Our Q1 2010 Venture Capital Activity Report highlighted the fact that early stage investing took a bit of a breather after three prior quarters of growth on both a dollars and deals basis. The number of early-stage deals remained largely consistent dropping only 4% vs. the prior quarter but dollars invested in early stage deals fell nearly 21%. Notably, this trend of smaller deals was visible across all stages of investment – not just early stage deals.
Green / cleantech investments grew significantly in Q1 2010 after their Q4 2009 retreat. Green investments jumped 55% and 134% on a deals and dollars basis, respectively, vs. the prior quarter. The big dollar jump is attributable to a handful of mega-investments but deal count especially in the Energy/Renewables arena grew appreciably as well.
We took a look at historical eCommerce funding and deal levels tracked by CB Insights from 1998 through 2009 to see what the hard data suggests about this trend. And the story as you can see for venture capital investments in eCommerce is a positive one.
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Last week saw yet again, another significant jump in private company financings. April 2010 is shaping up to be a strong month both in terms of number of deals and funding. Interestingly, Texas exhibited strength in this week’s private company dealfow statistics pulling ahead of Massachusetts and New York, the usual two and three ranked states, respectively. Interactive charts on the past week’s dealflow are below (may take a second to load). To see profiles on the private companies receiving funding in the last week, logon to CB Insights.
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Last week saw the most private company financings we’ve tracked in the last 9 weeks. Interactive charts on the dealflow are below (may take a second to load). To see profiles on the private companies receiving funding in the last week, logon to CB Insights.
Entrepreneurship spurs economic growth, but how do you spur entrepreneurship?
Some of the biggest companies in the world, such as Hewlett Packard and Google were born in garages and basements–romantic, perhaps, but inefficient. A better option for intrepid entrepreneurs: technology incubators.
In the last few decades 300 of these facilities have sprung up in the U.S., many attached to universities. Incubators now host about 6,000 companies and provide a panoply of services, from expensive lab equipment to accounting and secretarial support.
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Massachusetts’ share of venture dollars has steadily increased over the last four quarters. NY’s share of deals has remained largely range-bound but the state jumped to 8% of deals in the most recent quarter. Will the trend of a few quarters continue on?
Pages 7 and 8 of our 32 page Q1 2010 Venture Capital Activity Report show the share of deals and dollars across the big three venture capital states – California, Massachusetts and New York.
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Our entire 32 page, downloadable venture capital activity report is embedded at the end of this post. To access the complete list of companies receiving venture capital funding in Q1 ‘10, login to CB Insights.
It has been suggested that the secret to happiness is low expectations. And if Q1 ‘09’s multi-year low for venture capital activity sufficiently lowered everyone’s expectations then Q1 ‘10’s performance should have everyone at least a bit happier.
Q1 ‘10 saw $5.9B invested across 731 deals, and the quarter’s performance was a marked increase over the year ago quarter which saw $3.9B invested across 483 deals. As we talked about in our Q4 ’09 report, the psychology and sentiment of entrepreneurs and venture capital investors continues to improve, albeit cautiously. While $5.9B remains far below quarterly levels seen before the ’08-’09 recession, there is some belief that the VC asset class has perhaps reset at a lower but ultimately more sustainable and healthier level.
Investors write checks because they hope to get a decent return on their money. The way venture capitalists reap those returns is by taking their companies public, or perhaps selling them to other companies. That’s a tough game when demand for IPOs is anemic, as it was in 2009.
Demand hasn’t been robust in 2010, but things are thawing. As of this writing, eight companies had done IPOs thus far this year–the same amount for all of last year, according to CB Insights, a Manhattan firm that tracks private-company funding trends (including venture capital, private equity and government-backed deals).
