Venture Capital Investments Strong in Q3

October 24 00:00 2011

New York, October 24 ( – Venture capital investments were surprisingly strong in the third quarter when the financial markets were staggering. The surprising elements are that it’s difficult to raise funds in such a difficult market environment and that it is not easy to “exit” an investment. However, venture capital investors are finding plenty of opportunities, particularly in early-stage startups.

As per the latest numbers released by Dow Jones VentureSource, venture capital investments increased by 29 percent, by dollar volume, with an 8 percent increase in deals in the third quarter. The total amount for the 765 deals for U.S.-based venture companies works out to $8.4 billion.

Jessica Canning, who oversees research for VentureSource, said that the good news is that the industry is on pace to near pre-recession levels by the end of next year. However, Canning is not sure as to how long this pace will last.

Consumer internet companies, including online search, entertainment and social media made major gains as they raised $1.3 billion for 104 deals, that’s more than double the dollar amount raised by 94 deals during the year-ago quarter.

In the healthcare sector, medical device companies raised more financing than bio-pharma companies for the first time in Q3 since 1998. Energy start-ups continued to be strong with the energy and utilities industry raising $6.35 million in 33 deals, which was twice the amount of money raised a year earlier.