
1
9

4
5
8

3
5
5

9
7

9
6

9
1

8
6

1
1
4

1
5
7

1
3
5

1
1

5

3

8

1
7

2
1

2
2

1
1

6

6

7

1
2

1
9

2
6

1
8

1
5

1
4

6

8

5

1
2

7

3

3

4

1
1

1
7

1
3

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
9
8
4

9
6
8

6
8
8

8
4
3

1
,
0
0
8

1
,
0
3
4

9
7
2

7
8
0

6
5
4

5
2
2

6
2
6

5
9
0

5
7
6

6
1
9

2
2
2

1
8
7

1
5
3

1
8
3

2
0
7

1
2
2

1
6
1

5
4

3
2

2
8

3
7

4
7

5
3

7
3

8
1

5
7

3
5

2
4

2
2

3
3

4
8

5
4

7
5

5
3

5
4

8
4

1
2
1

1
0
5

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Seed round (by number of rounds)

First round (by number of rounds)
The first round continued to dominate, with the highest number of initial financing
rounds recorded across geographies.
After seeing an increase for the past three years in the number of initial rounds
invested, the US and Europe dropped in 2013. However, the volumes still remain
significantly higher than 2010 levels.
Source: Dow Jones VentureSource
Initial equity rounds of financing by round class
Despite slow activity in the US, the average deal size in the region primarily remained in line with
2012 levels

1
3
3

1
3
0

1
0
4

1
8
8

2
9
1

2
8
3

2
2
1

5
2

7
2

4
9

5
3

6
1

6
3

5
2

1
3

4

2

1

1
2

6

1
1

8

4

1

7

1
2

7
2
2

2
0

6

7

4

7

7

9

5

1

1

3

1

4

2

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
6
,
1
8
1

6
,
0
6
1

3
,
6
1
9

4
,
4
9
1

4
,
7
5
7

4
,
7
3
5

4
,
3
8
2

1
,
9
2
4

1
,
8
4
6

1
,
3
9
6

1
,
6
4
4

1
,
9
8
7

1
,
3
6
6

1
,
5
8
4

1
,
4
3
6

1
,
3
1
0

7
3
7

1
,
3
5
0

1
,
4
3
4

9
1
8

5
8
9

2
3
1

1
1
5

1
1
7

2
0
1

1
6
7

2
0
6

1
8
1

5
2
1

2
2
6

9
7

9
3

7
7

1
2
0

1
5
3

4
0
5

1
,
0
9
8

1
7
6

2
9
1

3
2
4

2
6
1

2
4
1

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Seed round (by amount invested in US$m)
First round (by amount invested in US$m)
In 2013, the average deal sizes for most VC markets were more or less in line with
2012 levels. However, average value in Canada and China declined by 36% and 51%,
respectively, during the same period.
The average deal sizes for US (US$0.6 million) and Europe (US$0.4 million) largely
remained unchanged in 2013 when compared to 2012, despite a fall in number of
rounds.
Page 21 Venture Capital Insights 2013 year-end
Note: Chart scales vary for the purpose of clarity.
0
2

0

0
2

1
4

4
2

0

0

0

1
9

3
7

1
5

1
2

1
2

0

1
2

0

0

3
0

0

0

0

0

0

0

0

0

2

0

2

0

1
0

0

0

0

7

0

0

0

0

0

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
1
,
0
2
7

6
9
5

6
4
5

3
9
2

7
6
7

6
8
6

4
9
3

3
9
5

2
2
6

1
3
6

1
3
4

1
5
6

7
9

1
4
4

3
7
7

4
3
2
6
4
4

7
6
3

4
5
3

7
8
9

2
3
4

1
6

1
1

2
1

3
1

4
6

1
0
9

1
6

2
4

2

0

0

4

0

0

1
4
2

8
2

2
4

8
1

1
0
1

2
0
9

7
2

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Second round (by amount invested in US$m)

Later stage (by amount invested in US$m)

Average deal sizes in 2013, recorded a steep decline from 2012 in Canada (from
US$27.2 million to US$2.3 million), China (from US$30.4 million to US$21.3
million) and India (from US$19.0 million to US$6.6 million).
Since 2011, the amount invested in the US continued its upward trajectory to
reach US$42 million in 2013. However, VC activity in Europe saw a consistent
decline in terms of amount invested in Europe, during the same period.
Source: Dow Jones VentureSource
Initial equity rounds of financing by round class
Second round continued to record the lowest activity across round classes
0

