Venture Capital Investing Started off 2006 with $5.6 billion in the First Quarter

Venture capitalist investments continued the steady pace in the first quarter of 2006, investing $5.6 billion in 761 deals, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association. The quarter's dollar value represents a 12% increase over the same time last year.

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.

Investments in Biotechnology declined 24% from Q4 2005 to $808 million while the Media and Entertainment sector reached a four-year high, rising 80% over the prior quarter to $396 million and 57 deals. 
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.
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.  
Internet-Specific companies captured $861 million in 145 deals, a 10% increase in dollars over Q4 2005
The Telecommunications industry category  fell in Q1 by 17% to $601 million, with a decrease in Wireless investments accounting for the majority of the decline. 
Investments in Later Stage companies remained relatively flat with 253 companies capturing $2.4 billion. 
Funding for Startup and Early Stage companies dropped 14% in Q1 to $931 million in 219 companies.  The average deal size for these companies dropped 5% to $4.3 million in Q1 from $4.5 million in the prior quarter.
Overall for Q1, Startup/Early Stage companies accounted for 29% of the deals; Expansion Stage for 38%; and Later Stage for 33%. 
Venture Capital Investment in United States Companies

Year

Companies

Deals

Investment($M)

1996 1996 2469 10762.3
1997 2487 3079 14589.0
1998 2898 3550 20718.9
1999 4343 5396 53488.0
2000 6287 7812 104379.9
2001 3753 4451 40537.8
2002 2595 3054 21696.1
2003 2399 2877 19616.3
2004 2533 2991 21768.9
2005 2589 3039 22380.3
2006Q1 759 761 5625.3

Venture Capital Investment in US Internet Related Technology Companies

01/01/2006 to 03/31/2006

No. Industry Companies Deals Investment($M)
1 Internet Software,Services and Tools 125 126 801.8
2 Ecommerce Goods, Services and Content 125 125 764.9
3 Online Communications,Infrastructure and Hardware 62 62 528.1
  Total 312 313 2094.8

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