Week 03/26/2007 through 04/01/2007

Prepared by Capital Hunter analysts:

Venture capital funding surged to $557 this period on the back of a few outsized investments, easily outpacing the $451 million raised by companies last period. The life sciences dominated, with approximately two-thirds of all venture capital going to companies in that space. CardioNet, which provides wireless cardiac monitoring services, raised a whopping $110 million from a collection of funds, although the company did not disclose the names of the firms who participated in the funding. The money CardioNet received was the largest funding in the health services sector since early 2006, when Massachusetts-based Health Dialog Services Corporation raised $170 million in a private recapitalization round. Biotechnology investment continued its dominance, as the sector received $147.9 million, more than the $134.3 million companies in the sector raised last period. MAP Pharmaceuticals was the largest recipient, raising over $50 million, mostly from hedge funds, including D.E. Shaw, the Perseus-Soros Biopharmaceutical Fund, Pequot Ventures, Skyline Capital & Brookside Capital. The company plans to use the infusion of capital to move its pediatric asthma and migraine drugs into Phase III clinical trials. Another biotech company, Aerovance, raised $28 million in Series C funding from Lehman Brothers, Apax Partners, Alta Partners, Clarus Ventures, Burril & Co. and NGN Capital and plans to use the capital to push their asthma drug Aerovant™ into Phase IIb clinical trials. Software investment mounted a small comeback, as the sector attracted over $50 million this period, but still well below historical norms. Whether this will be an ongoing trend remains to be seen, but it is certainly something to keep an eye on. Outside of life sciences, software and semiconductors, investment was quite dismal, with a smattering of sectors receiving anywhere between $2 million and $15 million. We expect venture capital to remain steady next period, with companies raising anywhere form $325-$550 million. Stay tuned.

The IPO market continued to do well, with seven companies listing this period, up from five the period before. The biggest of the bunch is Capital Product Partners, which despite its name is actually in the shipping business. The company owns a fleet of double-hull tankers, which it charters to larger companies. Other notable offerings include Flagstone Reinsurance Holdings, a Bermudese property and casualty reinsurer, Senorx, which develops medical technology fro breast cancer and GSI Technology, which develops static random access memory products. Without further ado, here are the seven companies that went public this period:

Aruba Networks NASDAQ:ARUN priced at $88 million and is a provider of enterprise solutions for the transmission of data across wireless networks.

eTelecare Global Solutions NASDAQ:ETEL priced at $74.3 million and is a Vietnamese provider of business process outsourcing services.

Super Micro Computer NASDAQ:SMCI priced at $64 million and is a provider of high-performance servers based on open-standard x86 architecture.

Senorx NASDAQ:SENO priced at $44 million and is a provider of minimally-invasive medical device for the treatment of breast cancer.

GSI Technology NASDAQ:GSIT priced at $33.7 million and is a provider of static random access memory products.

Flagstone Reinsurance Holdings NYSE:FSR priced at $175 million and is a provider of global reinsurance services.

Capital Product Partners NASDAQ:CPLP priced at $252.6 million and is a provider of double-hull tankers for charter.

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CapitalHunter.com was able to verify that $557 million of venture capital was invested in 36 U.S.-based companies during the past week. The average deal size was approximately 15.47 million. The amount of venture capital invested this period increased by 24% compared the last period’s $451 million.

California was the largest recipient of venture capital funding this week. Twenty California companies raised $288.0 million in new equity financing, which accounted for a whopping 69% of the total venture capital invested this reporting period. The largest investment in California was placed into the earlier mentioned CardioNet.

The biotechnology sector raised the most venture capital this reporting period, with only six companies raising $147.9 million in venture financing. Biotechnology companies accounted for approximately 27% of the venture capital this period. The largest investment in the sector was placed into the previously mentioned MAP Pharmaceuticals .

Start-ups raising their later (Series D+) 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 late stage funding was placed into the previously mentioned CardioNet.

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 $193 million:

A total of 65 equity financings of private and public companies occurred during this reporting period. Each of the 65 equity financings are profiled in a weekly report which include venture financings, private placements, secondary offerings, PIPE’s, and IPO’s.

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