VCs put $6.7 billion to work in 2Q

Venture capitalists experienced a successful second quarter, largely through investment in Internet and biotech companies. That's a divergence from the first quarter, during which both sectors suffered a drop in VC investment. Venture capitalists invested $6.7 billion the second quarter, a 12% increase from the $6.0 billion raised during the first quarter. The quarterly cash infusions were spread over 913 deals, up from 896 deals in the first three months of the year. “In many ways it feels like the late 1990s, with information technology driving venture investment and significantly outpacing other sectors when it comes to the level of activity and momentum,” said Mark Heesen, president of the National Venture Capital Association. Early-stage dollar investments rose to their highest level in six quarters, rising 63% to $2.5 billion in deals. Expansion-stage dollars increased 3% while seed-stage and later-stage deals saw a 34% drop and a 12% drop, respectively. Later-stage deals accounted for 20% of total deal volume in the second quarter, compared with 23% in the first quarter. “The increase in early-stage investing is an encouraging sign that entrepreneurs with innovative ideas can get the funding they need to succeed,” said Mark McCaffrey, global technology partner and software leader at PricewaterhouseCoopers LLP U.S. "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. “ The report was compiled by PricewaterhouseCoopers and the NVCA, based on data provided by Thomson Reuters.