VC Funding Still Robust as Year-to-Date Total Exceeds 2013

Venture capital activity is down from a 13-year high during the second quarter, but a new MoneyTree Report released today shows that venture funding was still going strong in the three months that ended Sept. 30, with $9.9 billion invested in 1,023 deals.

That was almost a 27 percent drop from the $13.5 billion that VCs invested in the previous quarter, and a 9 percent decline in deals, according to MoneyTree data—reinforcing the early returns from CB Insights on third-quarter venture capital activity.

The MoneyTree Report, prepared by Pricewaterhouse Coopers and the National Venture Capital Association from data provided by Thomson Reuters, doesn’t always align with the quarterly survey from CB Insights. Another source of data on VC activity, Dow Jones VentureSource, reported that VCs invested $11 billion in 899 deals nationwide over the three months that ended Sept. 30—but also showed that was a decline from a surge in the previous quarter.

The absolute numbers vary because of different criteria that each group uses to count venture deals, investment tranches, and types of deals. There even are significant differences between VentureSource and MoneyTree in listing the biggest venture deals each quarter. (Our list of MoneyTree’s Top 10 Deals is below.)

Nevertheless, all three sources show that venture funding is running at a higher rate in 2014 than it has in years. According to the MoneyTree Report, venture firms have invested more than $33 billion in U.S. startups through the first three quarters of 2014—already surpassing the $29.8 billion total that VCs invested in all of 2013.

Software continues to get more venture funding than any other sector, with VCs investing $3.7 billion in 418 deals in the third quarter, according to the MoneyTree Report. While that was down from the previous quarter, Internet-specific investments remained steady, as VCs invested almost $3.2 billion in 248 deals during the quarter.

Assuming venture investments of $9 billion or so in the fourth quarter, the total for 2014 should come in around $42 billion. That would be almost 41 percent more than last year’s total, and about 61 percent higher that the $26 billion average total over the previous five years.

The number of deals, however, is running at

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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.