Week 04/30/2007 through 05/06/2007

Prepared by Capital Hunter analysts:

Venture capital investment rose to $438 million this period on the back of strong software investment, the second time in as many weeks that software has been venture capitalists top destination. ChannelAdvisor, which provides marketplace management software, raised $30 million from the likes of eBay, New Enterprise Associates, Kodiak Venture Partners and Advanced Technology Ventures, and is the largest pure software funding since Dexterra raised $35.56 million back in February of this year. The capital is going to be used to expand operations into the paid search arena as well as expand internationally. Life science investment remained strong, as biotechnology and medical device companies combined for over $130 million, which as a percentage is a bit off from past weeks but solid nevertheless. AVEO Pharmaceuticals, which is currently developing next-generation cancer therapeutics, raised $53 million in Series D funding from both corporate and private equity firms and plans to use the capital to expand their pipeline of cancer drugs. ReVision Optics, a medical device company currently developing contact lenses for people with presbyopia, raised $25 million from Domain Associates, Canaan Partners and InterWest Partners and is the largest medical device funding this period. Other sectors, including semiconductors, networking equipment, business services, IT services, digital media and alternative energy, fared less well, ranging from the $28 million networking companies received all the way to nothing, as the only semiconductor deal this period was a company headquartered in Canada. We expect funding to be around $375-$575 next period, although if is always hard to get a good projection from week-to-week. Stay tuned.

The IPO market continued to do well, with five companies listing this period, which is less than the seven that did so last period but considering it is early in the month and for at least for the past few months IPOs have generally been concentrated in the final week of any given month, such numbers may portend good things to come. The most notable IPO this period was Interactive Brokers, which follows MetroPCS a few weeks ago as another billion dollar plus IPO, as Interactive priced at $1.2 billion, $50 million more than MetroPCS. The stock surged on its first day of trading, but has come down a bit, as the company currently sits about 6% off of its original price. Two venture backed companies, Cavium Networks and NeurogesX, went public this period as well. Cavium raised over $50 million from venture firms including Menlo Ventures, Beachhead Ventures, Neocarta Ventures and Diamondhead Ventures and NeurogesX raised over $80 million from ARCH Venture Partners, Alta Partners, Montreux Equity Partners, Walden International, TIAA-CREF, Global Life Science Ventures, and other corporate firms. For a description of each company just click on the Yahoo! Finance link below. Without further ado, here are the five companies that went public this period:

NeurogesX NASDAQ:NGSX priced at $44 million and is a developer of neuropathic therapeutics.

Cavium Networks NASDAQ:CAVM priced at $91.1 million and is a provider of IC technology for network and security equipment.

Qiao Xing Mobile Communications NYSE:QXM priced at $160 million and is a manufacturer of mobile handsets in China.

Acorn International NYSE:ATV priced at $119.4 million and is an integrated multi-platform marketing company in China.

Interactive Brokers Group NASDAQ:IBKR priced at $1.2 billion and is a provider of automated global electronic routing services for a wide range of financial instruments.

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CapitalHunter.com was able to verify that $438 million of venture capital was invested in 36 U.S.-based companies during the past week. The average deal size was approximately 12.17 million. The amount of venture capital invested this period increased by 56% compared the last period’s $281 million.

California was the largest recipient of venture capital funding this week. Twenty-three California companies raised $239 million in new equity financing, which accounted for 54% of the total venture capital invested this reporting period. The largest investment in California was placed into Pure Digital Technologies. Pure Digital Technologies raised $40 million in Series F funding and is a provider of low-cost digital camcorders.

The software sector raised the most venture capital this reporting period, with seven companies raising $87 million in venture financing. Software companies accounted for approximately 25% of the venture capital this period. The largest investment in the sector was placed into the previously mentioned ChannelAdvisor.

Start-ups raising their later stages of funding represented the largest share of the funding pie, as 35% of all money invested this period went into such companies. The largest late stage funding was placed into the previously mentioned AVEO Pharmaceuticals.

The three largest venture deals this period are as follows:

The following nineteen companies and other unnamed investors funded the above mentioned top three venture capital investments for $123 million:

A total of 64 equity financings of private and public companies occurred during this reporting period. Each of the 64 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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