Week 09/26/2006 through 10/01/2006

Prepared by Capital Hunter analysts:

After a mediocre showing last week, venture funding shot back to normal with 47 companies receiving over $632 million in new capital, led primarily by a resurgence of interest in media and telecommunications as well as a slew of outsized financings. The largest of these financings was Demand Media, a Santa Monica based acquirer of generic domain names and online content sites which raised $100 million in a Series B transaction from European private equity firm 3i and Oak Investment Partners with participation from Spectrum Equity Investors. Demand Media also raised $120 million earlier in the year from Oak, Spectrum and Generation Capital Partners. The company plans to use their cash hoard to continue buying web sites and adding low-cost content and advertising to the 150,000 domain names and web sites that they currently own. Visto, a provider of wireless messaging and email solutions to mobile operators, raised $51 million from Oak, Meritech Capital Partners, Rustic Canyon Partners, Blueprint Ventures, DFJ ePlanet Ventures and the DFJ Growth Fund. Visto plans to use its new capital to expand its subscriber base through partnerships with other wireless providers and to continue its patent infringement lawsuit against Research in Motion, maker of the BlackBerry. Athenagen, a biotechnology company focused on neurovascular disease, raised $50 million in Series B funding to continue their age-related macular degeneration and Alzheimer’s disease programs. NovaCardia, a San Diego-based biopharmaceutical company focusing on cardiovascular diseases, raised $48 million in Series B funding to continue clinical trials of KW-3902 and other clinical compounds. KW-3902 is an adenosine receptor antagonist currently in Phase III trials. Most of the other financings in excess of $10 million were placed in either biotech or telecommunications companies and are too numerous to list here. We expect media and telecom investment to subside in the coming weeks, as both industries are volatile from a weekly funding standpoint and are typically not top destinations for venture capital. Do not expect any drastic changes or reversals of trends to occur anytime soon.

Initial public offering activity was strong this period, continuing the momentum from two weeks ago. There were once again seven companies that went public, and in the interest of space we will just list the companies below. To learn more just click on the Yahoo! links below:

Mindray Medical International NYSE:MR priced at $270 million and is a Beijing-based developer of patient monitoring devices, diagnostic laboratory instruments and ultrasound imaging systems.

EV Energy Partners LP NASDAQ:EVEP priced at $78 million and is a limited partnership formed to acquire and develop oil & gas properties.

ICF International NASDAQ:ICFI priced at $56 million and provides management and consulting services to the federal government.

CBRE Realty Finance NYSE:CBF priced at $139.2 million and is a commercial real estate specialty finance company.

Shutterfly NASDAQ:SFLY priced at $87 million and is a provider of online photo services.

Omni Financial Services NASDAQ:OFSI priced at $31.8 million and is the holding company for Omni National Bank, a provider of banking services primarily in the southeastern region of the United States.

Bare Escentuals NASDAQ:BARE priced at $352 million and is a provider of mineral-based cosmetics and skin care products.

Please come visit our web site at CapitalHunter.com. We have made improvements to both the look and functionality of our web site, including business resources, glossary terms, and other helpful information provided free of charge for the budding entrepreneur. For private equity firms, consulting firms, business journals, and individuals looking to do research on venture backed companies, you can still gain complete access to our entire database for $59 a quarter and $199 a year.

CapitalHunter.com was able to verify that $632 million of venture capital was invested in 47 U.S.-based companies during the past week. The average deal size was approximately 13.45 million. The amount of venture capital invested this period increased by 66% compared to last periods $380 million.

California was the largest recipient of venture capital funding this week. Twenty-one California companies raised $426.7 million in new equity financing, which accounted for an astounding 67% of the total venture capital invested this reporting period. The largest private venture financing in California was placed into the earlier mentioned Demand Media.

The software sector raised the most venture capital this reporting period, with seventeen companies raising $145 million in venture financing, which accounted for over 22% of the venture capital this period. The largest private venture financings in the software sector was the previously mentioned Visto.

Start-ups raising their second stages of funding represented the largest share of the funding pie, as 41% of all money invested this period went into such companies. The largest such financing was placed into Demand Media.

The three largest venture deals this period are as follows:

The following thirteen companies and other unnamed investors funded the above mentioned top three venture capital investments for $201 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.

About CapitalHunter.com

CapitalHunter.com is a web-based financial information company that identifies, preserves and electronically disseminates worldwide data on venture capital and other equity financings. Customers utilize the CapitalHunter.com searchable database to research newly and historic financings and to identify active investors.

Please visit www.capitalhunter.com and get immediate access. New subscribers can request a free investor analysis.

To be REMOVED from this free service, CLICK HERE