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

10/13/09Follow @bvbigelow

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 … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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