Week 06/12/2006 through 06/18/2006

Prepared by Capital Hunter analysts

Venture capital investment was strong this period, as $523 million was invested across 44 companies, a weekly increase of 22% from last period’s $427 million. The biotechnology sector, which received a startlingly negligible amount of money last period, rebounded in a big way with over a third of the capital (37%) invested this period going to such companies, which amounted to approximately $187.4 million, significantly above the measly $15.5 million the industry received two weeks ago. Software also received substantial investment, with over $127 million flowing into the sector. If you look at the sector chart below you’ll see that software, biotechnology and semiconductor investment dominated the week, with only small or insignificant amounts going to other industries. As for emerging trends this was a pretty vanilla week, although it is good to see private equity investment remain strong in the face of declining equity markets across the globe, including the NASDAQ, which is in the red for the year. Hopefully we’ll have more for you next week.

There were six initial public offerings this week, up from two a week ago, including three VC-backed companies, including ethanol producer VeraSun Energy, back-office software provider Synchronoss Technologies, and intravascular ultrasound equipment provider Volcano. The six firms are as follows:

Verigy NASDAQ:VRGY priced at $127.5 million and is a Singapore-based developer of test solutions for the semiconductor industry.

VeraSun Energy NYSE:VSE priced at $419.75 million and is the second-largest producer of ethanol in the United States.

Volcano Corporation NASDAQ:VOLC priced at $54.4 million and is a provider of intravascular ultrasound and functional measurement products for the treatment of vascular diseases.

Synchronoss Technologies NASDAQ:SNCR priced at $56.5 million and is a provider of e-commerce transaction solutions to the communications services marketplace.

Houston Wire & Cable NASDAQ:HWCC priced at $110.5 million and is a distributor of specialty wire and cable products to the U.S. electricity market.

Golfsmith International Holdings NASDAQ:GOLF priced at $69 million and is a retailer of golf equipment, apparel and accessories.

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CapitalHunter.com was able to verify that $523 million of venture capital was invested in 44 U.S.-based companies during the past week. The average deal size was approximately 11.89 million. The amount of venture capital invested this period increased by 22% compared to last periods $427 million.

California was the largest recipient of venture capital funding this week. Sixteen California companies raised $145.8 million in new equity financing, which accounted for 27% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into Qpixel Technology International. Qpixel raised $25 million in Series B funding and is a provider of H.264-based audio and video encoder/decoder solutions for the digital consumer electronics and digital video communication industries.

The biotechnology sector raised the most venture capital this reporting period, with six companies raising $187.4 million in venture financing, which accounted for 37% of the venture capital this period. The largest private venture financing in the biotech sector was VLST. VLST raised $55 million in Series B funding and is a developer of therapeutics for autoimmune and inflammatory disorders.

Start-ups raising their first stages of financing represented the largest share of the funding pie, as a solid 37% of all money invested this period went into such companies. The largest such financing was placed into CoGeneSys. CoGeneSys raised $55 million and is a developer of next-generation therapeutics across a broad spectrum of areas.

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 $146 million:

A total of 79 equity financings of private and public companies occurred during this reporting period. Each of the 79 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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