Surveys Agree on Rising Tide of VC Activity, But Differ on the Ebb and Flow

Bruce V. Bigelow4/19/10Follow @bvbigelow

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deals list we got from MoneyTree. (CB Insights did not provide a top deals list for specific cities.)

Some other observations from the data:

—While all three surveys showed year-over-year increases, both MoneyTree and VentureSource said venture activity during the first three months of 2010 had declined from the previous quarter. Analysts nevertheless concluded that the climate for venture investing appears to be improving, and the NVCA noted encouragingly that market conditions for venture-backed exits had improved, with nine venture-backed startups going public during the quarter—compared to none during the same quarter last year. The NVCA also said the total of 111 venture-backed startups acquired during the first quarter was the highest number ever.

—All three surveys showed a sharp increase in VC investments in cleantech and energy startups. The MoneyTree Report said clean technology firms raised $773 million, an 87 percent increase from the previous quarter. About half of the top 10 deals of the quarter involved companies focused on clean energy, with electric vehicle maker Fisker Automotive of Irvine, CA, getting $115.3 million during the quarter.

—Dow Jones VentureSource said investments in information technology startups (which includes communications, computers, semiconductors, and software) continues to be the biggest sector for VC investing—accounting for almost a third of the deal flow during the quarter.

—The MoneyTree Report (which splits software, computers, and IT services into separate categories) said life sciences continues to rank as the No. 1 sector, accounting for 28 percent of the $4.7 billion invested during the quarter. Even so, the $1.3 billion invested in life sciences was down by 26 percent compared to the previous quarter. CB Insights, which also classifies healthcare as the largest single sector for venture money, said VC investments in healthcare declined from the previous quarter by 24 percent, to almost $1.4 billion.

[Editor's note: Special thanks to Xconomy Boston Assistant Editor Erin Kutz for help with this chart.]

*From PricewaterhouseCoopers, National Venture Capital Association, and Thomson Reuters

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