1

0

0

1

3

8

0

0

1

2

4

3

6

1

0

1

0

0

1

0

1

0

0

0

1

0

0

1

0

1

0

2

0

0

0

1

0

0

0

0

1

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
7
6

6
1

2
9

3
5

5
1

5
7

3
8

6
6

3
4

4
1

3
6

3
5

2
3

2
0

4
4

4
6

5
9

7
0

3
7

2
6

1
1

2

4

4

6

4

4

7

6

3

1

0

1

0

0

1
0

9

4

1
0

1
3

1
1

1
1

2007 2008 2009 2010 2011 2012 2013
US Europe China Canada Israel India
Second round (by number of rounds)


Later stage (by number of rounds)


During 2013, the number of initial rounds declined or remained the same across
markets, compared to 2012, except Canada (the volume increased from 4 to 7
during the same period).
In 2013, the number of initial financings recorded in the second round increased
for the US and Europe compared to 2012, although the activity remained
significantly lower than that seen for other round classes.
Venture Capital Insights 2013 year-end
Section 1.3: Global VC fundraising activity
Analysis by geography
Page 23 Venture Capital Insights 2013 year-end
VC fundraising activity
Early-stage fundraising activity remained strong in the US in 2013
Source: Dow Jones VentureSource
Amount closed (US$ b) (200713 )
Number of final closings (2007-13)
123
127
85
105
96
118
153
67
51
38
28
42
48
32
24
28
39
54 78
48
37
2007 2008 2009 2010 2011 2012 2013
US Europe Asia-Pacific
20
19
9
10
17
20
17
4
11
3
4
1 2 3
1
6
2
2
7
1
0
2007 2008 2009 2010 2011 2012 2013
US Europe Asia-Pacific
73 67
48
49
48
42
31
54
62
31
26
25
23 23
36
48
50 50
38
36
23
2007 2008 2009 2010 2011 2012 2013
US Europe Asia-Pacific
Early-stage Late-stage Multistage
Early-stage Late-stage Multi-tage
14.4
12.0
6.4 6.3 6.2 6.2
9.4
5.7
5.1
2.4
1.7 2.3
3.4
2.2
2.5
2.0
1.8 4.1
10.7
3.6
1.2
2007 2008 2009 2010 2011 2012 2013
US Europe Asia-Pacific
8.5
4.2
0.9
2.7
5.6
5.1
4.5
0.3
0.9
0.2
0.2
0.1
0.2
0.4
0.0
1.0
0.1
0.0
1.5
0.2
0.0
2007 2008 2009 2010 2011 2012 2013
US Europe Asia-Pacific
15.9
13.3
7.3
8.1 8.3
10.2
5.0
3.3
4.3
2.8
2.0 2.5
1.3
2.2
3.2
5.4
4.8
3.0
6.3
2.8
2.4
2007 2008 2009 2010 2011 2012 2013
US Europe Asia-Pacific
In 2013, 153 early-stage funds in the US raised US$9.4 billion, the highest total since 2009, both in terms of value and volume. This suggests, US investors will be able to make
more investments in early-stage companies in 2014 and beyond. The fundraising activity for late and multistage focused funds was lower compared to last year.
In Europe, while VC fundraising activity at early stage softened in 2013, both in terms of value and volume, there was stability in the other two stages compared to 2012.
For the Asia-Pacific region, fundraising activity continued its downward trajectory begun in 2011 for early-stage and multistage categories, and there was no late-stage activity in
2013. Compared to 2012, the average fund size at early-stage dropped by almost 50% to US$33 million in 2013, and for multistage the average size saw a 31% increase to reach
US$104 million.
Venture Capital Insights 2013 year-end
Section 2: Angel and incubator participation trends
Analysis by geography and stage of development

Page 25 Venture Capital Insights 2013 year-end
Section 2: Angel and incubator participation trends
Summary

Participation of angel investors and incubators continues to increase globally
While historically the percentage of angel/incubator participation has been the highest in the US (12% in 2013),
the trend is quickly catching up in other markets. For the last two years, the percentage of angel/incubator
participation has been the highest in Canada (20%), followed by India (17%).
However, Israel and China are two countries that have the lowest angel/incubator participation in overall VC
investment.

