Week 01/30/2006 through 02/05/2006

Prepared by Capital Hunter analysts

Venture capital remained strong last week, as $486 million was invested in 42 companies, a 23% week-over-week increase. While software investment remained strong, life science investment (biotechnology and medical devices) took a surprising nosedive, as only a mere $9.5 million was placed into such companies, less than 4% of last week’s funding. In normal circumstances, life science investment accounts for over 30% of weekly funding. Other sectors seeing large investment last week include media & entertainment, networks & equipment and semiconductors.

Seventeen companies decided to list shares last, the largest amount of companies to do so in quite some time. The seventeen companies are as follows:

Incredimail, which priced at $18.75 million on the NASDAQ SmallCap Market, is a provider of customized and entertaining email software products for the consumer or home user markets.

Regency Energy Partners, which priced at $275 million on the NASDAQ, is a limited partnership which gathers, processes, markets and transports natural gas liquids.

H&E Equipment Services, which priced at $196.9 million on the NASDAQ, is a provider of integrated equipment services to the heavy construction industry.

Fortunet, which priced at $22.5 million on the NASDAQ, is a provider of multi-game and multi-player server-based gaming platforms.

Ternium SA, which priced at $496.9 million on the NYSE, is a holder of Techint Group’s steel holdings, including controlling direct and indirect equity holding’s in Argentina’s largest steel company, Siderar, Venezuela’s largest steel company, Sidor, and a large Mexican steel company, Hylsamex.

SGX Pharmaceuticals, which priced at $24 million on the NASDAQ, is a provider of next-generation cancer therapeutics.

Koppers Holdings, which priced at $140 million on the NYSE, is a provider of carbon compounds and wood treatment products for industrial companies.

Iomai, which priced at $35 million on the NASDAQ, is a provider of skin-delivered vaccines and immune system stimulants.

American Telecom Services, which priced at $16.9 million on the AMEX, is a provider of phone/service bundled VoIP and long distance communications products and services.

Valera Pharmaceuticals, which priced at $33.75 million on the NASDAQ, is a provider, acquirer and marketer of urological and endocrine therapeutics.

Thomas Weisel Partners, which priced at $90 million on the NASDAQ, is a provider of investment banking, brokerage, equity research and asset management services to growth companies and growth investors.

Smart Modular Technologies, which priced at $163.6 million on the NASDAQ, is a provider of value added subsystems to original equipment manufacturers.

Digital Music Group, which priced at $38 million on the NASDAQ, is a owner of digital rights to music and other sound recordings and distributor of these recordings to online music stores.

Healthspring, which priced at $366.6 million on the NYSE, is a provider of managed healthcare services with a primary focus on the Medicare Advantage market.

Energy Transfer Equity, which priced at $441 million on the NYSE, is an owner of equity interests in Energy Transfer Partners, a limited partnership engaged in the transportation and storage of natural gas.

Coinmach Service Corporation, which priced at $96.4 million on the AMEX, is a provider of outsourced laundry equipment services to multi-family housing properties.

Cardica, which priced at $35 million on the NASDAQ, is a provider of automated anastomotic systems used to help surgeons perform cardiac bypass surgery.

CapitalHunter.com was able to verify that $486 million of venture capital was invested in 42 U.S.-based companies during the past two weeks. The average deal size was approximately 11.57 million. The amount of venture capital invested this period increased by 23% compared to last periods $396 million.

California was the largest recipient of venture capital funding this week. Sixteen California companies raised $245.7 million in new equity financing, which accounted for 51% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into Sling Media. Sling Media raised $46.6 million in Series B financing and is a provider of consumer electronics that allow users to access television programs and music from their laptops and mobile phones.
The software sector raised the most venture capital this reporting period, with twelve companies raising $101.2 million in venture financing, which accounted for 21% of the venture capital this period. The largest private venture financing in the software sector this period was invested into Incipient. Incipient raised $24 million from a consortium of private equity and venture capital firms and is a provider of switch-resident storage software for mid to large enterprises.
Start-ups raising their Series A round of financing represented the largest share of the funding pie, as 34% of all money invested this period went into such companies. The largest Series A financing was placed into Validity Sensors . Validity Sensors raised $35 million and is a provider of biometric fingerprint sensors
The three largest venture deals this period are as follows:
  Company Industry Investment
1 Sling Media Media & Entertainment $46.6 million
2 RadioFrame Networks Telecommunications $40 million
3 Validity Sensors Semiconductors $35 million


The following fifteen companies and other unnamed investors funded the above mentioned top three venture capital investments for $122.4 million:
1COM Investments
2Craig McCaw
3Doll Capital Management
4EchoStar Communications
5Ericsson Venture Partners
6Goldman Sachs
7Hearst Corporation
8Ignition Partners
9Innovacom Venture Capital
10Liberty Media
11Mobius Venture Capital
12NexTel Data Investments
13Samsung
14TeleSoft Partners
15VantagePoint Venture Partners

A total of 106 equity financings of private and public companies occurred during this reporting period. Each of the 106 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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Features
Venture Capital Activity Highlights
Venture Capital Investments by Region
Venture Capital Investments by Sector
Venture Capital Investments by Round
Top Three Venture Capital Investments
Venture Capitalists Funding the Top Three Deals
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