Week 07/10/2006 through 07/16/2006

Prepared by Capital Hunter analysts

Venture capital investment returned to normal this period, with $423 million invested across 38 companies, which is fairly consistent with the totals for the past six months. Admittedly we expected that the lack of announcements the past few weeks would lead to a surge this period, but alas it was not to be. Perhaps next week will be a bit more fruitful. Despite the $423 million raised this period there were few relatively large investments. MobiTV, which provides mobile television and digital radio services for cellular, WiFi and broadband devices, raised $70 million in new venture financing from Oak Investment Partners and an undisclosed consortium of previous investors the company is not current disclosing. The other company to receive a large investment this period was Synta Pharmaceuticals, a developer of next-generation therapeutics for inflammatory diseases and cancer. Synta raised $40 million in Series E funding from Caxton Corporation, SunAmerica Ventures and Luxor Capital Partners to advance its clinical and pre-clinical drug programs. Software and biotechnology companies continued to be the favored targets of venture capitalists, receiving close to $200 million of the $423 raised this period, with telecommunications investment (which consisted of just two companies, MobiTV and SkyPilot Networks, listed in the top three investments below) coming in a close third. Other industries, including semiconductors, IT services and media & entertainment, raised marginal sums of capital this period. While we cannot give you any guidance for the upcoming week, we believe it will be at least as good as this period, if not better. Stay tuned.

There were four initial public offerings this week, the first ones since GMarket and Aventine Renewable Energy Holdings commenced trading back on the 29th of June. The most notable offerings this period are probably Allied World Assurance Holdings and the Cowen Group. Allied World Assurance Holdings is a Bermudese property & casualty reinsurer formed in the wake of the 9-11 attacks by a consortium of investors that includes AIG, Chubb and Goldman Sachs and raised over $300 million in its offering, which is above its $299.2 million pricing range. The Cowen Group (perhaps better known as SG Cowen), which provides investment banking services to companies and other institutional clients, slipped on this first day of trading and is currently selling at twenty cents below its offer price. Some analysts believe that Cowen’s focus on the brokerage end of their business and not the advisory end is partially responsible for the lackluster performance thus far. As many investors believe a downturn is on the horizon Cowen may be subject to decreased revenues due to their dependence on brokerage services and underwriting. Without further ado, here are the four companies that braved the public waters this period:

Ascent Solar Technologies NASDAQ:ASTIU priced at a mere $16.5 million and is a provider of photovoltaic technology for space applications.

Allied World Assurance Holdings NYSE:AWH priced at $299.2 million and is a provider of insurance and reinsurance products and services.

Valero GP Holdings NYSE:VEH priced at $379.5 million and is the owner of Valero LP, which operates independent terminals and petroleum pipelines.

The Cowen Group NASDAQ:COWN priced at $179.5 million and is a provider of investment banking services to institutional clients.

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CapitalHunter.com was able to verify that $423 million of venture capital was invested in 38 U.S.-based companies during the past week. The average deal size was approximately 11.13 million. The amount of venture capital invested this period decreased by 12% compared to last two periods (the two weeks previous to this one) $482 million.

California was the largest recipient of venture capital funding this week. Seventen California companies raised $206.3 million in new equity financing, which accounted for 49% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into MobiTV. MobiTV raised $70 million in Series C funding and is a mobile television and digital radio service provider for cellular, Wi-Fi and broadband enabled devices.

The software sector raised the most venture capital this reporting period, with thirteen companies raising $109.5 million in venture financing, which accounted for 25% of the venture capital this period. The largest private venture financing in the software sector was Surgient Networks. Surgient Networks raised $20 million in Series C funding and is a provider of software that simulates product testing, sales demonstrations, evaluations and training.

Start-ups raising their second stages of financing represented the largest share of the funding pie, as 33% of all money invested this period went into such companies. The largest such financing was placed into eFashionSolutions. eFashionSolutions raised $17.4 million and is a provider of outsourced ecommerce systems and services to the fashion apparel and accessories market.

The three largest venture deals this period are as follows:

The following ten companies and other unnamed investors funded the above mentioned top three venture capital investments for $131 million:

A total of 67 equity financings of private and public companies occurred during this reporting period. Each of the 67 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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