Venture Trend Toward Smaller-Size Deals Continues as Survey Shows Big Q3 Funding Surge in Texas, Drop in Massachusetts

10/13/10Follow @bvbigelow

Our friends at CB Insights made an early break out of the gate again today with data on venture capital investments in private companies, this time reporting total VC funding of $5.4 billion in 715 deals nationwide for the third quarter that ended Sept. 30.

The CB Insights Venture Capital Activity Report shows, though, that venture investing continues to seesaw, with mixed results in many sectors. The New York information services company notes that the $5.4 billion total for the quarter is the lowest U.S. funding level since mid-2009. On the other hand, the CB report says the 715 deals is the second-highest tally over the past two years—July was particularly strong with 298 deals—and “would suggest optimism given the quarter’s dealflow strength.”

CBinsightsVCQ32010

CB Insights also charted a re-emergence of seed-stage deals, from 1 percent of the deals in the third quarter of 2009 to 11 percent of total deals across a variety of sectors in the same quarter this year. CB says that also indicates “a healthy early-stage investment environment.” In short, CB’s numbers show that VCs throughout the country are funding a larger number of smaller deals.

Healthcare was the single largest sector for dollars invested, as usual, with more than $1.75 billion invested in 184 deals nationwide during the three months that ended September 30. Yet it declined from the same quarter of 2009, when venture firms put … 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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  • http://www.adwebix.com Ashley

    The increase in the number of smaller deals is also consistent with the current economic environment. Moreover, it counts that in the last couple of years many consumer Internet startups have become less capital intensive.

    Related, entrepreneurs and companies seeking funding may also want to go check http://www.adwebix.com – an online hub dedicated to helping early stage companies find financing.

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