Q3 Venture Deals Regain Some Lost Altitude, With $6B Invested Nationwide

The storm may not have entirely passed, but the venture capital industry unbattened the hatches during the three months that ended in September. At least that’s the sense I get from a 69-page report on U.S. venture investing, which we get from New York-based ChubbyBrain, an information services firm developing tools for investors, startups, and aspiring entrepreneurs.

In its “Pulse of the Innovation Economy” report, ChubbyBrain says just over $6 billion in venture capital funding was invested in 680 deals nationwide. That’s down almost 16 percent from the $7.2 billion that VC firms invested in privately held companies during the third quarter of 2008, but a 14 percent increase in deployed capital compared with the previous quarter of this year. It’s a sign that technology-based startups are gaining increased momentum from the winter of ‘09, especially considering the increased valuations in public markets that even includes some IPOs, such as the recent public offering of Watertown, MA-based A123Systems. The report notes that the momentum for venture investments picked up during the quarter, with September accounting for 40 percent of the deals nationwide.

California—and especially Northern California—remains in a class by itself for venture activity, according to the report. Just over half (51 percent) of the total number of deals went down in the Golden State (along with 56 percent of the total capital invested, or $3.4 billion). California was followed by Massachusetts, Texas, New York, and Georgia. The state of Washington ranked No. 7 on the ChubbyBrain list of top 10 states for venture activity.

ChubbyCA

Two Xconomy cities also placed among the top 10 nationwide in terms of overall VC funding and deal activity. San Diego, which had 28 deals totaling $280 million, ranked third overall, behind

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.