Good news for the New England early stage startup community – venture capital investing rebounded from last year’s lows. $789 million in VC was invested in New England in Q1 2010 vs. only $408 million in Q1 2009. This is a significant pop, and gets us closer to the 2008 and 2007 totals of $872 and $984 million. I’ve pasted in a couple of charts from data I took from the spreadsheets posted on peHUB.
Overall, peHUB says:
Venture capitalists invested $4.7 billion into 681 U.S. companies during the first quarter of 2010, according to MoneyTree data released today by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (publisher of peHUB). This represents a decrease in both deals and dollars from the preceding quarter — by 18% and 9%, respectively — but an increase over the first quarter of 2009.
April 16th, 2010 at 10:38 pm
Yes, but it continues to be difficult for brand new start-ups to raise money. Investments in companies receiving venture capital for the first time dipped 14 percent.
April 17th, 2010 at 1:51 pm
Your metric is wrong. The right metric is to look at the number of seed/startup and early stage companies getting funding vs. Q1 the previous year. That number is up 30% nationally (I don't have the New England figures.) So, more very young companies are getting funded. This is a good sign.
April 18th, 2010 at 9:31 am
[...] Q1 2010 Nеw England Venture Capital Volume | Startable – Healy Jones’ & Prasad … [...]
April 18th, 2010 at 7:51 pm
We are in the middle of our quarterly research on New England based deals, so I don't know yet what we will think the outcome of the quarter was, but it seems clear that the trend towards recovery is continuing. BTW — Desmond's comment and your reply are not mutually exclusive. Even at up 30%, it is still difficult to get financed. Also, I believe that there is too much variability quarter on quarter for a quarter to be indicative of the state of the venture economy. The low seems to have been Q2 of '09 and the trend seems generally up from there. Also I suspect, but don't know, that there is at least one non-random trend affecting the venture economy and that is that there are several large funds out raising more money. This is likely to be a distraction and to depress their rate of investment for a while.
April 19th, 2010 at 5:55 pm
Isn't it always hard to raise venture funding? I mean, there was the dot com bubble, but other than that hasn't it always been difficult?
I am totally certain that funds trying to stretch their current funds/on the fund raising path will cause financings to slow. You make a really good point. Please let me know when you get your NE venture financing report finished. I'm very curious to see what your findings are!
April 19th, 2010 at 8:41 pm
That is my point. Venture financing is hard to get on a good day. But, it needs to be more available than it is now.