Dow Jones Shows Slight Decline in Venture Deals, Dollars, Since Last Year

7/22/11Follow @bvbigelow

More or less correlating the results of two previous venture capital surveys, Dow Jones VentureSource says today that venture investors throughout the United States put $8 billion into 776 deals during the second quarter that ended June 30.

In terms of absolute numbers, that’s fairly close to venture data we reported Wednesday from the MoneyTree Report, which counted $7.5 billion in 966 deals nationwide over the same period. A quarterly venture survey by New York-based CB Insights found that U.S. VCs put $7.6 billion in 768 startups during the second quarter, which we reported last week.

Comparing the three surveys is trickier, because each one uses different sources and slices and dices its venture data differently. So each quarterly survey is really only consistent with its own data. In this respect, the trend of second-quarter data in the MoneyTree Report is flat to slightly up from the same quarter in 2010, while the trend in CB Insights’ second-quarter data was up sharply year-over-year.

The venture trend highlighted by the Dow Jones data is flat to slightly down. The $8 billion that VCs invested nationwide was down about 5 percent from the $8.4 billion during the second quarter of 2010. Dow Jones counted 776 deals—down 2 percent from the 788 deals VCs did in the same quarter last year.

Venture investments in seed- and first-stage rounds accounted for 19 percent of the capital and 37 percent of the deals during the quarter, according to Dow Jones VentureSource. The median amount raised for a round of venture financing during the second quarter was $5.2 million, up from the $4.6 million median a year earlier.

A couple of other highlights from Dow Jones’ second-quarter survey:

—Venture capital firms invested $2.3 billion in 184 startups that Dow Jones classifies as healthcare, which includes healthcare services, biopharmaceuticals, medical devices, and medical software and IT. That was an 18 percent decline in capital and 12 percent slide in deals from the $2.8 billion that went into 209 deals in the second quarter of 2010. Running contrary to the downturn were VC deals in medical software and IT, where $198 million invested in 19 deals represented a 27 percent rise in capital invested and a 58 percent jump in deal count from the $155.8 million and 12 deals in the year-ago quarter.

—Information Technology (IT) companies raised $2.3 billion for 255 deals, a 9 percent increase in capital and a 5 percent increase in deals over the same quarter last year, when VCs put $2.1 billion in 242 startups. While there was a surge in software activity, deals in communications and networking, electronics and hardware, and semiconductors were all down.

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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