Venture capitalists invest $4.8 billion nationwide in 3Q

Venture capitalists across the U.S. invested a combined $4.8 billion in 637 deals during the third quarter of 2009, as dollar volume rose 17 percent over the second quarter. A year ago, $7.2 billion was invested in 994 companies.
Fueling activity during the three months ended Sept. 30 were surges in the clean technology and biotech sectors, according to the quarterly MoneyTree Report from PricewaterhouseCoopers LLP and the National Venture Capital Association, based on Thomson Reuters data.
Biotech received the highest level of funding as $905 million went into 104 transactions. Clean tech counted $898 million invested in 57 deals.
“The third quarter illustrates a gradual and deliberate industry shift towards a longer term venture capital investment strategy,” NVCA President Mark Heesen said in a statement. “Venture capitalists are becoming increasingly focused on industry sectors which require multiple funding rounds of financing for an extended time horizon.”
He said companies in area such as clean tech and life sciences require significant capital, often over a 10-12 year period, meaning a longer time toward a successful exit where the venture capitalist can deploy capital earned into new investments.
“This is not to suggest that the venture capital industry will abandon short-term IT investment,” Heesen said. “Rather, the mix of investments will become much more balanced.”
Tracy Lefteroff, global managing partner of PwC’s venture capital practice said investments for the full year are expected to exceed the $15 billion mark.