Venture Trend Toward Smaller-Size Deals Continues as Survey Shows Big Q3 Funding Surge in Texas, Drop in Massachusetts

more than $1.9 billion into 192 healthcare companies.

California, Massachusetts, and Pennsylvania accounted for 53 percent of all U.S. healthcare deals, while most of the capital flowed to companies in California, Massachusetts, and (a tie) Washington and Texas. Massachusetts accounted for just 13 percent of the $1.75 billion invested nationwide (almost $228 million) during the quarter. That was down significantly from the prior quarter, when Massachusetts accounted for 23 percent of the total venture investments in healthcare nationwide (almost $377 million).

CB Insights also counted 233 Internet deals, which is usually the other major investment sector. The tally represented the largest number of deals in any sector during the quarter, but the total of venture capital invested in Internet companies was just over $1.25 billion. That was down nearly from the prior quarter. Still, it was an increase in both deals and dollars invested in comparison with the same quarter last year, when venture investors put over $1 billion into 194 Internet startups. About 71 percent of the deals and 70 percent of the capital went to Internet companies in just three states: California, New York, and Massachusetts.

Venture funding in cleantech amounted to $790 million that went into 61 deals nationwide during the third quarter, a 13 percent decline from the $913 million invested in 55 deals during the third quarter of 2009.

Texas had 15 percent of the U.S. cleantech deals during the quarter, which was more than Massachusetts, Colorado, and Oregon combined—and got more than twice as much venture capital. Overall venture funding jumped 68 percent in Texas—an incredible gain. Roughly $357 million was invested in 33 companies in Texas during

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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.