Week 10/23/2006 through 10/29/2006

Prepared by Capital Hunter analysts:

Venture capital investment went up slightly to $323 million, a 23% jump from last period’s dreadful numbers, but a jump nevertheless. We expect to see a sizeable increase for our next newsletter, but we project that funding will remain in the $300 million-$400 million range for the foreseeable future. There isn’t a lot to report that is out of the ordinary other than the fact that Jingle Networks, better known for its 1-800-FREE411 ad-supported directory service, raised $30 million in Series C financing from big media companies including Hearst & Comcast Interactive Capital in addition to Goldman Sachs, IDG Ventures, First Round Capital, Liberty Associated Partners & Lead Dog Ventures. This is Jingle Network’s fourth round of financing since September of 2005, and has raised close to $70 million over that time. Zoom Systems raised $35 million in Series D funding to continue to pepper malls and hotels with their glorified vending machines (or more appropriately automated retail stores), in which users can buy anything from food to office supplies to skincare products to digital music players and other electronics. No word on how profitable the company is, but the company raised $10 million earlier in the year and raised $12 million in July of 2005, so extrapolate what you will from that information. Hopefully we will have something more interesting to report to you next week, so stay tuned.

The IPO market remained strong, with seven companies going public this period raising in excess of $2 billion. The largest of the IPOs this period was Douglas Emmett, which raised close to $1.4 billion and is the largest IPO since MasterCard went public a few months back. 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:

Douglas EmmettNYSE:DEI priced at $1.386 billion and is an owner and operator of office and residential property in Los Angeles County.

Gatehouse Media NYSE:GHS priced at $248 million and is a publisher of locally based print and online media.

Eagle Rock Energy Partners NASDAQ:EROC priced at $237.5 million and is a pipeline company that processes and transports natural gas.

Cadence Pharmaceuticals NASDAQ:CADX priced at $54 million and is a biopharmaceutical company developing agents for hospital settings.

Home Inns & Hotels Management NASDAQ:HMIN priced at $109.2 million and is a economy hotel chain in China.

Achillion Pharmaceuticals NASDAQ:ACHN priced at $51.8 million and is a biopharmaceutical company focused on the discovery, development and commercialization of innovative treatments for infectious diseases.

Optium Corporation NASDAQ:OPTM priced at $91 million and is a provider of high-performance optical subsystems for use in telecommunications and cable TV network systems.

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CapitalHunter.com was able to verify that $323 million of venture capital was invested in 28 U.S.-based companies during the past week. The average deal size was approximately 11.54 million. The amount of venture capital invested this period increased by 23% compared last periods $262 million.

California was the largest recipient of venture capital funding this week. Fourteen California companies raised $164.2 million in new equity financing, which accounted for 51% of the total venture capital invested this reporting period. The largest venture investment in California was placed into the earlier mentioned Zoom Systems.

The software sector raised the most venture capital this reporting period, with twelve companies raising $70.5 million in venture financing. Software companies accounted for over 25% of the venture capital this period. The largest venture investment in the software sector was placed into Tablus. Tablus raised $16 million in Series B funding from Trident Capital & Menlo Ventures and is a provider of digital content security software and services.

Start-ups raising their thrid stages of funding represented the largest share of the funding pie, as 42% of all money invested this period went into such companies, a sharp reversal from its statistical shutout last period. The largest Series C funding was placed into VaxInnate, which raised $40 million and develops vaccines for both pandemic and seasonal influenza.

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 $105 million:

A total of 62 equity financings of private and public companies occurred during this reporting period. Each of the 62 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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