Week 11/21/2005 through 12/04/2005

Prepared by Capital Hunter analysts

Hopefully everyone had a happy Thanksgiving and got some much needed R&R during the four day break. We mentioned in our last newsletter that we wouldn’t publish for the week of November 22-28 mainly due to the fact that many firms tend to relax their work load during short work weeks, and this year was no different. For the time period November 22-December 4, there were only a mere 35 venture deals totaling $314.1 million, 15% less than the total amount of venture capital raised during the preceding November 15-21 weekly time period. Software and biotechnology still received the most funding, with 22% and 28% of all total funding, respectively, and California is still the favorite locale of venture capitalists (no surprises there). More on the sector, round, and geographic funding breakdowns later.

There were only five initial public offerings within the past two weeks (although there were a number of secondary offerings during this time period, including ONYX Pharmaceuticals, Point Therapeutics, Therma-Wave, and a number of financial and natural resource companies), but only one of the five companies that listed was in the high-tech arena, and that company is located in China. The five companies are as follows:

Union Drilling priced at $123.53 million on the NASDAQ Stock Exchange and is a provider of contract land drilling services to natural gas producers in the United States.

Tronox priced at $244.72 million on the New York Stock Exchange and is a producer and marketer of titanium dioxide.

Brookdale Senior Living priced at $210.37 million on the New York Stock Exchange and is an operator of senior care facilities throughout the United States.

Actions Semiconductor priced at $72 million on the NASDAQ Stock Exchange and is a fabless semiconductor company focused on the personal media player market.

DCP Midstream Partners priced at $193.5 million on the New York Stock Exchange and is a developer, marketer and operator of natural gas assets.

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CapitalHunter.com was able to verify that $314.1 million of venture capital was invested in 35 U.S.-based companies during the past two weeks. The average deal size was approximately 8.97 million. The amount of venture capital invested this period decreased by 15% compared to last periods $370 million.

California was still the most popular destination for venture capital, though not as popular as is usually the case. Fourteen California companies raised $94.53 million in new equity financing, which accounted for 29% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into NeurogesX. NeurogesX raised $20 million in Series D funding and is a San Carlos-based biotechnology company focusing on neuropathic therapeutic treatments.

The biotechnology sector raised the most venture capital this reporting period, with eight biotechnology companies raising $91.6 million in venture financing, which accounted for 28% of the venture capital this period. The largest private venture financing in the biotechnology sector this period went into Alimera Sciences. Alimera Sciences raised $31.8 million in Series B funding and is a Alpharetta-based ophthalmic pharmaceutical company that specializes in the development and commercialization of over-the-counter and prescription ophthalmology pharmaceuticals.

Start-ups raising their second institutional round of financing represented the largest share of the funding pie, as 40% of all money invested this period went into such companies. The largest private venture financing in the Series B round was placed into the aforementioned Alimera Sciences.

The three largest venture deals this period are as follows:

The following eleven companies and other unnamed investors funded the above mentioned top three venture capital investments for $77.8 million:

A total of 102 equity financings of private and public companies occurred during this reporting period. Each of the 102 equity financings are profiled in a weekly (in this case biweekly) report which include venture financings, private placements, secondary offerings, PIPE’s, and IPO’s.

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