Week 10/16/2006 through 10/22/2006

Prepared by Capital Hunter analysts:

Venture capital investment sunk to $262 million this period, the first time that has happened since September of last year and the lowest total since the first week of August in 2005, when just 27 companies received $252 million. We mentioned that you should expect to see lower numbers in the coming weeks, though we had hoped to see better numbers than this. Biotechnology received the most capital this period thanks in part to the $45 million late stage investment Xencor received in order to continue development of its antibody and protein drugs. Investors included MedImmune Ventures, Danish-based Novo Nordisk, HealthCare Ventures and previous equity backer Zen Investments. In addition, Right Media received $45 million from Yahoo! and Redpoint Ventures in order to continue the development of their advertising marketplace for non-premium ad inventory, which has taken off in the past year. Other notable companies receiving investment include Validity Sensors, which received $20 million in late stage funding from Telesoft Ventures, VentureTech Alliance, Qualcomm Ventures as well as from angel investors including salesforce.com CEO Marc Benioff, early Google-backer Ram Shiram and Taza Microelectronics CEO Atiq Raza, and Pharmaca Integrative Pharmacy, which received $18 million in late stage financing from Highland Capital Partners. We expect to see continued weakness in the VC sector for the next few weeks, though as you well know, anything can happen.

In complete contrast with venture capital investment, the IPO market had one of its strongest showings in quite some time, with nine (yes, nine) companies listing this period, more than double what we reported last week and the largest number of new companies going public since late June. Perhaps more noteworthy is the fact that none of the companies raised more than $200 million and only three of the nine raised more than $100 million. For more information of these companies I encourage you to use the links below, which will take you to Yahoo! Finance where you can find a lot of information about the company that interests you. Without further ado, here are the public markets four newest companies:

Universal Compression Partners NASDAQ:UCLP priced at $115.5 million and is a provider of natural gas contract compression services to companies in the United States.

Trubion Pharmaceuticals NASDAQ:TRBN priced at $52 million and is a biotechnology company developing products for the treatment of autoimmune diseases and cancer.

Stanley NYSE:SXE priced at $81.9 million and is a provider of information technology services to the U.S. defense industries.

First Mercury Financial NYSE:FMR priced at $165 million and is a provider of insurance products to the specialty consumer markets.

Susser Holdings NASDAQ:SUSS priced at $107.3 million and is a convenience store operator.

LeMaitre Vascular NASDAQ:LMAT priced at $38.5 million and is a provider of medical devices for the treatment of peripheral vascular diseases.

Ivivi Technologies AMEX:II priced at $15 million and is a provider of electrotherapeutic technologies.

Granahan McCourt Acquisition AMEX:GHN-U priced at $90 million and is a blank check company looking to acquire assets in the media or telecommunications sector.

ExlService Holdings NASDAQ:EXLS priced at $67.5 million and is a provider of business process outsourcing solutions.

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 $262 million of venture capital was invested in 27 U.S.-based companies during the past week. The average deal size was approximately 9.70 million. The amount of venture capital invested this period decreased by 41% compared last periods $444 million.

California was the largest recipient of venture capital funding this week. Thirteen California companies raised $145.6 million in new equity financing, which accounted for 56% of the total venture capital invested this reporting period. The largest venture investment in California was placed into the earlier mentioned Xencor.

The biotechnology sector raised the most venture capital this reporting period, with four companies raising $62 million in venture financing. Biotech companies accounted for over 24% of the venture capital this period. The largest venture investment in the biotechnology sector was placed into Xencor.

Start-ups raising their later stages of funding represented the largest share of the funding pie, as 41% of all money invested this period went into such companies, though Series B funding ran a very close second. For perhaps the first time since we started our newsletter, a stage of funding was shut-out, as no company received a Series C investment this period. We left the 0% for Series C on the image below for illustrative purposes. The largest late stage funding also happened to be placed in Xencor, as the $45 million Right Media received was a Series B stage investment.

The three largest venture deals this period are as follows:

The following twelve companies and other unnamed investors funded the above mentioned top three venture capital investments for $110 million:

A total of 57 equity financings of private and public companies occurred during this reporting period. Each of the 57 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