Week 11/06/2006 through 11/12/2006

Prepared by Capital Hunter analysts:

Venture capital investment slipped to $311 million this period, a 24% drop from the $409 million raised by companies last period. This drop is due to both the large percentage of early stage deals and the lack of large late stage financings this period. With the exception of Solstice Neurosciences, which raised $85 million in Series B debt and equity financing ($50 million equity, $35 million debt), no company managed to raise more than $22 million. Despite the mediocre amounts, many different sectors managed to raise money. Software companies received the most investment, but medical device, semiconductor and online media companies received their share as well. This is the second straight week that online media grabbed a significant portion of venture capital, and if you include natural search engine PowerSet and local events site Zvents (both were classified as software, as we normally classify search engines, but a case could be made for including such companies under the media & entertainment label) the weekly percentage goes to 15%. As we said last newsletter, it is too early to tell if a bubble is forming in Web 2.0 investment, but it wouldn’t surprise us if this becomes the case, as the biggest homeruns VCs have made the past few years have mainly come from online investments, such as MySpace, YouTube, and Skype. Only time will tell.

The IPO market continued to gain momentum, with no less than ten companies going public this period, up from an already impressive seven last period. OneBeacon Insurance was by far the largest IPO, raising over $600 million, the largest pure IPO since Douglas Emmett went public in late October. 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 ten newest companies:

Catalyst Pharmaceutical Partners NASDAQ:CPRX priced at $20.1 million and is a provider of prescription drugs for drug addiction.

Physicians Formula Holdings NASDAQ:FACE priced at $127.5 million and is a provider of skin cosmetics.

OneBeacon Insurnace Group NYSE:OB priced at $600 million and is a provider of property and casualty insurance.

KBW NYSE:KBW priced at $142.8 million and is a provider of both investment banking services and securities trading and research.

Canadian Solar NASDAQ:CSIQ priced at $115.5 million and is a provider of solar panels.

AdCare Health Systems AMEX:ADK.U priced at $6.7 million and is an operator of retirement communities, assisted living facilities and nursing homes.

Thermage NASDAQ:THRM priced at $42 million and is a provider of medical technology for the treatment of wrinkles.

Metabolix NASDAQ:MBLX priced at $95.2 million and is a provider of environmentally-friendly bioplastics.

Capella Education NASDAQ:CPLA priced at $80 million and is a provider of online post-secondary education services.

ACA Capital Holdings NYSE:ACA priced at $89.7 million and is a provider of guaranty insurance to the credit derivatives and structured finance capital markets.

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 $311 million of venture capital was invested in 32 U.S.-based companies during the past week. The average deal size was approximately 9.72 million. The amount of venture capital invested this period decreased by 24% compared last periods $409 million.

California was the largest recipient of venture capital funding this week. Sixteen California companies raised $178.7 million in new equity financing, which accounted for 57% of the total venture capital invested this reporting period. The largest venture investment in California was placed into the earlier mentioned Solstice Neurosciences.

The software sector raised the most venture capital this reporting period, with ten companies raising $70.9 million in venture financing. Software companies accounted for over 23% of the venture capital this period. The largest venture investment in the software sector was placed into PowerSet. PowerSet raised $12.5 million in Series A funding and is a natural language search engine startup.

Start-ups raising their second stages of funding represented the largest share of the funding pie, as 42% of all money invested this period went into such companies. The largest Series C funding was also placed into Solstice Neurosciences.

The three largest venture deals this period are as follows:

The following nine companies and other unnamed investors funded the above mentioned top three venture capital investments for $92 million:

A total of 68 equity financings of private and public companies occurred during this reporting period. Each of the 68 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