Week 04/16/2007 through 04/22/2007

Prepared by Capital Hunter analysts:

Venture capital investment rose to $511 million this period, a small increase from the $472 million raised last period. Medical device investment took charge, as over $142 million went into the sector, including $85 million for plastic surgery technology company Sientra and $20 million for electrosurgical company SurgRx. Digital media companies also managed to do well this period, taking in over $125 million, most of which found its way into Howstuffworks.com, an instructional website which raised a shocking $75 million from corporate raider Carl Icahn, Chilton Investment Company and Chartwell Investments. Another media site, Reunion.com, which allows people to reunite online, raised $25 million from Oak Investment Partners and plans to use the capital to claim market share in a space dominated by players such as MySpace.com, Classmates.com, and others. Biotech investment remained relatively strong, as the sector claimed $66 million, well below the medical device and digital media sectors but ahead of every other industry. Software investment is starting to pick up again, with nine companies raising in excess of $47 million, still below what the sector normally receives but enough to keep pace with other industries with the exception of biotechnology, which with the exception of the past few weeks has been on a tear. We expect venture capital investment to remain in the $375-$550 million range, but if an outsized investment comes along, it will almost certainly distort our projections. Stay tuned.

The IPO market rebounded somewhat, with three companies (along with two blank check offerings and a fund) listing, up from the lone IPO, Comverge, last period. MetroPCS Communications was the biggest of these new listings, taking in over a billion dollars, making MetroPCS the largest IPO since MasterCard’s $2 billion take late last year. The Dallas-based company offers unlimited wireless broadband coverage on a flat rate basis, and the business model has proven highly successful thus far. Another company, China-based Simcere Pharmaceutical Group, raised over $200 million and is a provider of generic drugs throughout China. You can read the synopses of these companies through Yahoo! Finance below. Without further ado, here are the three companies that went public this period:

MetroPCS Communications NYSE:PCS priced at $1.15 billion and is a provider of flat rate wireless broadband services.

Superior Offshore International NASDAQ:DEEP priced at $152.5 million and is a provider of subsea construction and commercial diving services to the oil & gas sector.

Simcere Pharmaceutical Group NYSE:SCR priced at $95.4 million and is a provider of clean energy solutions to utilities in order to mitigate energy usage during peak usage.

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CapitalHunter.com was able to verify that $511 million of venture capital was invested in 33 U.S.-based companies during the past week. The average deal size was approximately 15.48 million. The amount of venture capital invested this period increased by 8% compared the last period’s $472 million.

California was the largest recipient of venture capital funding this week. Eighteen California companies raised $324.8 million in new equity financing, which accounted for 63% of the total venture capital invested this reporting period. The largest investment in California was placed into Sientra.

The medical device sector raised the most venture capital this reporting period, with six companies raising $142 million in venture financing. Medical device companies accounted for approximately 29% of the venture capital this period. The largest investment in the sector was placed into the previously mentioned Sientra.

Start-ups raising their second stages of funding represented the largest share of the funding pie, as 54% of all money invested this period went into such companies. The largest Series B investment was placed into the previously mentioned Sientra.

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 $185 million:

A total of 54 equity financings of private and public companies occurred during this reporting period. Each of the 54 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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