Rebound in Early Stage Investments
Additional Decline in Telecom and Energy Deals
PricewaterhouseCoopers / National Venture Capital Association MoneyTree TM Report, Data: Thomson Reuters ; 2013 annualized from 06/30/13; Industry, Stage, and Regional data for quarter end; Consumer Industry includes Business Products & Services, Computers & Peripherals, Consumer Products & Services, Electronics / Instrumentation, Financial Services, IT Services, Media & Entertainment, and Retail / Distribution; Industry Sector includes Biotechnology, Healthcare Services, and Medical Devices & Equipment; Other Industry includes Industrial / Energy, Networking & Equipment, Semiconductors, and Telecommunications; Top four Regions by Dollars broken out
There were 913 venture capital deals in the US in Q2 2013 totaling $6.7B. This represents an increase over Q1 2013, but continues a slight decline of 3% in dollars raised on a rolling four quarter basis. 302 of the deals in Q2 2013 were first time financings, which totaled $1.1B. First time financings as a percentage of all venture deals increased slightly from Q1 2013 to represent 33% of deals and 17% of dollars raised.
Business Products and Services investments saw the greatest increase in dollars raised in Q2 2013, increasing 21% on a rolling four quarter basis. Meanwhile, Telecommunications and Industrial / Energy continued to fall dramatically by 27% and 25%, respectively. Semiconductor investments also followed suit by decreasing 27% in dollars raised on a rolling four quarter basis.
Early Stage investments rebounded slightly, increasing 3% in capital raised on a rolling four quarter basis. However, Seed investments fell 14% in Q2 2013. Seed deals averaged $3.6MM, while average Early Stage deals increased to $5.2MM,, Expansion Stage deals averaged $9.8MM, and Later Stage deals averaged $10.8MM.
Regionally, Northwest investments are currently up 7% by dollar on a rolling four quarter basis, while DC area investments fell 15% in Q2 2013.
IT investing will continue to be the bedrock of the venture industry – but at sustainable levels. Life sciences investment is poised for a slow and steady recovery, provided we can continue to see progress on the regulatory front. And as clean energy continues to evolve from a capital intensive to a capital efficient model, it is clear that the venture industry is responding to the market forces at work," added Mark Heesen, President of the NVCA.
The increase in early stage investing is an encouraging sign that entrepreneurs with innovative ideas can get the funding they need to succeed,” noted Mark McCaffrey, global technology partner and software leader at PwC US. “As the exit window continues to open, we’ll continue to see VCs shifting their focus back to companies in the earlier stages of development…”
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