2008 Venture Capital Fundraising Activity Slows in First Quarter

NEW YORK, April 14 /PRNewswire-FirstCall/ -- Fifty-seven venture capital firms raised $6.3 billion in the first quarter of 2008 according to Thomson Financial and the National Venture Capital Association (NVCA). The number of funds raised in the first quarter of 2008 decreased by 31% from the same period in 2007 while the dollar value remained unchanged.

                 Fundraising by Venture Funds, 2002-1Q 2008*

                               Venture Capital

    Year/Quarter               Number of Funds       Venture Capital ($M)

    2003                             152                   10,629.2
    2004                             211                   19,144.3
    2005                             231                   28,396.9
    2006                             233                   31,757.1
    2007                             248                   35,855.4
    YTD 2008                         57                    6,264.5
    1Q'06                            75                    6,584.8
    2Q'06                            79                    14,245.2
    3Q'06                            68                    5,390.3
    4Q'06                            67                    5,536.8
    1Q'07                            83                    6,214.7
    2Q'07                            84                    9,136.1
    3Q'07                            79                    8,810.5
    4Q'07                            79                    11,694.1
    1Q'08                            57                    6,264.5

    Source: Thomson Financial & National
    Venture Capital Association

    *These figures take into account the
    subtractive effect of downsized funds

"The interest by venture capitalists in capital intensive industries such as life sciences and clean technologies will likely drive fund sizes upwards for the foreseeable future," said Mark Heesen, president of the NVCA. "The long term investment horizon coupled with the dollars required to bring these companies from the garage or lab to the market place will compel venture capital firms to raise larger funds or accelerate their fundraising cycle to sustain these promising companies. Yet, since many top tier firms have raised funds in the last few years, fundraising activity may actually slow in 2008. But there is no shortage of opportunities, nor is there a shortage of institutional investors interested in participating in the venture capital asset class."

In the first quarter of 2008, 29 early stage focused funds raised $2.8 billion, 23 balanced stage focused funds raised $3.2 billion, and two later stage focused funds raised $119.8 million. Three expansion or seed stage focused funds raised $108.3 million.

                         VC Funds: New vs. Follow-On

                    No. of New       No. of Follow-on        Total

    2003                 37                115                152
    2004                 50                161                211
    2005                 56                175                231
    2006                 47                186                233
    2007                 58                190                248
    YTD 2008              5                 52                 57
    1Q'06                18                 57                 75
    2Q'06                12                 67                 79
    3Q'06                12                 56                 68
    4Q'06                17                 50                 67
    1Q'07                22                 61                 83
    2Q'07                15                 69                 84
    3Q'07                15                 64                 79
    4Q'07                23                 56                 79
    1Q'08                 5                 52                 57

    Source: Thomson Financial & National
    Venture Capital Association

The ratio of follow-on to new funds was approximately 10-to-1 in the first quarter of 2008, compared to less than 3-to-1 in the first quarter of 2007. Five new funds and 52 follow-on funds were raised in the first quarter.

The largest funds raised in the first quarter were Essex Woodlands Health Ventures Fund VIII, L.P. (balanced stage; $734 million), Clarus Lifesciences II, L.P. (balanced stage; $660 million), and Canaan VIII, L.P. (balanced stage; $650 million).

Thomson Financial, with 2007 revenues of US$2.2 billion, is a provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a global leader in providing essential electronic workflow solutions to business and professional customers. With operational headquarters in Stamford, Conn., Thomson provides value-added information, software tools and applications to professionals in the fields of law, tax, accounting, financial services, scientific research and healthcare. The Corporation's common shares are listed on the New York and Toronto stock exchanges NYSE: TOC TSX: TOC.

The National Venture Capital Association (NVCA) represents approximately 480 venture capital and private equity firms. NVCA's mission is to foster greater understanding of the importance of venture capital to the U.S. economy, and support entrepreneurial activity and innovation. According to a 2007 Global Insight study, venture-backed companies accounted for 10 million jobs and $2.3 trillion in revenue in the United States in 2006. The NVCA represents the public policy interests of the venture capital community, strives to maintain high professional standards, provides reliable industry data, sponsors professional development, and facilitates interaction among its members. For more information about the NVCA, please visit www.nvca.org.