While venture capital investments are still strong, the rate that VC's are putting funds into ventures appears to be slow. A MoneyTree Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA) based on data provided by Thomson Reuters shows these trends today.
Investment levels and deal volume dropped, but the report says that venture capital remains strong with deep pockets this quarter with what is still the fifth highest level of investment since 2001. Venture capital investments totaled $7.1 billion in the first quarter of 2008, down 8.5% from last quarter 2007 of $7.8 billion. Deal volume also decreased slightly, down to 922 deals from 1,045 deals.
What industries are taking the bulk of the cash? Life Science (which includes biotech and medical devices) took a third of total cash at $2.3 billion and 24% of deals at 220. The Clean Tech center took $625 million in 44 deals, a 6% dip in investment levels from last quarter. Internet-specific companies tagged $1.3 billion in 195 deals, down 7% from last quarter. Semiconductors saw investment levels going up to $566 million from $458 million. The quarter also saw a trend of decreasing investment levels in companies receiving their first-time financing. Companies receiving first-time financing received $1.6 billion in 294 deals, down from $2.2 billion on 360 deals. Media/Entertainment is the only industry seeing a jump in first-time financing.
This also shows the stages on top of the industries. Seed/early stage companies dipped to $1.7 billion with an average deal size for seed being $3.6 million and $5.7 million for early stage companies. Expansion stage financing stood unmoved at $2.9 billion with an average deal size of $9.0 million. Investments in late stage deals also dropped, hitting $2.6 billion with an average deal size of $9.6 million.
Jon Ogg is a producer and editor of the Special Situations newsletter for 247WallSt.com.
Venture Capital Deal Funding Is Down, But Still Strong
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