Tech Cities Report

Venture Capital Funding

OVERVIEW TECH METRICS

• Top investments by industry in 2016 were software, pharma & biotech, health care devices & supplies, commercial services, and health care services & systems. • Regarding funding stages, it was somewhat of a mixed bag: -- The average VC round for the angel/seed category has climbed each year since 2011; the number of deals, however, did decline from 2015 to 2016. -- The average size of early-stage VC funding climbed in 2016 as well; like the angel/seed category above, though, the number of deals declined. -- Regarding later stage VC funding, both the average size of the deal and the number of deals declined in 2016. It was the first year-over-year decline in size since 2013. • VC-backed exits were down from 2015 to 2016 across all major methods — whether acquisition, IPO, or buyout. Total exits fell to 1,152 from 1,507 year-over-year.

U.S. HISTORICAL VC FUNDING Source: PitchBook

$23.4B

$25

$19.9B

One or two major VC transactions can greatly influence the activity by quarter – a lack of major deals in Q4 2016 resulted in a sharp decline.

$16.7B

$20

$14.1B

$15

$9.3B

$6.4B

$10

THE TECH 25

$5

$0

Q1 2007

Q3 2007

Q1 2008

Q3 2008

Q1 2009

Q3 2009

Q1 2010

Q3 2010

Q1 2011

Q3 2011 Deal Value ($B) Q1 2012

Q3 2012

Q1 2013

Q3 2013

Q1 2014

Q3 2014

Q1 2015

Q3 2015

Q1 2016

Q3 2016

Q1 2017

9