One statistic we highlighted in the report (request full free report here) was that since 2008, there have been 81 acquisition transactions in the following areas of eCommerce:  Flash Sales, Daily Deals, Alternative Currencies, Sharing Economy/Collaborative Commerce, CrowdFunding and Subscription eCommerce.  As can be seen, M&A activity in these areas of eCommerce is significantly accelerating as well.

To see the companies and transactions in any of these areas of eCommerce, logon to CB Insights and search for companies with these tags from our Company Search with status acquired.  If you don’t have a CB Insights account, you can sign up for a free account here.

One statistic we highlighted in the report (request full free report here) was that since 2008, there has been $4.1 billion invested in 203 financing transactions in the following areas of eCommerce:  Flash Sales, Daily Deals, Alternative Currencies, Sharing Economy/Collaborative Commerce, CrowdFunding and Subscription eCommerce .

To see the companies and transactions in any of these areas of eCommerce, logon to CB Insights and search for companies with these tags from our Company Search.  If you don’t have a CB Insights account, you can sign up for a free account here.

Dow Jones VentureSource is just not that good.

That was simple.  By not that good, we mean Dow Jones VentureSource data is not that accurate, complete or timely.

Let us explain why.

It comes down to Dow Jones VentureSource having an outdated data aggregation model.  It wasn’t always outdated.  In fact, it was the right model in 1992…

When your model is based on what is effectively begging (their euphemism for this is surveying) VCs for data as the tweet above demonstrates, there is a problem.  If surveys are not returned, the data is not complete and that is what drives some of the discrepancy in numbers.  And those surveys which are returned come in at different times often way after deals have bee done which means the data is not fresh.  This is also what drives Dow Jones VentureSource’s report to come out a couple of weeks after us.

And let’s be clear, when Dow Jones VentureSource writes that “your participation is crucial”, they mean your (the VCs) participation is crucial to their, meaning Dow Jones’, business model.  Ultimately, their model is based on getting data from VCs and then going back and overcharging those same VCs for the data they just provided.

This is not based on speculation.  VCs who are current customers of Dow Jones VentureSource tell us this pretty matter-of-factly.  It’s primarily analysts and associates who are in the trenches in these databases on a day-to-day basis.  At the end of 2011, we worked with many many VC firms who needed data on companies or general market trends to identify potential dealflow for 2012 or for LP or strategic planning presentations.  Interestingly, almost half of them said they were VentureSource subscribers.  So when we asked why don’t you just use VentureSource, their primary reason was VentureSource data is not complete or not timely.  The second reason was dissatisfaction with their product’s UI/UX or search capabilities.

You are probably not surprised to hear that we most definitely have a horse in this race.  We understand the “nobody ever got fired for buying Dow Jones” mantra, but when you get sick of bad data, poor UX/UI, shoddy customer service and overpriced data, email us or just sign up for a free trial and give us a spin.

Let the talk of a bubble begin in 3, 2, 1…

Here are some of 2011′s highlights.

The Fat Venture Capital Funnel

With 2011’s results, the bubble talk will shift into overdrive. The reality is that VC funding is a funnel. More companies get Series A than B than C – etc, etc. Within tech, our data shows the VC funnel has gotten fat at the top (a lot of Series A and Seed deals). And VC Darwinism means that not all of these companies can or should receive Series B, C, etc. While some would rightfully say this is the way markets work, for a company raising money, this dynamic will represent a “chokepoint”.  Some will receive funding, some will die quickly, some will get acq-hired or be asset sales get dressed up as acquisitions, some will be orphaned and figure out a way to make money and become steady real businesses and some will die a slower, more tortured death.

New York – Back to Reality or a Speed Bump?

One quarter does not a trend make. So after taking the #2 spot for aggregate VC deals and dollars in Q3’11, NY slipped back to #3 behind Massachusetts. The state retains its hold on #2 for tech deals and dollars and showed some life in the healthcare realm as well. We’ll see if NY can fight back like it’s resilient football Giants or whether the state will just talk incessantly and not perform like the Jets in future quarters.

Healthcare VC – Rumors of Death Greatly Exaggerated

Healthcare hit a five quarter high on funding and showed solid deal activity. Sector reverses downward trend and shows pulse to close out 2011.

Massachusetts’ Balanced Attack Brings It Back to #2

Massachusetts took back its #2 spot for both deals and dollars with deals across multiple sectors. Healthcare was particularly strong. Internet investment in the state was the one weak spot in an otherwise strong showing.

