VC Investing Activity Shows Some Gains in Second Quarter, But Still Well Below 2008 Levels

Venture capital invested in U.S. startups during the second quarter was roughly half the amount invested during the same quarter last year, but two venture capital surveys found encouraging signs of improvement from the abysmal first three months of 2009.

VCs put $3.67 billion into 612 deals during the three months that ended June 30, according to the MoneyTree Report from PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters. That’s down 51 percent from the dollars VCs invested during the same quarter last year, when $7.56 billion went into 1,059 deals nationwide. On the bright side, the capital allocated from April through June represents a 15 percent gain over $3.2 billion invested during the first three months of the year, which hit the lowest level since the first quarter of 1997, according to the MoneyTree Report.

It’s also a less impressive rebound than was suggested in the early read on VC data we got last week from ChubbyBrain.

Q2 VC activity
Q2 VC activity

Dow Jones VentureSource highlighted a similar trend in the VC data it released over the weekend, which shows $5.27 billion was invested in 595 deals during the second quarter. While that’s still dramatically lower than the $8.3 billion that Dow Jones counted in 726 deals during the same quarter last year, it marks a 32 percent improvement over Dow Jones’ numbers for the first quarter. The trends spotlighted by the two reports are often comparable, but Dow Jones and MoneyTree use different methods, sources, and criteria to generate their respective data.

Beyond the broad trends, there are interesting details in both reports. For example:

—VCs invested a total of $1.5 billion in 160 life sciences companies during the second quarter—marking a 47 percent rebound over the prior quarter, according to the MoneyTree Report. “This is the most amount of money we’ve ever seen going into this sector, and considering the environment out there, that is quite a statement,” says Tracy Lefteroff, global managing partner of PricewaterhouseCoopers’ venture capital practice. Dow Jones VentureSource highlights a similar

Pages: Page 1, Page 2

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.