Week 10/31/2005 through 11/06/2005

Prepared by Capital Hunter analysts

Venture capital inflows have continued their strong trend, as over $400 million was raised this reporting period. It has been over six weeks since weekly venture capital investment fell below $300 million, hopefully a sign that business investment is starting to accelerate. The biggest investment this period was placed into NexTone Communications, which provides scalable VoIP session management for the telecom industry. NexTone raised $35 million in Series D financing from a consortium of investors, including One Equity Partners, BCE Capital, Core Capital Partners, Mid-Atlantic Venture Funds, Safeguard Scientifics, Delmag Ventures and Blue Rock Capital.

There were four IPOs last week, but none of the companies that listed last week were from capital-intensive industries, as has been the case the past few months. The companies (and a trust) are listed below:

Website Pros priced at $68 million on the NASDAQ Stock Exchange and is a Jacksonville based provider of online products and services to small and medium-sized businesses to establish, maintain, promote and optimize their Internet presence.

Newkirk Realty Trust priced at $240 million on the New York Stock Exchange and is a Maryland-based real estate investment trust that owns a collection of office, retail, and industrial properties.

CBeyond Communications priced at $73.59 million on the NASDAQ Stock Exchange and is a provider of IP-based communications services to small businesses.

Activant Solutions Holdings priced at $200 million on the NASDAQ Stock Exchange and is a provider of business management solutions to the home center, lumber, automotive and wholesale markets.

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CapitalHunter.com was able to verify that $414 million of venture capital was invested in 42 U.S.-based companies during this week’s reporting period. The average deal size was approximately 9.86 million. The amount of venture capital invested this period increased by 8% compared to last periods $383 million.

California was once again the most popular destination for venture capital. Eighteen California companies raised $167.85 million in new equity financing which was 40% of the total venture capital invested this reporting period. The largest private venture financing in California this period was invested into Devax. Devax raised $32 million in Series D funding and is a Irvine based medical device company currently developing bifurcated stents for the treatment of atherosclerosis in coronary bifurcation.

The medical device sector raised the largest percentage of funding this period, with approximately 24% of the venture capital this period. Seven medical device companies raised $99.35 million in venture financing. The largest private venture financing into the medical device sector this period went into the aforementioned Devax.

Companies raising their Series C financing round led this week’s venture capital activity. These financings represented 35% of the total venture capital deployed this period. The largest private venture financing was placed into TransOral Pharmaceuticals. TransOral Pharmaceuticals raised $23 million and is a Corte Madera, California based pharmaceutical company that develops products for the treatment of insomnia and migraines using its proprietary drug delivery system.

The three largest venture deals this period are as follows:

The following fifteen companies and other unnamed investors funded the above mentioned top three venture capital investments for $90 million:

A total of 67 equity financings of private and public companies occurred during this reporting period. Each of the 67 equity financings are profiled in a weekly report which include venture financings, private placements, secondary offerings, PIPE’s, and IPO’s.

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