Venture activity up 61 percent in second quarter

Money appears to be flowing a bit more freely compared with the first quarter. Is this the end of the VC apocalypse?

If the first quarter was the apocalypse, then the second quarter offers a glimmer of hope for VC community. New data from Chubby Brain shows that with the "numbers tallied, Q2 2009 saw 61% more money flowing from venture capital investors to entrepreneurs over the prior quarter." Good news for all.

I'm part of the camp that believes a downturn is a great time to start a company and I suspect we'll see many more fundings in the second half of the year--especially as too many VCs chase too few deals.

Second quarter highlights:

  • Deal values totaled $5.329 billion. This represents a nearly 61 percent increase over the $3.314 billion of investment tracked in the first quarter.
  • Early stage investment in Seed and Series A rounds accounted for 35 percent of the number of deals.
  • The health care sector saw the greatest level of funding, garnering 37 percent of investment dollars.
  • Nine of the 10 most active venture firms in the quarter are based in Silicon Valley.

Q2 2009 investments
Q2 2009 investments Chubby Brain

The heavy lean toward health care is the only surprise in the financings, but it makes sense in context of how long it takes for those types of products to be developed.

View the full report on Chubby Brain's website.

Follow me on Twitter @daveofdoom.

About the author

Dave Rosenberg has more than 15 years of technology and marketing experience that spans from Bell Labs to startup IPOs to open-source and cloud software companies. He is CEO and founder of Nodeable, co-founder of MuleSoft, and managing director for Hardy Way. He is an adviser to DataStax, IT Database, and Puppet Labs.

 

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