VC Trends 2011 UK

Global Trends in Venture Capital: State of the IPO Market

June 22, 2011

Copyright © 2011 Deloitte Development LLC. All rights reserved.

Key Findings

IPO Market

Industry Stats

Survey Demographics

Contents


Responses and Demographics

347 responses from nine countries

• 48% from U.S.• 52% non-U.S. countries

Survey conducted in the U.S., Canada, U.K., China, France, Germany, India, Brazil, Israel

Responses from large, mid-sized and small firms, with the largest concentration, 36%, with $100 - $499 million in assets under management


Key Findings

• Over 80 percent of global venture capitalists believe that current IPO activity levels in their home countries are too low

• Venture capitalists believe higher returns generated by IPOs are critical in providing superior returns to limited partners and growth capital to developing portfolio companies

• Of those who are investing outside their home countries, more than half (57 percent) plan to increase this activity during the next five years and an additional 35 percent plan to maintain their level of investment.

• Excitement around IT, healthcare services and clean tech innovation globally

IPO Market


Is an active IPO market in your home country essential for the success of the venture capital industry in your country?

88%

59%

83%79%

58%

81%

40%

65%

91%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Brazil Canada China France Germany India Israel UnitedKingdom

UnitedStates

Is an active IPO market in your home country essential for the success of the venture capital industry in your country?

Yes


49%51%

YesNo

Is an active IPO market in other geographies essential for the success of the venture capital industry in your country?


Is an active IPO market in other geographies essential for the success of the venture capital industry in your country?

63%

77%83%

61%

92%

33%

100%

22%

36%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


UnitedStates

Yes


32%33%

38%

59%

32%28%

21%

42%

30%

45%42%

44%

23%

32%

56%

29%

50%

30%

5%4%6%5%5%6%

21%

0%

20% 19%21%

12%14%

32%

11%

29%

8%

20%

0%

10%

20%

30%

40%

50%

60%

70%

UnitedStates

UnitedKingdom

ChinaFranceCanadaIndiaBrazilGermanyIsrael

Provide growth capital to developing portfolio companiesProvide superior returns to limited partnersAttract public attention to emerging companiesProvide access to capital required to compete in global marketplace

Respondents who indicated that an active IPO market was important either at home or abroad state why an IPO market is essential for the success of the venture capital industry


87%84%

28%

86%

73%

57%63%

92%

70%

13%14%

39%

11%

23%

38%31%

8%

30%

0%3%

33%

4%5%5%6%0%0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

UnitedStates

UnitedKingdom


Lower than necessary to support the health of the venture capital industryAdequate to support the health of the venture capital industryHigher than necessary to support the health of the venture capital industry

The current level of IPO activity in your home country is


Brazil Canada China France Germany India Israel United Kingdom

United States

A competitive investment banking community for IPOs 44% 14% 22% 14% 50% 29% 40% 24% 30%

Healthy investor appetite for equity in public companies 94% 77% 75% 93% 92% 90% 70% 84% 81%

Freely available capital 19% 32% 44% 18% 17% 19% 20% 43% 25%

Ability to move capital out of country 6% 0% 17% 0% 0% 14% 10% 0% 3%

Economic stability 69% 45% 58% 43% 25% 52% 40% 68% 52%

Adequate stock analyst coverage 19% 36% 14% 46% 17% 52% 10% 32% 33%

Companies with leading edge technology 19% 50% 28% 36% 67% 0% 40% 24% 27%

Companies that appeal to general public and mainstream media 6% 23% 14% 29% 33% 38% 50% 16% 19%

Easier reporting for newly public companies 25% 23% 28% 21% 0% 5% 20% 8% 30%

Top 3 factors that create a healthy and vibrant IPO market

• Squares highlighted in yellow = over 50% of respondents selected that factor

* This is a multiple select question. Percentages will not add to 100%.


87%39%

33%26%26%

15%14%

13%12%

8%5%5%

4%2%2%2%2%1%2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NASDAQNew York Stock Exchange (NYSE)

Shanghai Stock ExchangeHong Kong Stock Exchange

London Stock Exchange (AIM)London Stock Exchange

EuronextShenzhen Stock Exchange

Bombay Stock ExchangeToronto Stock Exchange

National Stock Exchange of IndiaBM&F BovespaDeutsche Börse

Tokyo Stock ExchangeKorea Exchange

Australian Securities ExchangeBME Spanish Exchanges

SIX Swiss ExchangeOther

Over the next 5 years, which 3 stock exchanges do you see as most promising for venture backed IPOs for venture-backed companies globally?


