UPDATE: VENTURE CAPITAL TRENDS, 2000 TO 2007 2008

VC Investments Show an Increasing Trend Toward the Industrial/Energy Sector

Austin, TX - 04/10/08 - In 20071, California accounted for 47.7% of all VC investments, and thus it is not surprising that the U.S. investment
trends in the biotechnology, software, and industrial/energy sectors appear highly correlated to California investments from 2000 to 2007.
In the U.S, VC investments in biotechnology as a percent of total investments have remained fairly stable since 2003; however, in 2007
biotechnology was still the second largest investment sector in the nation. Pennsylvania and Massachusetts had the largest share of
biotechnology investments among the major states that attract VC investments.

Biotechnology as a % of Total VC Investments, 2000 - 2007

70.0%
In 2007 software VC investments US
represented 18.1% of VC investments 60.0%
TX
in the U.S., which is down from its 50.0% PA
23.3% share in 2000. The software
sector still took in the largest share of 40.0% MA
VC investments in the U.S. Similarly, CA
30.0%
Massachusetts, California, Texas and
Pennsylvania have all seen a 20.0%
decrease in their percentage of
software investments since 2000. 10.0%

0.0%
From 2004 to 2007 venture capital 2000 2001 2002 2003 2004 2005 2006 2007
investments in the U.S. have shown an
increasing trend towards the Industrial/Energy as a % of Total VC Investments, 2000 - 2007
industrial/energy sector, increasing 25.0%
from 2.4% of total VC investments in US
2000 to 10% of investments in 2007. 20.0% TX
Texas appears to have started the PA
trend in 2003 whereas California, 15.0% MA
Pennsylvania, and Massachusetts
started to increase their share of CA
industrial/energy VC investments in 10.0%
2004.
5.0%
To conclude, this analysis brings two
questions to mind about what might be 0.0%
driving the increase in investments in 2000 2001 2002 2003 2004 2005 2006 2007
the industrial/energy sector.
Software as a % of Total VC Investments, 2000 - 2007
35.0%
1. Is the recent trend in investments in US
the industrial/energy sector a reaction 30.0% TX
to strong consumer demand for PA
alternative energy and or so called 25.0%
“green” goods? 20.0%
MA
CA
2. Or, have VC’s been blinded by the 15.0%
“green exuberance,” and thus lost 10.0%
sight of significant investment
opportunities in other sectors such as 5.0%
I.T. or Medical Devices and
Equipment? 0.0%
2000 2001 2002 2003 2004 2005 2006 2007

1Venture capital investment data gathered from PriceWaterhouseCoopers and National Venture Capital Association’s Money Tree database. For a
formal definition of the sectors in this analysis please refer to the “Report Definitions” section on the Money Tree Report website.

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