Internet Takes 1/3 of VC Dollars in 2011

Cali and NY account for 59% of internet VC deals and 66% of funding. Internet investments took over 1/3 of venture dollars in 2011. Massachusetts fell to a five quarter low on internet deal share. Mega-deals in the data storage (Dropbox and Box.net) buoy funding.

California Venture Capital Steady as Ever.

Cali still the top spot for VC deals and dollars. ‘Nuff said.

Washington Stalls. Again.

We’ll bring back our “Sleeping in Seattle” metaphor as Washington continued its multi-quarter dealflow slide and also came down on funding.

Venture Capital Report – Q4 2011 –

While we have plenty of exciting product and other updates coming out about Mosaic in the near future, we wanted to use this post to congratulate the 100 amazing companies who were honored by Forbes.  These are companies who are leading in some giant markets and which are poised for big things for many years to come.

You can learn more about these impressive companies and their growth by visiting Forbes America’s Most Promising Companies section here.  An article about the top 20 in particular is here which is def worth a read as well.  Congratulations again to all of the deserving top private companies who made the list.

For our subscribers, all the company profiles are on CB Insights, and you can just click here for a complete list (hit the link after you login).  This will not just give you the list but their profiles will include their prior investment history, if any.  This, of course, is very handy for VCs and PE investors.

Below is the list of Forbes top 100 private companies.

1. Smashburger
2. BOKU
3. Digital Broadcasting Group
4. Popchips
5. Implantable Provider Group
6. Virtual Instruments
7. Allonhill
8. SecondMarket
9. ServiceNow
10. Opower
11. uSamp
12. 3Cinteractive
13. Scale Computing
14. Contour
15. Fresh Diet
16. Four Winds Interactive
17. HubSpot
18. Box
19. IntegriChain
20. Lending Club
21. Shoedazzle
22. Rocket Fuel
23. Latisys
24. Eneractive Solutions
25. Skinit
26. Yodle
27. Southern Tide
28. Marketo
29. R2 Logistics
30. Webimax
31. CampusBookRentals.com
32. Evernote
33. Limos.com
34. Mutual Mobile
35. ShopRunner
36. Totsy
37. HUMAN Healthy Vending
38. Splunk
39. Vitrue
40. ThunderCat Technology
41. Acquia
42. Propel Fuels
43. Salient Federal Solutions
44. Pricelock
45. Star2Star Communications
46. Deer Valley Trucking
47. Cie Games
48. A10 Clinical Solutions
49. WellDoc
50. Mesocoat
51. Valkyrie
52. JAMA Software
53. ChaCha
54. Elemental Technologies
55. Vantage Data Centers
56. InfoStretch
57. North American Power
58. Bridgelux
59. Telogis
60. Packsize
61. Resonate Networks
62. Ocean Media Systems
63. Niner Bikes
64. ShopJimmy
65. Navman Wireless
66. Scentsy
67. ABSMaterials
68. E-cycle
69. Market Force
70. Energy Xtreme
71. Buyology
72. OpenSky
73. Domo Technologies
74. Tenex Health
75. J. Hilburn
76. Aquatherm
77. Syncardia
78. RGB Networks
79. CIRCA
80. Tagged
81. InsureMonkey
82. PaperG
83. Gemvara
84. ShareThis
85. ScrollMotion
86. Worldwide Power Products
87. Tigerspike
88. Axis Teknologies
89. Frogbox
90. Shareable Ink
91. Unequal
92. Badgeville
93. Performance Enhancing Meat Snacks
94. Inspirato
95. CODA Holdings
96. Cerulean Pharma
97. Sapphire Energy
98. ALTe
99. ScoreBig
100. Cinsay

• Flash sales (Gilt Groupe, One Kings Lane, etc)
• Daily deals (LivingSocial, Peixe Urbano, etc
• Subscription eCommerce (H. Bloom, ShoeDazzle, etc)
• Alternative currencies (TrialPay, BOKU, etc)
• CrowdFunding (Kickstarter, IDEAME, etc)
• Sharing Economy / Collaborative Commerce (Airbnb, RelayRides, etc)

The conference entitled “The Evolving World of eCommerce” features executives from Amazon, Microsoft, Groupon and American Express, the founders of Diapers.com, Paperless Post, and Venmo and venture capitalists from First Round Capital, Edison Ventures, and Genacast Ventures.

If you’d like to attend, you can get 25% off a Professional Ticket by using the following CB Insights discount code – 2EF7GGH9.  Just go here to register.

Anand Sanwal of our team will be moderating a panel on subscription commerce at 3:15pm so if you’re in attendance, drop by and say hello.

This post is quite off the mark as there are some massive leaps of faith/logic which I’ll try to address.

