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

10/13/10Follow @bvbigelow

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more than $1.9 billion into 192 healthcare companies.

California, Massachusetts, and Pennsylvania accounted for 53 percent of all U.S. healthcare deals, while most of the capital flowed to companies in California, Massachusetts, and (a tie) Washington and Texas. Massachusetts accounted for just 13 percent of the $1.75 billion invested nationwide (almost $228 million) during the quarter. That was down significantly from the prior quarter, when Massachusetts accounted for 23 percent of the total venture investments in healthcare nationwide (almost $377 million).

CB Insights also counted 233 Internet deals, which is usually the other major investment sector. The tally represented the largest number of deals in any sector during the quarter, but the total of venture capital invested in Internet companies was just over $1.25 billion. That was down nearly from the prior quarter. Still, it was an increase in both deals and dollars invested in comparison with the same quarter last year, when venture investors put over $1 billion into 194 Internet startups. About 71 percent of the deals and 70 percent of the capital went to Internet companies in just three states: California, New York, and Massachusetts.

Venture funding in cleantech amounted to $790 million that went into 61 deals nationwide during the third quarter, a 13 percent decline from the $913 million invested in 55 deals during the third quarter of 2009.

Texas had 15 percent of the U.S. cleantech deals during the quarter, which was more than Massachusetts, Colorado, and Oregon combined—and got more than twice as much venture capital. Overall venture funding jumped 68 percent in Texas—an incredible gain. Roughly $357 million was invested in 33 companies in Texas during … 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.

    Members can post business loan or startup funding requests, contact private lenders, investors or peer entrepreneurs, create profiles where they can post their business needs and more.

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