Week 02/13/2006 through 02/19/2006

Prepared by Capital Hunter analysts

Venture capital investment slipped this period, as only 26 companies received funding, down almost 40% from 43 companies the week before. The $302 million raised by these 26 companies was also down 30% from the week before, the largest week-over-week drop since August of ‘05. Medical device investment, largely absent the past few weeks, was the most popular sector this period, as 29% of all this weeks dollars were placed in such companies. Industrial & energy related companies continued to do well, as six companies (more than any other sector this week) received over $30 million dollars, fourth highest of any industry.

Only three companies listed last week, down from fourteen a week ago (we mistakenly listed the three companies that are to list this reporting period as part of last period’s companies. Capital Hunter regrets the error), part of a slow week for equity investments. The three companies are as follows:

Rosetta Resources, which priced at $950 million on the NASDAQ, is an independent oil & gas explorer with properties in the Sacramento Basin, South Texas, the Gulf of Mexico and the Rocky Mountains.

Spark Networks, which priced at $236 million on the AMEX, is a provider of online personals services internationally.

Morgans Hotel Group, which priced at $360 million on the NASDAQ, is an integrated hospitality company that operates, owns, acquires and redevelops boutique hotels throughout the United States and Europe.

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CapitalHunter.com was able to verify that $302 million of venture capital was invested in 26 U.S.-based companies during the past two weeks. The average deal size was approximately 11.62 million. The amount of venture capital invested this period decreased by 30% compared to last periods $433 million.

California was the largest recipient of venture capital funding this week. Thirteen California companies raised $146.4 million in new equity financing, which accounted for 48% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into MovieBeam. MovieBeam raised $48 million in Series A financing and is a provider of on-demand plug-an-play movies.

The medical device sector raised the most venture capital this reporting period, with only three companies raising $91.5 million in venture financing, which accounted for 29% of the venture capital this period. The largest private venture financing in the medical device sector this period was invested into Insulet Corporation. Insulet Corporation raised $50 million in late-stage financing from a consortium of private equity and venture capital firms and is a provider of disposable insulin delivery systems for the treatment of diabetes.

Start-ups raising their late stage round of financing represented the largest share of the funding pie, as 33% of all money invested this period went into such companies. The largest late stage financing was placed into the aforementioned Insulet Corporation .

The three largest venture deals this period are as follows:

The following twenty companies and other unnamed investors funded the above mentioned top three venture capital investments for $135 million:

A total of 69 equity financings of private and public companies occurred during this reporting period. Each of the 69 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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