1. CONTACTS
Emily Mendell Joseph Christinat
NVCA Thomson Reuters
1.610.565.3904 1.646 223 6798
emendell@nvca.org joe.christinat@thomsonreuters.com
GLOBAL ECONOMIC CRISIS WEIGHS HEAVILY ON VENTURE-BACKED EXITS
IN 2008
IPO Exits at 30 Year Low, M&A Activity Slows
New York, New York, January 2, 2009 – Venture-backed company exits continued to lag
in the fourth quarter of 2008, according to the Exit Poll report by Thomson Reuters and the
National Venture Capital Association (NVCA). There were no venture-backed IPOs in the
quarter, and the tally of M&A exits as of the last day of the quarter came to a modest 37
transactions for the period. Full-year 2008 brought just six IPO exits, the fewest annual
venture-backed offerings since 1977, when there were also six IPO exits. Preliminary full-
year M&A figures show 260 transactions in 2008, the first year since 2003 when there were
less than 300 venture-backed acquisitions.
quot;The most significant impact of the US financial crisis on the venture capital industry
has clearly taken place in the exit markets,” said Mark Heesen, president of the NVCA.
“The inability of our strongest companies to go public and the softening of acquisitions
activity continue to have a major ripple effect that now reaches every stage of the venture
investment lifecycle. As a result, new investments and fundraising will slow considerably in
2009 until the exit markets re-open and the pipeline is cleared. The venture community is
poised and ready to bring the next generation of great companies to the capital markets
and strategic buyers and, as we have done historically, contribute substantially to
economic growth and innovation.quot;

2. Page 2 of 5
January 2, 2009
Venture-Backed Liquidity Events by Year/Quarter, 2002-2008
*Total
M&A Disclosed *Average Total Average
Deals with M&A Offer IPO Offer
Total M&A
M&A Disclosed Value Deal Size **Number Amount Amount
Quarter/Year Values ($M) ($M) of IPO's ($M) ($M)
Deals
2002 319 154 7,586.7 49.3 22 2,109.1 95.9
2003 284 119 7,460.1 62.7 29 2,022.7 69.8
2004 346 187 15,919.6 85.1 94 11,378.0 121.0
81 45 4,351.9 96.7 10 720.7 72.1
2005-1
81 34 4,725.0 139.0 10 714.1 71.4
2005-2
102 48 5,739.5 119.6 19 1,458.1 76.7
2005-3
87 39 2,594.0 66.5 18 1,592.1 88.5
2005-4
2005 351 166 17,410.6 104.9 57 4,485.0 78.7
107 52 5,607.5 107.8 10 540.8 54.1
2006-1
106 40 4,018.5 100.5 19 2,011.0 105.8
2006-2
94 42 3,450.8 82.2 8 934.2 116.8
2006-3
63 26 5,616.8 216.0 20 1,631.1 81.6
2006-4
2006 370 160 18,693.6 116.8 57 5,117.1 89.8
83 29 4,540.3 156.6 18 2,190.6 121.7
2007-1
86 36 3,972.3 110.3 25 4,146.8 165.9
2007-2
103 52 10,810.0 207.9 12 945.2 78.8
2007-3
88 43 9,084.1 211.3 31 3,043.8 98.2
2007-4
2007 360 160 28,406.7 177.5 86 10,326.3 120.1
73 30 3,929.4 131.0 5 282.7 56.6
2008-1
72 22 4,154.0 188.8 0 0.0 0.0
2008-2
78 29 3,741.1 129.0 1 187.5 187.5
2008-3
37 15 2,090.9 139.4 0 0.0 0.0
2008-4
2008 260 96 13,915.4 145.0 6 470.2 78.4
Thomson Reuters & National Venture Capital Association
*Only accounts for deals with disclosed values
**Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile.
IPO Activity Overview
There were no venture-backed IPOs in the fourth quarter of 2008, the second quarter of
the year with no activity. The last year there were two quarters without any IPO activity
was 1975, when both the first and fourth quarters had zero exits. By dollar volume, total

