Per my earlier post about the MoneyTree Report, if you´re not a regular reader you should be, as the quarterly report has become a bellwether for the venture community. Below you´ll find some highlights from the just released first quarter 2006 report:
Venture capital remained steady in the first quarter of 2006 according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association based on data provided by Thomson Financial. The quarter’s dollar value matches the investment level from Q4 2005 and represents a 12% increase over the same time last year.
"?¢ Software investments rose 12% in Q1 to $1.2 billion in 197 deals and remained the largest single industry category with 22% of total dollars and 26% of all deals. (Several large deals accounted for a significant portion of this increase.)
"?¢ Companies focused on delivering content via the Internet accounted for approximately half of the total dollars invested and number of deals.
"?¢ Investments in Biotechnology overall declined 24% from Q4 2005, to $808 million
"?¢ The decline in Biotech investing was slightly offset by an increase in funding for Medical Device companies.
"?¢ The Media and Entertainment sector reached a four-year high, rising 80% over the prior quarter to $396 million going into 57 deals.
"?¢ The Telecommunications industry category, which experienced a notable increase in Q4 2005, fell in Q1 by 17% to $601 million, with a decrease in wireless investments accounting for the majority of the decline.
"?¢ Major industry categories that experienced increases in Q1 were Networking & Equipment, experiencing its first gain in a year, Electronics/Instrumentation, Financial Services, and Computers & Peripherals.
"?¢ Post-money valuations of Later Stage companies soared to a four-year high, with the average reaching $92.02 million for the full-year 2005 compared to $71.22 million in the 12 months ending Q3 2005.
"?¢ Later stage and expansion dollars and deals rose for the third consecutive quarter
First Time Finances:
"?¢ Fewer companies received funding for the first-time in Q1 2006 than the previous quarter. A total $1.3 billion went into 219 companies, an 18% decline in the number of companies from the prior quarter.
"?¢ Startup/Early Stage deals continued to represent the bulk of first-time deals and dollars with 63% and 49% of the total, respectively, which is in line with historical norms.
"?¢ In general, the pattern in first-time financings followed the same trends seen in overall investing. Software companies continued to attract the most first time deals at 53 followed by medical device companies at 23. The Industrial/Energy sector also recorded an increase, rising 21% in volume to 17 deals and 30% in dollars to $55 million.