One in every four start-up stage VC rounds in the US and Europe in 2013 was by an angel investor
or incubator
In the US and Europe, the start-up stage of VC rounds saw maximum participation by an angel investor or
incubator in 2013, with a significant increase in the angel/incubator participation rate at the start-up stage to 25%
and 27% from 15% and 9% in 2010, for US and Europe, respectively. However, the percentage share at subsequent
stages of development was far lower for these regions.
The highest angel/incubator participation in Canada in 2013 was at the product development stage (34%) and not
at start-up stage, unlike other geographies.
In China, at the revenue generation stage, there was a significant increase in angel/incubator participation (9 out
of 244 rounds in 2013 as compared to just 4 out of 213 rounds in 2012).
In Israel and India, the only two development stages that are attracting some interest from angel investors and
incubators are product development and revenue generation, with no angel/incubator participation in the regions
for start-up stage since 2010.


Page 26 Venture Capital Insights 2013 year-end
97
139
113
168
249
229
213
35
36
30
50
121
191
205
2007 2008 2009 2010 2011 2012 2013
US
3,132 3,081 2,786 3,161 3,599 3,648 3,479
Source: Dow Jones VentureSource
Angel/incubator participation trends
Participation of angel investors and incubators continues to increase globally
Total
number
of rounds
46
61
52 55
60
69
79
6
16
8
6
11
29
67
2007 2008 2009 2010 2011 2012 2013
Europe
1,758 1,479 1,288 1,411 1,322 1,320 1,395
Total
number
of rounds
3
2
5
14
1
2
3
2007 2008 2009 2010 2011 2012 2013
China
396 362 315 388 404 261 314
Total
number
of rounds
3
2
3 3
7
1
2
1 3
2007 2008 2009 2010 2011 2012 2013
Israel
195 172 119 94 92 94 123
Total
number
of rounds
3
4
2
5
24
19
1
2
18
2007 2008 2009 2010 2011 2012 2013
India
97 119 95 116 180 227 222
Total
number
of rounds
Angel participation Incubator/accelerator participation
Historically, the percentage of angel/incubator participation has been the highest in the US (12% in 2013). However, the trend is quickly catching up
in other markets, reflected by their increasing percentage share of angel/incubator participation in 2013 over 2012.
Over the last two years, the percentage of angel/incubator participation has been the highest in Canada (20% in 2013), followed by India (17% in
2013). However, Israel and China are two countries with the lowest angel/incubator participation in overall VC investment.

