Stepping Down in San Diego: Venture Funding and Our Top 10 List of Fourth Quarter VC Deals

Venture investing in San Diego declined substantially during the last three months of 2010, according to additional data coming in today from Dow Jones VentureSource, and from the MoneyTree Report.

VentureSource found that venture firms invested $154.3 million in 21 San Diego startups during the fourth quarter of 2010. That was a 27 percent decline in capital and a 5 percent decline in deals from the $210.7 million that went into 20 deals during the same quarter in 2009.

The MoneyTree Report showed a 43 percent drop in venture capital invested during the fourth quarter in San Diego, with a 25 percent decline in deals. (Venture firms put $193.1 million into 26 startups in the quarter, down from $343.9 million in 32 companies during the same quarter in 2009).

Both surveys also showed an overall decline in San Diego venture funding for the year, with MoneyTree counting $846.9 million as a 10 percent decrease in capital invested from 2009 and VentureSource counting $655.8 million as a 28 percent drop from 2009. MoneyTree found that the number of deals in San Diego increased slightly (to 115 from 109) in 2010 while VentureSource said the number of deals declined (to 84 from 87).

“We are relatively flat year-over-year on the number of deals,” says Dan Kleeburg, a life sciences audit partner with Ernst & Young in San Diego. “On the value of deals, I agree that we’re down.” Kleeburg noted that San Diego’s strength lies in the life sciences sector and IT (especially networking and communications), which were weak areas for venture investing nationwide.

“Anecdotally, what I would say is there has clearly been a positive change in

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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.