Venture Capital on the Rise

Venture capital investment activity picked up in 2010, and for the first time since 2007 the annual investment level increased, according to the recent Money Tree report by PricewaterhouseCoopers LLP and the National Venture Capital Association. Venture capitalists invested $21.8 billion in 3,277 deals in 2010, an increase of 19 percent in dollars and a 12 percent rise in deals over the prior year, according to the report, which is based on data from Thomson Reuters. Investments in the fourth quarter of 2010 totaled $5 billion in 765 deals, a 2 percent increase in dollars but a 3 percent decrease in deals from the third quarter of 2010 when $4.9 billion went into 789 deals. The report indicated that investment was spread across a diverse range of sectors including Clean Technology and Internet-Specific sectors. Investment dollars also increased across every stage of development category, with the exception of a two percent decrease in Seed stage investments. First-time financings rose in 2010 compared to the prior year, however, fourth quarter investing did show a decline in both first-time dollars and deals when compared to Q3 2010.