No angel/incubator
participation
No angel/
incubator
participation
2
3
2
5
8
13
20
3
3
3
4
9
16
2007 2008 2009 2010 2011 2012 2013
Canada
140 109 88 113 141 143 176
Total
number
of rounds
Page 27 Venture Capital Insights 2013 year-end
11
25
16 17
31
13
7
15
15
13
16
34
45
20
2007 2008 2009 2010 2011 2012 2013
Start-up
190 237 226 218 262 221 106
Source: Dow Jones VentureSource
Total
number
of rounds
27
46
51
68
89
64
46
9
14
8
18
53
68
96
2007 2008 2009 2010 2011 2012 2013
Product development
1,086 1,049 940 1,075 1,031 943 807
Total
number
of rounds
54
65
45
80
120
148 155
10
6
9
15
33
76
87
2007 2008 2009 2010 2011 2012 2013
Revenue generation
1,649 1,605 1,492 1,737 2,147 2,342 2,433
Total
number
of rounds
5
3
1
3
9
4
5
1
1
1
1
2
2
2007 2008 2009 2010 2011 2012 2013
Profitable
203 182 119 129 152 137 130
Total
number
of rounds
2
3 3
5
2
3
1
4
2
1
2
7
11
2007 2008 2009 2010 2011 2012 2013
Start-up
65 78 80 66 72 53 41
Total
number
of rounds
17
22
18
14 14
18
12
3
5
2
3
3
7
23
2007 2008 2009 2010 2011 2012 2013
Product development
539 406 344 358 278 276 279
Total
number
of rounds
26
34
31
36
39
46
64
1
7
4
2
6
15
32
2007 2008 2009 2010 2011 2012 2013
Revenue generation
1,045 914 823 922 895 936 1,003
Total
number
of rounds
1
2
5
2
3 1
1
2007 2008 2009 2010 2011 2012 2013
Profitable
108 80 41 65 76 55 72
Total
number
of rounds
In 2013, around 25% of VC rounds in the US and Europe at start-up stage were by an angel or incubator; however, the percentage share was far lower
at all other subsequent stages of development.
In the US, the angel/incubator participation at the start-up stage has increased significantly from 15% in 2010 to 25% in 2013. In Europe, too, the
uptrend since 2010 continued through 2013, with angel/incubator participation growing from 9% in 2010 to 27% in 2013.
Angel/incubator participation by stage of development
In the US and Europe, one in every four VC rounds at start-up stage in 2013 is by an angel
investor or incubator
US
Europe
No angel/
incubator
participation
Angel participation Incubator/accelerator participation
Page 28 Venture Capital Insights 2013 year-end
Source: Dow Jones VentureSource
1 1
2
1
1
2007 2008 2009 2010 2011 2012 2013
Start-up
19 6 13 9 16 12 10
Total
number
of rounds
1 1
4
2007 2008 2009 2010 2011 2012 2013
Product development
25 39 24 29 37 17 37
Total
number
of rounds
1 1
3
8
1
1
1
2007 2008 2009 2010 2011 2012 2013
Revenue generation
217 185 166 228 299 213 244
Total
number
of rounds
1 1
2007 2008 2009 2010 2011 2012 2013
Profitable
135 132 112 122 52 19 23
Total
number
of rounds
Unlike other geographies, the highest angel/incubator participation in Canada in 2013 was at product development stage and not at start-up stage.
Overall, the country recorded the highest angel/incubator participation among the other geographies for the last two years.
In China, only six out of 85 start-up stage rounds since 2007 involved angel investors or incubators. At the revenue generation stage, there was a
significant increase in angel/incubator participation (9 out of 244 rounds in 2013 as compared to just 4 out of 213 rounds in 2012).
Angel/incubator participation by stage of development
Canadian companies continue to attract significant angel/incubator interest
China
No angel/incubator
participation
No angel/incubator
participation
No angel/incubator
participation
No angel/incubator
participation
No angel/
incubator
participation
Angel participation Incubator/accelerator participation
1 1 1 1 1
1
2
1
1
2007 2008 2009 2010 2011 2012 2013
Start-up
12 6 8 6 8 3 5
Total
number
of rounds
1 1
3
2
1
4 2
1
1
6
8
2007 2008 2009 2010 2011 2012 2013
Product development
40 29 22 29 34 33 35
Total
number
of rounds
1 1 1
6
11
16
2
1
2
1
2
6
2007 2008 2009 2010 2011 2012 2013
Revenue generation
86 72 51 70 96 104 126
Total
number
of rounds
1
2007 2008 2009 2010 2011 2012 2013
Profitable
2 2 7 8 3 3 10
Total
number
of rounds
Canada
No angel/incubator participation
No angel/
incubator
participation
Page 29 Venture Capital Insights 2013 year-end
2
2007 2008 2009 2010 2011 2012 2013
Start-up
11 12 11 3 6 2 4
Source: Dow Jones VentureSource
Total
number
of rounds
1
5
2
1
2
2007 2008 2009 2010 2011 2012 2013
Product development
101 80 55 52 36 33 38
Total
number
of rounds
3
2
3
2
1 1
2007 2008 2009 2010 2011 2012 2013
Revenue generation
78 74 52 36 47 56 77
Total
number
of rounds
2007 2008 2009 2010 2011 2012 2013
Profitable
5 6 1 3 3 3 4
Total
number
of rounds
2
1
2007 2008 2009 2010 2011 2012 2013
Start-up
11 2 4 5 5 4 4
Total
number
of rounds
1
2
3
1
1
2
8
2007 2008 2009 2010 2011 2012 2013
Product development
18 26 14 10 19 24 21
Total
number
of rounds
1
3
1
3
21
18
10
2007 2008 2009 2010 2011 2012 2013
Revenue generation
63 84 63 95 151 193 189
Total
number
of rounds
2007 2008 2009 2010 2011 2012 2013
Profitable
5 7 14 6 5 6 8
Total
number
of rounds
In Israel and India, product development and revenue generation are the only two development stages that are attracting some interest from angel
investors and incubators.
In Israel, there was a significant improvement in 2013, when angels/incubators participated in 5 out of 123 rounds, across development stages,
compared to just 1 out of 94 rounds in 2012.
Angel/incubator participation by stage of development
Israel and India are yet to see any angel/incubator participation at start-up stage since 2010
Israel
India
Angel participation Incubator/accelerator participation
No angel/incubator participation
No angel/incubator participation
No angel/incubator participation
N/A
N/A N/A N/A
N/A
N/A
N/A N/A N/A N/A
Venture Capital Insights 2013 year-end
Section 3: Global VC exit landscape through IPOs and M&As
Analysis by median amount raised, median time from initial financing to exit and exit ratio quartile


