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A Current Update on U.S. Risk Capital Markets Ivar Sorensen, Managing Partner, The M&A Group, LLC

A Current Update on U.S. Risk Capital Markets Ivar Sorensen, Managing Partner, The M&A Group, LLC. Historical U.S. Venture Investments. Total Annual U.S. Venture Capital Investment ($ Millions).

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A Current Update on U.S. Risk Capital Markets Ivar Sorensen, Managing Partner, The M&A Group, LLC

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  1. A Current Update on U.S. Risk Capital Markets Ivar Sorensen, Managing Partner, The M&A Group, LLC

  2. Historical U.S. Venture Investments Total Annual U.S. Venture Capital Investment ($ Millions) Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  3. Stage of Development Annual U.S. VC Investment ($ Millions) U.S. VC Average Investment Size ($ Millions) Seed Seed Early Stage Early Stage Expansion Stage Expansion Stage Later Stage Later Stage Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  4. Medical Devices & Equipment Annual U.S. VC Investment ($ Millions) U.S. VC Average Investment Size ($ Millions) Total Investment Less Medical Device s & Equipment Total Investment Less Medical Device s & Equipment Medical Device s & Equipment Medical Device s & Equipment Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report, Data: Thomson Reuters

  5. Medical Devices & Equipment Sub Segment Total Global VC Funding by Sub Segment ($ Millions) Medical Therapeutics Medical / Health Products Medical Diagnostics Source: PricewaterhouseCoopers Capital Crunch May 2013

  6. Returns by Investment Class (NAV Index) VC investments have consistently underperformed most every other asset class since 2001

  7. Performance by Fund Type The performance of VC Funds has consistently lagged other alternative fund types over the last decade

  8. Global VC IRR Quartiles by Vintage More than a quarter of all VC funds raised since 2001 currently have a negative IRR

  9. Key Takeaways VC investment spending has been fairly consistent since 2003 Total investments made and average investment size increase as companies move up the development curve Investment in medical devices & equipment, both in total amount invested and average investment size, mainly track the total VC market Global VC funds have underperformed most every other asset classes for the past decade Poor performance = fewer investment dollars

  10. Implications for Medical Technology Industry The best opportunities are still being funded

  11. Medical Devices & Equipment Recent Exits

  12. Implications for Medical Technology Industry Full Cycle Funding Plan Diagnostics and IT Related • Less capital needed = less financial upside • Alternative capital sources including: • Grants • Angels • FFFs • User Groups Open capital structure Seek later stage funding sources day 1 Engage strategic partners sooner, not later

  13. Contact Information Ivar Sorensen: p 612.375.1190 ivar@m-a-group.com Address: 3565 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402 www.m-a-group.com

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