3. Page 3 of 5
January 2, 2009
IPO proceeds in 2008 reached $470.2 million, the lowest value since 1979 with $339.7
million.
Echoing domestic trends, no companies that received US venture financing went public on
foreign exchanges in the fourth quarter.
As of December 31, 2008, five of the six venture-backed companies that went public during
2008 were trading below their offering price.
Twenty-eight venture-backed companies are currently filed for an initial public offering with
the SEC. This level falls short of 3Q 2008 when 38 venture-backed companies were in
registration. There were 40 venture-backed IPOs withdrawn from registration in 2008.
For the full-year period, four venture-backed IPO exits totaling $221.0 million in proceeds
came from Life Sciences issuers. The remaining IPOs came from Information Technology
companies and accounted for a combined $249.3 million.
The largest IPO of the year was the $187.5 million issue by web hosting provider
Rackspace Hosting in August.
Mergers and Acquisitions Overview
As of December 31, 2008, 37 venture-backed M&A deals were reported for the fourth
quarter, 15 of which had an aggregate deal value of $2.1 billion. The average disclosed
deal value was $139.4 million.
The Information Technology sector dominated the venture-backed M&A landscape, with 30
deals and a disclosed total dollar value of $972.2 million. Within this sector, Internet
Specific companies accounted for the bulk of the target companies, with 11 transactions
across this sector subset. Life Sciences saw the next highest level of activity with four
deals and a combined disclosed value of $173.7 million. Finally, Non-High Technology
deals accounted for three exits with disclosed values of $945 million.
For full-year 2008, Information Technology transactions accounted for the majority of M&A
exits and volume, with 190 transactions and disclosed aggregate values of $8.3 billion, or
60 percent of the total. Non-High Technology and Life Sciences followed with 25 percent
($3.4 billion) and 15 percent ($2.2 billion), respectively.

4. Page 4 of 5
January 2, 2009
Venture-Backed M&A Industry Breakdown
Q4 2008
Number
of
Total
Venture-
Number Backed Disclosed
Venture-
of M&A
Backed
Venture- deals
Backed with a Deal
Value
M&A disclosed
Industry ($M)
deals value
Communications and Media 2 1 180.0
Internet Specific 11 5 320.7
Computer Software and Services 10 3 392.2
Semiconductors/Other Elect. 5 1 60.0
Computer Hardware 2 1 19.3
Information
Technology TOTAL 30 11 972.2
Medical/Health 4 3 173.7
Life Sciences TOTAL 4 3 173.7
Other Products 2 1 945.0
Consumer Related 1 0 0.0
Non-High
Technology TOTAL 3 1 945.0
TOTAL 37 15 2,090.9
Source: Thomson Reuters & National Venture Capital Association
The largest transaction of the quarter was the acquisition of online payment and marketing
technology solutions provider Bill Me Later by eBay. The transaction, valued at $945.0
million, was completed in November.
In the largest transaction of the year, EqualLogic, Inc, a developer of storage area network
solutions, was purchased by Dell, Inc. for $1.4 billion in January.
Deals bringing in the top returns, those with disclosed values greater than four times the
venture investment, accounted for 43 percent of the total in the fourth quarter of 2008,
slightly lower than in the third quarter when these deals accounted for 45 percent. Those
deals returning less than the amount invested accounted for 21 percent of the quarter’s
total, compared to 24 percent of the total last quarter.
For 2008, 46 percent of M&A transactions returned more than four times the venture
investment, compared to 41 percent in full-year 2007. Twenty-eight percent of the deals in
2008 had transaction values less than the venture investment, compared to 2007 when 23
percent of the deals were valued at less than the venture investment.

5. Page 5 of 5
January 2, 2009
Analysis of Transaction Values versus Amount Invested
Relationship between transaction value and Q308 Q408 2007 2008
investment M&A** M&A** M&A** M&A**
Deals where transaction value is less than total
7 3 34 24
venture investment
Deals where transaction value is 1-4x total
9 5 55 23
venture investment
Deals where transaction value is 4x-10x total
9 4 32 26
venture investment
Deals where transaction value is greater than
4 2 29 14
10x venture investment
Total Disclosed Deals 29 14 150 87
Source: Thomson Reuters & National Venture Capital
Association
** Disclosed deals that do not have a disclosed total
investment amount are not included.
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About National Venture Capital Association
The National Venture Capital Association (NVCA) represents approximately 460 venture
capital firms in the United States. 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 10.4 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.