Page 31 Venture Capital Insights 2013 year-end
Section 3: Global VC investment activity
Summary

US and Chinese markets remain popular with VC investors looking to exit through IPO route
The US and China continue to be the most active markets for venture-backed IPOs in 2013, although the amount
raised through IPO exits fell significantly in both the markets.
In the US, despite nearly a 50% increase in volume, the amount raised fell by 27% in 2013 over 2012. For China,
the IPO exit volumes dropped to levels last seen in 2008, primarily due to a year-long IPO ban in the country.
In the US, the median amount raised prior to IPO in 2013 was a substantial $100.9 million.
While in the US, time to IPO exit in 2013 marginally came down compared to 2012, for Chinese companies median
time to IPO exit went up significantly from 2.4 to 3.9 years.
Chinese VC-backed companies surpassed US companies in terms of median pre-IPO valuations in 2013.
IPO exit ratios have continued to fall further in the US and China since 2011. Among the US, Europe and China,
Europe was the exception, where 50
th
and 75
th
percentile exit ratios went up in 2013 compared to 2012, primarily
due to higher valuations in Europe for VC-backed IPOs in 2013.

M&A exit ratios in 2013 improved across the US, Europe and Israel on the back of improved
valuations and early exits
Global economic uncertainty continued to impact M&A exits as reflected by declining numbers across markets,
except for China.
Among the US, Europe and Israel, the US saw the lowest exit ratio quartiles in 2013. For Israel, the third quartile
exit ratio was 48.3, the highest in recent years.
Except for the US, the median pre-money valuations were significantly higher than year-ago levels across markets.
During 2013, the median valuations achieved recent high levels in Europe, China, Israel and India, indicating VC
investment outlook largely remains positive in these markets.
The median amount raised prior to M&A and median time to M&A exit declined in 2013 compared to 2012 for most
VC markets the exceptions being China and Canada.

Page 32 Venture Capital Insights 2013 year-end
9
2
0 0
1
1
1
9
0
2
2
2
0
2
2
2
0
6
2 2
1
2007 2008 2009 2010 2011 2012 2013
Canada Israel India
0.4
0.0
0.0 0.0
0.1
0.0 0.0
0.1
0.0 0.0
0.0 0.0
0.0
0.2
0.2
0.2
0.0
0.5
0.0
0.0
0.0
2007 2008 2009 2010 2011 2012 2013
Canada Israel India
80
8
8
47
46
50
74
46
10
3
18
15 16 15
26
12
45
141
99
46
15
2007 2008 2009 2010 2011 2012 2013
US Europe China
Amount raised through IPO exits (US$b). Proceeds only include new shareholders.
US and China continue to be the most active markets for VC-backed IPOs in 2013, although the amount raised through IPO exits fell significantly in both
geographies. Notably, for the US, the average listing size also decreased from US$224 million in 2012 to US$111 million in 2013. Biopharmaceuticals and
the consumer information services sector, respectively, drove the IPO activity in the US and China, in terms of both value and volume
Encouraging economic conditions supported a sudden increase in the number of venture-backed IPOs in the US. For China, however, the IPO exit volumes
dropped to levels last seen in 2008, primarily due to the year-long IPO domestic exchange ban in the country.
Number of IPO exits
Global VC-backed IPOs
The US and Chinese markets remain popular with VC investors looking to exit via IPO


