Disparities in First Quarter VC Activity, the San Diego Subsidence, and Top 10 Local Deals

“”Figures often beguile me,” Mark Twain wrote more than a century ago, as he worked his way up to the proposition that “There are three kinds of lies: ‘lies, damn lies, and statistics.'” I wonder what the cantankerous Twain would say today about the disparities in data concerning venture capital activity that are issued each quarter.

The first quarter venture capital investment activity that came in yesterday from the New York data services firm CB Insights showed a substantial gain in nationwide funding. Now comes the MoneyTree Report, which shows a modest increase in capital and a decline in the number of deals.

According to the MoneyTree Report, venture capitalists invested $5.9 billion in 736 deals nationwide during the first quarter of 2011. That was a 13.7 percent increase in capital and a 6.4 percent decrease in the deal count, compared to the same quarter in 2010, when nearly $5.2 billion went into 787 deals nationwide. The report is prepared by the National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters.

CB Insights said yesterday that VCs invested $7.5 billion in 738 deals during the first quarter. That was a 27 percent increase in dollars and a 1 percent gain (which isn’t a significant change) in deal count over the first quarter of 2010, when CB Insights counted $5.9 billion and 730 deals.

The numbers vary because the surveying firms rely on different sources, and they use different ways to count and categorize venture deals. For example, CB Insights counted half of the $950 million funding deal that Groupon announced in December in the fourth quarter of 2010 and half in the first quarter of 2011. What one firm counts as a cleantech deal another might count as energy or IT.

A more worrisome trend has been unfolding in the MoneyTree data about venture investment activity in San Diego. CB Insights doesn’t provide regional data in its report, and MoneyTree found that VCs invested just over $100 million in 22 San Diego startups during the first quarter of 2011. That’s a 55 percent drop in capital and a 29 percent decline in deals from the first quarter of 2010, when venture investors put nearly $223 million into 31 companies.

There was also a drop for the San Diego region during the

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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.