Venture capital investment statistics for Q1

The Dow Jones VentureOne/Ernst & Young LLP Quarterly Venture Capital Report for Q1 registered a moderate rise (+7.0% vs. -9.9% last quarter) in the amount of money invested from Q4, and a very sharp rise (+18.0% vs. +14.0% last quarter) from Q1 a year ago in equity investment in U.S.-based companies who have received at least one round of venture funding from a surveyed professional venture capital firm. This was a positive report. Please note that these numbers don't include either "angel" investments or "buyouts" or so-called "stealth" investments.

Information technology (IT) continues to get the lion share of investment (56%) compared to distant second healthcare (27%). There was a very sharp rise (+17.7% vs. -16.7% last quarter) in the amount invested in information technology companies since last quarter, and a sharp rise (+12.8% vs. -10.9% last quarter) compared to a year ago.

Computer software continues to be the largest sub-sector, with 23.0% (vs. 23.1% last quarter) of the money invested in Q1 and 41.1% (vs. 42.7% last quarter) of the IT money invested in Q1, and rose +9.9% (vs. -5.6% last quarter) from Q4 but fell -8.5% (vs. -11.7% last quarter) from a year ago. The bottom line is that a healthy amount of money is being invested in new ventures, but it's not what could be called a real "boom".

Later stage deals received 52% (vs. 49% last quarter) of the money and seed and first stage deals received only 21% (vs. 22% last quarter) of the money.

The dozen largest deals were:

1. Amp'd Mobile ($150 million), provider of integrated mobile entertainment services for youth, young professionals, and early adopters
2. ITA Software ($100 million), developer of travel industry pricing and connectivity software
3. Take Care Health Systems ($77 million), provider of healthcare services in clinics located in high volume stores of national retail pharmacy chains
4. Microbia ($75 million), developer of drug candidates for the treatment of gastrointestinal disorders, dyslipidemia, pain, and fungal infections
5. Merrimack Pharmaceuticals ($65 million), discoverer and developer of drugs for the treatment of diseases in the areas of autoimmune disease and cancer
6. Optasite, Inc. ($60 million), provider of wireless infrastructure solutions
7. Pay By Touch ($60 million), provider of biometric authentication, payment, loyalty, and membership solutions
8. Cadence Pharmaceuticals ($53.8 million), developer of specialty pharmaceuticals utilized primarily in the hospital setting
9. Artes Medical ($50.7 million), developer of medical technology focused on the development of products for the plastic surgery, cosmetic surgery, and dermatology markets
10. Insulet ($50 million), developer of disposable drug delivery devices for the treatment of diabetes
11. MovieBeam ($48.5 million), provider of movies-on-demand with instant access to new releases and popular favorites from major Hollywood studios
12. Sling Media ($46.6 million), provider of a device that allows people to watch cable and satellite TV on their laptops or cell phones.

The survey data was obtained from professional venture capital firms that have invested in U.S.-based early-stage, innovative companies and do not include companies receiving funding solely from corporate, individual, and/or government investors.

Please note that there are companies receiving investments who are operating in so-called stealth mode, and don't show up in publicly-available statistics, but it is believed that such investments represent a small fraction of the total professional venture capital investments.

-- Jack Krupansky