7.5
0.6
0.9
3.2
5.3
11.2
8.2
1.1
0.0
0.2
0.6
1.0
0.5 0.6
3.3
0.6
4.5
22.0
15.6
4.4
2.0
2007 2008 2009 2010 2011 2012 2013
US Europe China
Source: Dow Jones VentureSource
Note: Chart scales vary for the purpose of clarity.
Page 33 Venture Capital Insights 2013 year-end
Median amount raised prior to IPO (US$m)
Median pre-IPO valuation (US$m)
Source: Dow Jones VentureSource
6.8
8.7
7.9 8.0
6.4
7.3
6.8
6.4
8.1
NS
3.8
9.2
6.2
6.3
1.8
3.8
2.3
2.6
2.5 2.4
3.9
2007 2008 2009 2010 2011 2012 2013
US Europe China
Median time from initial VC financing to IPO exit (in years)
306.9
237.8
382.9
296.3
457.2
362.2
289.3
66.0
8.2
NS
41.7
51.9
27.2
85.6
452.7
112.0
229.6
358.0
365.3
225.1
398.6
2007 2008 2009 2010 2011 2012 2013
US Europe China
In the US, the median amount raised prior to IPO in 2013 was a
substantial $100.9 million. Among the US, European and Chinese
companies, the US companies continued to raise the highest
amounts of VC funding before exiting via the capital markets.
With the Chinese stock exchanges closed for new IPOs for most of
the year, the median time from initial VC financing to IPO exit
increased to close to 4 years in 2013 from 2.4 years in 2012. In the
US, time to IPO exit in 2013 decreased marginally compared to
2012.
In terms of median pre-IPO valuations, Chinese VC-backed
companies surpassed US companies, recording a median pre-IPO
valuation of around US$400 million in 2013. The US continued the
downtrend from 2012, while there was a trend reversal in both
China and Europe.
64.4
48.6
42.5
72.1
82.8
78.4
100.9
7.2
3.0
NS
21.5 22.4
23.9
26.4
18.2
3.7 5.0 6.9 5.9 7.4
46.1
2007 2008 2009 2010 2011 2012 2013
US Europe China
Global VC-backed IPOs
In China, IPO exits declined in 2013 while pre-IPO valuations and amount raised pre-IPO went up