Quote from original article: The solution to this structural problem in the startup economy is simple: we need more venture funds. Unfortunately, thousands of funds around the world have been killed off since 2007.

This is really not accurate or realistic. Many venture funds have died for a reason – their returns were terrible. In short, they deserved to die because they didn’t perform. The Limited Partners in those funds decided not to invest more, and as a result, those funds are no more.  This is a good thing as its the way markets and resource allocation are supposed to work (for the most part).  If anyone can name a fund with an above benchmark IRR that was “killed”, we will stand corrected.

The one negative of these crappy returning funds is is that some of those LPs may have soured on the VC asset class overall and so might be gunshy to invest in another VC fund. That’s perhaps happened but nevertheless, the idea that funds were “killed off” is inaccurate. They were given some rope and hung themselves with poor returns.

Quote from original article: First, you have a large number of high-quality companies that need capital, while the competition to provide capital is decreasing. Second, you have a pool of frustrated limited partners looking for new managers.

Capital will find its way to great opportunities. And that capital may not always come from VCs. We track hedge funds investing in private companies through sidepocket funds, family offices investing their money in these companies, angel individuals and groups making investments as well as corporation making investments, etc.  If there is a good opportunity, someone will invest especially now when it seems everyone wants to invest in the next FB, Twitter, Groupon, Zynga, etc.

The problem is that “high quality” as a descriptor means nothing. Great companies whose metrics are killer, whose growth is up and to the right and who are in the right space (mobile photo sharing app anyone?) will get their Series A. It’s the folks who are a bit up and a bit down that have trouble. Are these high quality companies? Who knows? They might be good companies one day but maybe the odds of them generating venture level returns is now not realistic. And so they’re orphaned and they’ll die if they need to raise more money.  Or perhaps they’ve become sustainable businesses on the seed investment and don’t need a Series A.  The death part may sound terrible but there is a VC conversion funnel and has been forever. Not everyone gets follow-on funding. It’s simply the rules – Darwinism at its best.

Quote from the article:  Just 1 in 100 angel deals may get funded by venture capitalists today, yet there are probably at least 10 strong startups in a 100, if not more.

There is no support for this beyond a gut feel.

Finally, here is the reality on Seed VC deals. If done by a large VC, they are “call options”. If the company ‘kills it’ (translation: performs outstandingly) with that money, the VC has the first look at them and can invest in the Series A. If they don’t grow like heck, it’s just a seed investment so not lots of capital at risk.

Data — that’s what we bring to the conversation.

So attached below is the Human Capital Venture Capital report which is the only real study of VC-backed founders and their race, gender, education, age and founding team composition ever done.  There are some interesting insights that can be gathered from it, and the best part is that it’s data-based and not based on a couple of folks anecdotal viewpoints.

For those who missed the entire kerfuffle, it may still be playing out on Twitter.  But if not or your too busy to check, here is a post by Michael Arrington discussing his interview for a CNN program, Black In America: The New Promised Land: Silicon Valley where he talks about race in Silicon Valley.  His post was followed up by a response from Soledad O’Brien of CNN here.  (She quotes the CB Insights statistic from the Venture Capital Human Capital report in her response)

Gender and Education Demographics: Venture Capital Human Capital –

The data comparing Massachusetts to New York on its venture capital totals in Q3 2011 is provided below.

While we know of some noteworthy efforts to diversify NY’s early stage ecosystem presumably because its reliance on a single sector is viewed as a negative, we wonder if there are folks out there who think NY “going all in” on tech is actually a good thing?  If you believe Marc Andreessen’s hypothesis that “software is eating the world”, has NY through luck, wisdom and/or by factors out of its control, chosen/been chosen to ride the biggest and fastest wave in VC land for the foreseeable future which means good things?  And if that is the case, does diversifying still make sense?

We hope you will leave your comments and perspectives on NY’s need (or not) to diversify it’s venture capital investment sectors in the comments.

Specifically, they did do a nice job restating our earlier findings including:

• Early stage activity is up (more details on that here)
• NY overtook Massachusetts on both VC deals & dollars
• VC levels are back to pre-recession levels
• Medical device companies were a hot area in healthcare

Year-to-date in 2011, we’ve tracked $23 billion of financing compared to VentureSource at $22.8 billion.  We’ve tracked 2,296 VC deals and VentureSource has 2,202 deals.

Below is the CB Insights vs. VentureSource data for each of the first three quarters of 2011 by quarter.  For a prior comparison of CB Insights VC data vs. VentureSource, you can also check out this venture capital database comparison.