Q1 2006 Update

Sent on April 24, 2006

> Enterprise Celebrates 2 Successful M&A Transactions
> New Deal in New Media

   > Enterprise Ends 2005 with Record Year
> Senyei has the Midas Touch
> Nierenberg Promoted

Enterprise Celebrates 2 Successful M&A Transactions in 6 Weeks: Ascendent Sold to RIM and PathScale Sold to Qlogic

March 2006: Research in Motion (RIM) Acquires Ascendent Systems


RIM, the maker of BlackBerry e-mail devices acquired Ascendent Systems, an Enterprise Partners portfolio company that makes software connecting cell phones to a corporate phone switch, or PBX, enabling office-phone functions like simultaneous ringing at several locations, call transfer and spontaneous teleconferencing.

Bob Conn, managing director of Enterprise Partners said, "We are extremely pleased that RIM has recognized the value Ascendent brings to enterprise customers. Ascendent represents the type of compelling innovation, in this case enabling the extension of desk phone functionality to mobile users who nonetheless will have a single phone number, that allows us at EPVC to deliver significant returns to our investors and to the entrepreneurs and employees of our companies."

Feb. 2006: PathScale, a developer of high-performance computing technologies was acquired by QLogic (NASDAQ: QLGC-News) for $109M in cash and stock options.


Bob Conn, managing director of Enterprise Partners Venture Capital noted. "PathScale's truly disruptive approach to data-center interconnects exemplifies the type of technology innovation that Enterprise Partners seeks to foster. QLogic's acquisition generates a healthy return for our investors and supports our commitment to early-stage technology companies."

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New Deal in New Media:

vMix Extends Enterprise's Media Portfolio


vMix, a San Diego based company, was founded by executives from Fox Studios, Universal Music Group and Mp3.com, and provides a custom video experience to users. The company provides a set of exclusive tools such as PJ 60, that allow users to create musical slideshows within minutes using custom frames from their digital photographs. vMix uses a proprietary, video content filtering management system to ensure that no obscene material is shown to the public.

Carl Eibl, managing director of Enterprise Partners Venture Capital said, "vMix pairs a compelling vision for user-generated video with a founding team that offers a strong 'mix' of technology, entertainment, and business experience. The company perfectly illustrates why Southern California is the creative hotbed for the next generation of digital media opportunities."

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Enterprise Ends 2005 with Record Year: 30 Investments, $270M Raised

Carl Eibl, managing director of Enterprise Partners, announced that 2005 was one of the most active in the firm's 20 year history. "Enterprise Partners led investments in over 30 new and follow-on transactions, raising a total of $270M, $120M of which came from Enterprise funds. This has been an amazingly productive year for the firm and for our syndicate partners."

Enterprise invested in 10 new companies, 3 in the life sciences, 6 in emerging market technologies and 1 other, as yet unannounced. Syndicate partners include:
  • Alloy Ventures, August Capital, Kleiner Perkins Caufield & Byers, Domain Associates, JAFCO Ventures, Rho Ventures, Sequoia Capital, Storm Ventures, Versant Ventures, Zions Bancorp

2005 New Investments


Life Sciences
  • Anaborex: Early stage biotech company focused on metabolic disease
  • Celladon: Early stage gene therapy company combining catheter technology with therapeutics to combat congestive heart failure
  • Celula: Early stage biotech company addressing detection of fetal abnormalities Technology
  • 3Leaf Networks: Early stage company developing scalable virtual server infrastructure
  • DeviceScape Software: Early stage company that provides wireless software for devices
  • Expresso Fitness: Early stage company with interactive gaming software for exercise equipment
  • Identrus: Established company delivering the global standard for digital identity authentication
  • Muze: Buyout. Leading online and retail source of entertainment information and metadata for music, books and video games
  • WideRay. Early stage company delivering digital content to wireless devices in retail stores

2005 Follow-Ons and Exits


Life Sciences
  • Adeza (NASDAQ: ADZA)
  • Genoptix
  • Opthonix
  • TargeGen
Technology

  • Ascendent Systems
  • Breach Security
  • DragonWave
  • Hammerhead
  • M7 Networks (acq. by Motricity)
  • Netsift (acq. by Cisco)
  • NEXX Systems
  • NP Photonics
  • Nuelight
  • PathScale
  • Persona Software
  • Pivotal Systems
  • Preventsys
  • Quorum Systems
  • SKY MobileMedia
  • Xifin

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Senyei has the Midas Touch

Drew Senyei, managing director of Enterprise Partners, was named to the 2006 Forbes list of top 100 US VCs. The Midas List is produced annually by Forbes Magazine and ranks the best dealmakers in high-tech and life sciences. Forbes Magazine seeks to identify individuals who deploy venture capital to create wealth for their investors and build valuable, long-lasting companies.

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Nierenberg Promoted

Erik Nierenberg, who joined Enterprise Partners in 2004, was promoted to Principal with the firm and will work with entrepreneurs and portfolio companies on business strategy, operations, and capital structuring. Nierenberg also works extensively at the Board level and with senior management within current EPVC portfolio companies including: Enviance, Pivotal Systems, Ascendent Systems, Tradebeam, and DragonWave.

Prior to joining Enterprise Partners, Nierenberg spent five years with Bain & Company Nierenberg graduated with distinction in Economics from Pomona College where he was captain of the lacrosse team. He also studied at the University of Edinburgh in Scotland and received an M.B.A. from the Stanford Graduate School of Business.
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