Are you currently investing outside your home country?

19%

64%56%

82%

92%

19% 20% 22%

49%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


UnitedStates

Yes


42%

38%

56%

43%

50%

33%

25%

33%30%

3%3%

18%

0%

9%

5%

0%0%0%

30%

22%

15%

54%

36%

24%25%

67%

50%

25%

38%

12%

4%5%

38%

50%

0%

20%

0%

10%

20%

30%

40%

50%

60%

70%

UnitedStates

UnitedKingdom


Increase Decrease Remain the same Not investing outside home country

Over the next five years, do you anticipate your investment activity outside of your home country will

Industry Stats


15%

33%

47%

36%

8%

37%

33%

13%

33%

28%

7%

19%

18%

42%

42%

11%

25%

11%

57%

59%

34%

45%

50%

21%

56%

63%

56%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel

Increase Decrease Remain the same

Anticipated investment levels in terms of total capital over the next five years - Telecommunications


13%

29%

23%

15%

6%

40%

29%

41%

17%

42%

45%

75%

59%

50%

29%

46%

54%

35%

40%

25%

35%

60%

50%

43%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Semiconductors including electronics


46%

45%

45%

20%

38%

58%

58%

50%

22%

3%

7%

21%

32%

19%

16%

17%

13%

33%

51%

48%

33%

48%

44%

26%

25%

38%

44%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Software


64%

43%

79%

58%

69%

84%

80%

57%

44%

4%

14%

4%

15%

11%

14%

32%

43%

21%

38%

15%

5%

20%

29%

56%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - New media/social networking


19%

33%

83%

29%

38%

64%

73%

22%

29%

30%

33%

14%

38%

14%

9%

22%

29%

51%

33%

17%

57%

23%

21%

18%

56%

43%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Biopharmaceuticals


24%

48%

77%

42%

42%

65%

60%

70%

33%

24%

14%

6%

11%

33%

22%

52%

38%

16%

47%

25%

35%

40%

30%

44%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Medical device and equipment


43%

68%

81%

67%

58%

85%

100%

89%

56%

18%

3%

3%

17%

17%

10%

22%

40%

29%

16%

17%

25%

5%

11%

22%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Clean technologies


32%

15%

76%

50%

33%

90%

64%

57%

29%

9%

30%

6%

15%

8%

7%

14%

29%

60%

55%

18%

35%

58%

10%

29%

29%

43%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Consumer business


68%

60%

67%

67%

82%

75%

78%

67%

78%

1%

16%

7%

4%

31%

24%

27%

29%

18%

25%

22%

33%

22%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Cloud computing


33%

15%

55%

40%

30%

67%

36%

20%

43%

14%

23%

18%

7%

6%

9%

40%

54%

62%

27%

53%

70%

28%

55%

40%

57%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Financial services


54%

54%

75%

41%

44%

90%

80%

71%

29%

12%

8%

3%

6%

33%

38%

22%

53%

56%

10%

20%

29%

71%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel


Anticipated investment levels in terms of total capital over the next five years - Healthcare services

Survey Demographics


10%

38%

6%

14%

23%

5%

13%

25%

30%

10%

16%

6%7%

9%

24%25%

0%

10%

31%

38%39%

54%

50%

29%31%

25%

50%

20%

3%

19%21%

14%14%

6%

33%

0%

29%

5%

31%

4%5%

29%

25%

17%

10%

0%

10%

20%

30%

40%

50%

60%

UnitedStates

UnitedKingdom


$1 million - $49 million $50 million - $99 million $100 million - $499 million$500 million - $1 billion More than $1 billion

Capital under management in $USD


87%

76%

81%

75%

73%

67%

56%

83%

70%

13%

24%

19%

25%

27%

33%

44%

17%

30%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

United States

United Kingdom

China

France

Canada

India

Brazil

Germany

Israel

Venture Capital Only Venture Capital and Buyout

Primary investment focus


MethodologyThe 2011 Global Venture Capital Survey was conducted jointly by Deloitte & Touche LLP and the National Venture Capital Association. It was administered to venture capitalists in the following countries: Brazil, Canada, China, France, Germany, India, Israel, United Kingdom and the United States. Deloitte received 347 responses from general partners with assets under management ranging from less than $100 million to greater than $1 billion. Multiple responses from the same firm were encouraged as the survey was a general measurement of the state of global investing from general partners, not attitudes of specific firms.

The survey was conducted during February and March 2011.


This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.


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VC Trends 2011 UK

Economy & Finance

Transcript of VC Trends 2011 UK