Week 12/26/2005 through 01/08/2006

Prepared by Capital Hunter analysts

Hopefully everyone (well, I hope most everyone) had a good week or part of a week off between Christmas and New Year’s and is rejuvenated and ready to go for 2006. I know I am (at least after I get through all of our backlogged work) as some exciting events are taking place which should help expand our customer base and hopefully our business. Stay tuned.

We didn’t publish a newsletter last week due to the fact that there were not very many equity investments (including no initial public offerings) made during the holiday week and the few that were made will be included in this week’s report. That being said the first full week back started with a bang. Almost $500 million ($488.3 million to be exact) was invested into just thirty companies this week, which if you do the math comes to over $16 million per deal, an unusually large deal size. However the large deal size is due to the fact that there were some uncharacteristically large investments, with seven deals that were worth $25 million or more and one deal that was over $100 million, that deal being ORBCOMM, which will be discussed later in the newsletter. California was the largest recipient of venture capital, receiving over $256 million of all venture dollars, while telecommunications (largely buttressed by the ORBCOMM deal), biotechnology and medical devices were the industries that received the most capital this reporting period.

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CapitalHunter.com was able to verify that $488 million of venture capital was invested in 30 U.S.-based companies during the past two weeks. The average deal size was approximately 16.27 million. The amount of venture capital invested this period increased by 29% compared to last periods $379 million.

California was once again the largest recipient of venture capital funding this week. Thirteen California companies raised $256.4 million in new equity financing, which accounted for 53% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into Perlegen. Perlegen raised $50 million in late round financing from Pfizer and is a developer of therapeutics and diagnostics used in high-resolution genome scanning.

The telecommunications sector raised the most venture capital this reporting period, with just two companies raising $124 million in venture financing, which accounted for 26% of the venture capital this period. The largest private venture financing in the telecommunications sector this period went into the aforementioned ORBCOMM. ORBCOMM raised $110 million in late stage funding from a consortium of private equity and venture capital firms and is a wireless telecommunications company that provides low-cost data communications services via its low-earth orbit satellite network to customers worldwide.

Start-ups raising late stage rounds of financing represented the largest share of the funding pie, as 51% of all money invested this period went into such companies. The largest late stage financing was placed into the aforementioned ORBCOMM.

The three largest venture deals this period are as follows:

The following eight companies and other unnamed investors funded the above mentioned top three venture capital investments for $202.2 million:

A total of 65 equity financings of private and public companies occurred during this reporting period. Each of the 66 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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