Page 34 Venture Capital Insights 2013 year-end
IPO exit ratio quartiles US
IPO exit ratio quartiles China
Source: Dow Jones VentureSource
3.2
2.3
10.3
2.3
3.6
2.9
2.6
6.1
4.8
13.5
4.1
8.7
5.8
3.6
11.1
9.0
16.3
8.7
15.9
12.3
6.1
2007 2008 2009 2010 2011 2012 2013
25th quartile 50th quartile 75th quartile
3.9
1.3
7.9
2.4
3.4
2.7 2.3
8.3
3.0
9.5
3.7
5.5
3.6
5.5
15.2
4.7
11.1
7.0
8.4
5.6
12.0
2007 2008 2009 2010 2011 2012 2013
25th quartile 50th quartile 75th quartile
IPO exit ratio quartiles Europe
10.8
18.0
31.7
33.0
42.2
27.6
9.1
43.1
42.0
83.0
63.9
80.1
37.7
12.0
110.5
71.1
157.3
181.3
144.8
66.9
17.1
2007 2008 2009 2010 2011 2012 2013
25th quartile 50th quartile 75th quartile
In the US, IPO exit ratios continued to fall further since 2011 levels
in 2013, primarily due to a considerable drop in the amount of IPO
valuation but significant increase in amount raised pre-IPO.
China reported a similar situation as the US in 2013. Exit ratios in
China hit a new low, with exit quartiles recording a steady decline
since 2011
Among the US, Europe and China, Europe was the exception, where
50
th
and 75
th
percentile exit ratios went up in 2013 compared to
2012. This was in line with higher valuations in Europe for VC-
backed IPOs in 2013. Total amount raised through VC-backed IPOs
in Europe was US$643 million, up from US$494 million in 2012.
Global VC-backed IPOs
IPO exit ratios continue to fall further since 2011 levels in the US and China
Page 35 Venture Capital Insights 2013 year-end
37
30
29
34
24 28
28
24 24
18
19
18
19
10
10
2
6
17
6
16 13
2007 2008 2009 2010 2011 2012 2013
Canada Israel India
28.0
NS
29.3
35.0
156.4
70.0
100.0
33.0
50.0
25.5
35.0
30.0
24.9
143.1
NS NS NS
27.0
NS
18.4
46.5
2007 2008 2009 2010 2011 2012 2013
Canada Israel India
526
448 429
593
562
490
436
329
251
204
217 216
162 157
10 9
14
18
11
11
20
2007 2008 2009 2010 2011 2012 2013
US Europe China
M&A median pre-money valuation (US$m)
Except for the US, the median pre-money valuations were significantly higher than year-ago levels across markets in 2013. During 2013, the median valuations
achieved recent high levels in Europe, China, Israel and India, indicating that the VC investing outlook largely remains positive in these markets.
Global economic uncertainty continues to impact M&A exits, reflected by declining numbers across all markets, except for China. The number of exits increased
from 11 in 2012 to 20 in 2013 in China.
Number of M&A exits
Global VC-backed M&As
M&A median pre-money valuations were the highest since 2007, for most VC markets
58.3
31.5
25.0
37.8
60.0 60.0
57.5
24.9
27.3
24.8 23.0
40.5
26.7
63.8 67.5
0.0
27.6
61.4
80.0
33.0
87.5
2007 2008 2009 2010 2011 2012 2013
US Europe China
Source: Dow Jones VentureSource
Note: Chart scales vary for the purpose of clarity.
Page 36 Venture Capital Insights 2013 year-end
5.2
5.1
5.9
7.1
4.4
6.7
3.3
7.5
4.2
8.6
9.7
6.7
7.5
5.9
5.9
NS
4.2
3.5
4.1 4.0
2.5
2007 2008 2009 2010 2011 2012 2013
Canada Israel India
6.5
5.8
5.5
5.3
5.3
5.2
5.0
6.5
6.7
5.5
5.7
5.5 5.9
6.3
3.5
3.7
3.4
3.8
4.1
4.4
3.5
2007 2008 2009 2010 2011 2012 2013
US Europe China
Median amount raised prior to M&A (US$m)
Historically, the median amount raised prior to M&A has been the highest in the US, followed by Israel. In the US, Europe, Israel and India, the median
values have declined compared to 2012.
Since 2010, the median time from initial VC financing to exit continued to be the highest for Israeli companies. However, median time in Israel came down
in 2013 compared to 2012 levels, in line with all other geographies other than Europe.
Median time from initial VC financing to M&A exit (in years)
Source: Dow Jones VentureSource
20.2
19.9
19.7
19.0
15.6
16.8
11.4
4.4
3.9
4.8 4.8
5.7
7.1
5.5
15.3
9.0
9.6
13.5
12.8
3.0
10.2
2007 2008 2009 2010 2011 2012 2013
US Europe China
5.7
10.0
11.3
8.7
6.8
7.5
10.0
12.8 11.4
20.6
17.9
13.2
14.7
6.8
9.5
NS NS
5.7
15.1
5.5
3.0
2007 2008 2009 2010 2011 2012 2013
Canada Israel India
Global VC-backed M&As
Median amount raised prior to M&A and median time to M&A exit declined in 2013 compared to
2012
Note: Chart scales vary for the purpose of clarity.
Page 37 Venture Capital Insights 2013 year-end
M&A exit ratio quartiles US
M&A exit ratio quartiles Israel
Source: Dow Jones VentureSource
0.9
0.4
0.4
0.6
1.3 1.3 1.3
2.7
1.6
1.3
1.8
3.6
3.3
3.6
6.2
5.3
5.3
5.3
7.5
8.3 8.5
2007 2008 2009 2010 2011 2012 2013
25th quartile 50th quartile 75th quartile
1.5
2.0
1.2
2.1
1.2
1.9
3.0
3.2
4.1
2.9
3.7
4.4
2.6
5.4 7.0
9.7
7.1 6.2
12.0
5.0
12.1
2007 2008 2009 2010 2011 2012 2013
25th quartile 50th quartile 75th quartile
M&A exit ratio quartiles Europe
2.6
2.7
0.4
0.5
0.7 0.9 4.5
5.1
5.5
0.9
1.9
1.5
4.6
15.0
6.1
40.2
5.1
4.4
6.0
19.5
48.3
2007 2008 2009 2010 2011 2012 2013
25th quartile 50th quartile 75th quartile
Looking at the last three years of data for median M&A exit ratios,
VC-backed companies in the US had been valued about 3.5 times on
the funds raised prior to executing their M&A. In 2013, the median
exit ratio was just slightly up from 2012.
Among the US, Europe and Israel, the US saw the lowest exit ratio
quartiles in 2013.
Historically, Israel has recorded higher exit ratios than those in the
US and Europe. In 2013, the third quartile exit ratio was as high as
48.3, the highest in recent years.
Global VC-backed M&As
M&A exit ratios in 2013 improved across the US, Europe and Israel on the back of improved
valuations and early exits

