Internet media financing - Tie presentation feb 23

February 23rd, 2011

Internet Media Funding

Presentation to TIE Vancouver

Prepared by:

Brent Holliday, Partner

Capital West Partners

[email protected]

Page 1

Where would you be putting

your money if you were an

investor?

Public markets don’t have any

social media companies to

choose from yet...


Page 2

Announced M&A values

show a nice rebound, but

look at the Y axis...

High growth Internet Media

properties are selling in the 7-

10x trailing revenue in the past

4 months.


1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2

2008 2009 2010

North America Information Technology M&A Average EV/LTM Revenue

LBO

Strategic

1

1.5

2

2.5

3

3.5

4

4.5

2008 2009 2010

North America Internet Media M&A Average EV/LTM Revenue

LBO

Strategic

Page 3

Venture Investing

Silicon Valley VCs are more

optimistic today about their

investments that at any time

since 2007 (Silicon Valley VC

Confidence Index at 3.75 out of 5,

January 2011)


$3.9

$5.3

$6.1

$5.5$5.9 $5.9

$5.4

$6.5

483

613678 687

730

612

715 735

Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Quarterly VC Investment and Deal Volume TrendQ1 '09 to Q4 '10

Funding ($B) # of Deals

www.cbinsights.com

Page 4

The hottest sector in VC is

Internet related...


$1,483$1,265

$1,618

$1,253

$2,543224 221

233 233

272

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Internet VC Investment and Deal Volume Trend

$ Funding # of Deals

www.cbinsights.com

Last Five Quarters

Page 5

The VCs are attracted to

the earliest stages,

including Seed, typically

where angels play...


11% 11% 12% 13% 13%

38% 33%40%

42% 38%

27%28%

23%20%

18%

13% 17%18% 15%

19%

8% 6%6% 5%

5%

4% 6% 1% 4% 7%

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

Share of Internet VC by Series - Number of Deals

Seed Series A Series B Series C Series D Series E +

www.cbinsights.com

Last Five Quarters

Page 6

But the biggest jump was in

the later stage Internet

Media deals...


$0.6

$2.4

$7.0

$9.0

$19.0$20.0

Seed Series A Series B Series C Series D Series E +

Internet Median Deal Size by Quarter($ Million)

Q4'09 Q1'10 Q2'10 Q3'10 Q4'10

www.cbinsights.com

Page 7

Later stage funds, aka

Private Equity, have a

supply problem...


$485

$2.56 $7.97

$20.33 $29.17

$111.67

$159.12

$114.57

$39.94

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$0

$20

$40

$60

$80

$100

$120

$140

$160

2003 2004 2005 2006 2007 2008 2009 2010

Cumulative Overhang Under $100M $100M-$250M $250M-$500M $500M-$1B $1B-$5B $5B+$ in Billion As of 10/31/2010

Source: PitchBook

Global Private Equity – Capital Raised and Cumulative

Overhang of Un-Invested Funds

Page 8

So they are pouring more

money into more deals from

growth investing to

buyouts...


11.06

13.26

19.75

-

5.00

10.00

15.00

20.00

25.00

Q2 2010 Q3 2010 Q4 2010

Average Deal Value -IT Private Placements (closed)

without Facebook

Page 9

Rather than IPO today, the

biggest Internet media

companies are taking

private equity...

Presumably solving

everyone’s immediate

problem:

Liquidity

Cash for acquisitions

No red tape


Page 10

Today’s Panel

We will discuss the gamut

of financing:

Angel/Seed financing for

Internet Media companies

VC financing for Internet

Media companies

Private Equity financing and

buyouts for Internet Media

companies


Page 11

Agenda

Each speaker introduces

their company and the

stage and experience in

Internet Media investing

A few questions from Brent

Audience asks questions


Page 12

Mary Meeker (Kleiner, Perkins, Caufield and Byers) Slides

http://www.slideshare.net/kleinerperkins/kpcb-top-10-mobile-trends-feb-2011















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Economy & Finance

Internet media financing - Tie presentation feb 23