Week 12/11/2006 through 12/17/2006

Prepared by Capital Hunter analysts:

Venture capital investment was up this period to $307 million, better than the abysmal $223 million companies raised the week before but still well below the weekly averages for this year. Software and medical device investment once again led the pack but this time industries that were either shut out or nearly shut out last period such as biotechnology, alternative energy, semiconductors and online media received significant amounts of capital as well. The largest investment of the period was placed into Ophthonix, a San Diego-based company which produces and distributes high-definition contact lenses, which raised $35.1 million in Series D funding from big name venture firms Kleiner Perkins Caufield & Byers, Enterprise Partners Venture Capital, and DAG Ventures and included investments from InterWest Partners, Palo Alto Investors, Gund Investment Corporation, Trex Enterprises and Wasatch Advisors. Another company that received a sizable investment was Virxsys, which received $20 million in Series G funding via an exercise of warrants from the previous round of financing in order to continue their Phase II trials of VRX496, a gene-based immunotherapy for the human immunodeficiency virus (HIV). Other companies receiving significant funding include semiconductor manufacturer Artimi ($26.5 million in Series B funding), advanced materials solutions provider Accelergy ($25 million in Series B funding) and mobile software provider Seven Networks ($22 million in additional Series D funding). Hopefully this will be the week where things get back on track, but the holiday season coupled with the fact that many expect slower economic growth ahead may signal lower weekly totals going forward into the new year. Only time will tell.

The IPO market, after a relative slow past couple of weeks, absolutely exploded with activity last period, with no less than seventeen companies going public. This is to be expected, however, considering the fact that sixteen companies went public at about this time last year and many companies decide to list before the heart of the holiday season. The largest IPO of the period was Genesis Lease, an Irish-based acquirer and lessor of commercial jet aircraft, which raised approximately $640 million on its first day of trading. Other notable IPOs include IPG Photonics, Isilon Systems, Cal-Dive International, Double-Take Software and Newstar Financial. 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 seventeen newest companies:

Medecision IPG Photonics, Guidance Software Atlas Energy Resources WSB Financial Group Teekay Offshore Partners Obagi Medical Products Genesis Lease DCT Industrial Trust U.S. Bioenergy NewStar Financial Isilon Systems Double-Take Software Carrols Entertainment Cal-Dive International Altra Holdings Affymax

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CapitalHunter.com was able to verify that $307 million of venture capital was invested in 34 U.S.-based companies during the past week. The average deal size was approximately 9.03 million. The amount of venture capital invested this period increased by 38% compared the last period’s $223 million.

California was the largest recipient of venture capital funding this week. Eighteen California companies raised $209.3 million in new equity financing, which accounted for 63% of the total venture capital invested this reporting period. The largest venture investment in California was placed into the earlier mentioned Ophthonix.

The software sector raised the most venture capital this reporting period, with nine companies raising $74.2 million in venture financing. Software companies accounted for approximately 23% of the venture capital this period. The largest venture investment in the medical device sector was placed into the earlier mentioned Seven Networks. Seven Networks raised $22 million in additional Series D funding and is a provide of mobile software used to access e-mail applications.

Start-ups raising their second stages of funding represented the largest share of the funding pie, as 39% of all money invested this period went into such companies. The largest Series B funding was placed into Artimi. Artimi raised $26.5 million and is provider of semiconductor technology for ultra wideband (UWB) applications.

The three largest venture deals this period are as follows:

The following eleven companies and other unnamed investors funded the above mentioned top three venture capital investments for $91.6 million:

A total of 72 equity financings of private and public companies occurred during this reporting period. Each of the 72 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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