VC Dollars Rise Above Pre-Recession Level in MoneyTree’s Second-Quarter Survey

the second quarter venture activity measured last week by the New York financial data firm CB Insights, which counted $7.6 billion in 768 startups nationwide. But unlike the MoneyTree Report, CB Insights showed a substantial increase in year-over-year dollars and deals. The data varies between the rival surveys because each firm relies on different sources, and uses different ways to count and categorize venture deals.

Some highlights of the MoneyTree data:

—Software was the biggest and busiest industry for venture capital during the second quarter, with $1.5 billion going into 254 deals, according to the MoneyTree Report. That was a 19 percent increase over the $1.3 billion that venture firms invested in software during the same quarter last year, with the number of deals relatively unchanged from 257 rounds done in the year-ago quarter. A comparison with the prior quarter looked better. The report said venture capital invested during the second-quarter was a 35 percent increase over the $1.1 billion invested, and a 25 percent increase over the 203 rounds completed during the first three months of 2011.

—Almost $1.4 billion was invested in a total of 189 Internet specific deals during the most-recent quarter. That was a 29 percent increase over the $1.05 billion invested in the same quarter last year and a 16 percent decline in the 225 deals.

—The MoneyTree Report counted $942.5 million and 81 deals in Q2 venture funding in the clean technology sector, a cross-category compilation that includes investments in alternative energy, pollution and recycling, power supplies, and conservation. That was a 36 percent drop from the $1.48 billion invested, and a 6.5 percent uptick from the 76 deals done in the same quarter last, according to MoneyTree data. It also was down from the prior quarter, when $1.2 billion was invested in 73 deals.

—Seed and early stage venture deals accounted for $2.4 billion and 464 deals during the quarter. The average seed deal was $3.2 million, up from $1.8 million in the first quarter. The average early stage deal was $5.8 million, down slightly from $6 million in the prior quarter.

—Expansion deals accounted for $2.3 billion and 260 deals, according to the MoneyTree survey. The average expansion stage deal was $9 million, down from $9.3 million in the previous quarter.

—Investments in later-stage venture deals amounted to $2.8 billion and 242 rounds. The average later-stage deal during the second quarter was $11.5 million, up from $10.8 million in the prior quarter.

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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.