Venture Capital Insights 2013 year-end
Section 4: Top 10 VC investors in last 365 days
Analysis by amount invested and number of investments


Page 39 Venture Capital Insights 2013 year-end
Investor
Number of
investment
rounds
Amount
invested
(US$m)
Acquired/merged
companies (as a
percentage of
total)
Publicly held
companies (as a
percentage of total)
Year founded
Kleiner Perkins Caufield & Byers 71 1,920 25% 25% 1972
Accel Partners 73 1,671 35% 14% 1983
Andreessen Horowitz 81 1,660 8% 3% 2008
Sequoia Capital 89 1,539 27% 19% 1972
Bessemer Venture Partners 53 1,440 37% 17% 1971
New Enterprise Associates 72 1,386 32% 19% 1978
Index Ventures 62 1,322 25% 6% 1992
Greylock Partners 51 1,269 39% 23% 1965
Google Ventures 80 1,160 9% 2% 2009
Institutional Venture Partners 21 1,110 38% 26% 1980
Notes:
(1) Sector focus: software for all investors except for Index Ventures, for which it is consumer information services
(2) Round class focus: first round for all investors except for Institutional Venture Partners, for which it is second round
Top 10 VC investors
By amount of investment in last 365 days through 13 February 2014
Source: Dow Jones VentureSource
Page 40 Venture Capital Insights 2013 year-end
Investor
Number of
investment
rounds
Amount
invested
(US$m)
Acquired/merged
companies (as a
percentage of total)
Publicly held
companies (as a
percentage of total)
Year founded
500 Startups LP 133 206 9% 0% 2010
Sequoia Capital 89 1,539 27% 19% 1972
Andreessen Horowitz 81 1,660 8% 3% 2008
Google Ventures 80 1,160 9% 2% 2009
Accel Partners 73 1,671 35% 14% 1983
New Enterprise Associates 72 1,386 32% 19% 1978
Kleiner Perkins Caufield &
Byers
71 1,920 25% 25% 1972
Intel Capital 69 937 35% 10% 1991
Index Ventures 62 1,322 25% 6% 1992
First Round Capital 59 635 23% 0.5% 2004
Notes:
(1) Sector focus: software segment for all investors except for 500 Startups LP, Index Ventures and First Round Capital, for which it
is consumer information services
(2) Round class focus: first round for all investors except for Intel Capital, for which it is second round
Top 10 VC investors
By number of investments in last 365 days through 13 February 2014
Source: Dow Jones VentureSource
Page 41 Venture Capital Insights 2013 year-end
Appendix: definitions and sector classification
Definitions

Incubators:
Incubators are organizations, public or private, that support
the entrepreneurial process and in general try to increase
the survival rate for innovative start-up companies. The
primary purpose of the incubator is to invest in privately
held companies.

Angel Investors:
An angel group is defined as a group of accredited
investors that make investment decisions based on the
consensus of the membership.
Sector Sub-sector
Business and financial services Business support services
Construction and civil engineering
Financial institutions and services
Wholesale trade and shipping
Consumer goods Food and beverage
Household and office goods
Personal goods
Vehicles and parts
Consumer services Consumer information services
Media and content
Retailers
Travel and leisure
Energy and utilities Non-renewable energy
Renewable energy
Utilities
Health care Biopharmaceuticals
Health care services
Medical devices and equipment
Medical software and information services
Industrial goods and materials Aerospace and defense
Agriculture and forestry
Machinery and industrial goods
Materials and chemicals
Information technology Communications and networking
Electronics and computer hardware
Semiconductors
Software
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