The entire 61 page downloadable CB Insights Q4 2010 VC Activity Report is embedded at the bottom of this brief.  For access to the CB Insights venture capital and angel investor database, sign up for free here.

Q4 2010 venture capital activity saw the highest dealflow and funding of the last eight quarters.  Year-over-year, internet, green tech/clean tech and healthcare investments were up 21%, 7% and 2% respectively.

At $6.5B of venture capital funding over 735 deals, Q4 2010’s venture capital stats have something for everyone. For those of you looking for a data point that suggests VC is back and on the road to recovery after 2009’s tough sledding, the eight quarter high on deals and dollars gives you something to hang your hat on. For those of you who think VC is overheated and we’re headed for a bubble, the eight quarter high on deals and dollars gives you something to hang your hat on. Yes – it’s all a matter of perspective.

Overall, 2010 saw $23.7B of funding into 2792 deals which represented 14% growth in funding and 13% growth in deals over 2009’s VC nadir.

Highlights for the quarter included:

Say Bye Bye Massachusetts – NY is #2 for Tech VC

Over the last five quarters, NY has seen 208 tech deals vs. 207 for Massachusetts.  Funding to NY tech companies came in at $1.22B vs. $1.21B for Massachusetts.  The margin of victory for NY is ever so slight, but most striking is the trend for both states which are going in very different directions.  (More on this trend: NY Venture Capital Overtakes Massachusetts)

Seed VC Retains Its Share | Early Stage Grows

Q3 2010 saw 11% of deals going to Seed VC deals and that share stayed consistent in Q4 2010.  The share of Series A deals increased over Q3 2010.  Early stage deal activity was nearly 50% of total deals representing the highest level seen in five quarters.

VCs Connecting With Internet Deals Often

The growth in the quarter was driven largely by a red-hot internet sector which hit a five quarter high (by a lot) on both deals and dollars.  Early stage activity remained strong as did NY on the internet deal and dollar front.

Green Tech / Clean Tech Investments Stay Flat

After two quarters of VC funding to Green Tech/Clean Tech investments declining, the space saw deals and dollars hold vs. the prior quarter.  On a year-over-year basis, investment funding was up 40%.  Early stage investment on a deals basis into Green Tech fell to a five-quarter low.  Renewables and Energy Efficiency maintained their positions as the top 2 areas for Green Tech investment and in aggregate, they garnered their largest share of deals of the last five quarters.

Healthcare VC – A Mixed Bag

Deals in the Healthcare space were up modestly YoY but funding was down almost 16%.  The growth in funding and deals seen over the last 2 quarters ceased as well.  Mass and Cali took over 50% of Healthcare funding but Mass’ share of Healthcare VC fell to a five-quarter low.  Early stage activity in Healthcare hit a five quarter high.

California’s Number of VC Deals Grows, Funding Down

California retained its belt as uncontested venture capital heavyweight champion.  Relative to 2009, California saw 3% growth in deals and a 2% drop in VC funding.  The state saw 14% growth in deals on a sequential basis over Q3 2010.  60% of the state’s funding went to Internet and Healthcare companies.  Mobile also took its largest share of deals in the last five quarters.

Colorado – The New Green Tech Hub?

Three of the top 10 green tech deals in the quarter were in Colorado.  The state which is usually 3-4% of green tech deals jumped to 10%.

Texas Gets the Early Stage Bug

In aggregate, Texas stayed within its recent historical range, but it did see growth in early-stage deals with 6 of 10 deals in the quarter being into early stage deals.

Washington At Five Quarter Low in VC Funding

Over 50% of Washington deals were in early-stage companies and almost 60% of deals were to Internet firms.  The smaller checks to less capital-hungry web companies helped to drive Washington to a five quarter low on VC funding.


Quarterly Venture Capital Report – Q4 2010