Deal activity hits highest level since dot com days.Seed VC activity remains strong despite Series A crunch worries. Internet booms, healthcare comes back down and clean tech keeps falling.

In Q3 2012, we’d commented that the 835 deals that took place were the highest number since the dot com boom. Q4 held relatively flat (834 deals) and Q1’13 saw a slight uptick leading to a new multi-year high on deals. Funding also climbed on a sequential basis. Relative to Q1’12, funding was up 17%.  Overall, Q1 2013 saw $6.9 billion invested across 841 deals.

To download the entire 70 page Q1 2013 Venture Capital Activity Report, login here. (note: only available to subscribers)

Seed VC which hit a peak in activity in Q3’12 still registered a strong quarter. If the much-discussed Series A crunch was on investor’s minds, we’d have expected the beginnings of a pullback on Seed VC activity in Q1’12, but nothing doing here.

quarterly venture capital report q1 2013

To Live In a World Where Everyone is Above Average
Seed VC activity was pretty flat on a sequential basis (194 seed VC deals in Q1’13 vs 190 in Q4’12) but YoY, Seed VC deals are up 31% (148 in Q1’12).

While the consensus is that there will be Seed VC casualties because there is not enough Series A money, the prevailing wisdom among investors also appears to be that this crunch will only impact those other “less smart” investors who made poor bets.

NY Beats Mass on Funding and Deals Overall
For the 2nd time in the last 2 years, NY beat out Massachusetts on overall number of deals and funding in a quarter to take 2nd place behind California. Note: this is for total deals and funding – not just tech

Last time this happened, Massachusetts dutifully grabbed back 2nd place in the following quarter. Is that what happens again this time or does Q1’13 mark the passing of the mantle to NY as venture’s 2nd biggest destination? Stay tuned…

new york venture capital q1 2013

massachusetts venture capital q1 2013

Social is so 2007
Internet deal activity climbed to multi-year highs hitting 379 deals (best since Q1’10). Massachusetts share of internet VC dropped significantly in Q1. Social as a category made up only 4% of deals.

44 States and Washington DC All See Some VC
Cali, Mass, NY, Georgia and Texas take top spots for funding. Versus Q4 which saw only 38 states see companies funded, Q1’13 shows a bit more geographic diversity among the VC set.

Clean Tech – Run for Your Life!
Clean tech deals and funding hit multi-year lows as investors cannot seem to flee the space quick enough. There was less than $500 million of total funding to Clean Tech in Q1’13. In the past, a single Clean Tech deal might be greater than that.

Cleanweb (intersection of clean and software/hardware) still is one bright spot along with solar financing oriented businesses.

From a contrarian perspective, is now the perfect time to invest in clean tech (buy low)? Suggesting that to an LP given sentiment to the space might be tough, but the old Warren Buffet “be fearful when others are greedy and greedy when others are fearful” adage might ring true clean tech right now.

clean tech venture capital q1 2013

Washington DC > Washington State – What?
Washington fell to #10 for funding among states. In fact, the state of Washington had less funding than Washington DC which was helped by LivingSocial’s massive down round.

Healthcare Reverts to the Mean
After Q4’12’s uptick in funding and deals, we wondered if healthcare might be making a comeback. Not so much. Deals and funding dropped back to more typical levels and were down both sequentially and year over year.

healthcare venture capital q1 2013

Georgia, Oh Georgia
Buoyed by Airwatch’s gargantuan $200 million funding, Georgia jumped to #4 among states for VC funding. Utah came in at #6 also jumping in the rankings on the back of several mid-stage deals.