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Association Report: Venture Capital Deals, Totals Decline

The National Venture Capital Association reports that some big investments took place in the third quarter, but overall volume was down.

From squares to boxes, it was a good quarter on the venture capital front for companies with geometrically inspired names.

Overall, though, things were looking a bit sluggish, according to the National Venture Capital Association [PDF]. The MoneyTree Report, released jointly by NVCA and PricewaterhouseCoopers and based on Thomson Reuters data, showed an 11 percent decline in total dollars invested and a 5 percent drop in investment volume — for a total of $6.5 billion invested over 890 deals.

The two biggest beneficiaries? Both tech companies. Mobile-payment firm Square raised $200 million, while secure clould-sharing app Box raised $125 million.

Other highlights:

Software companies: The software industry led the way, with $2.1 billion in investments. The industry has topped $2 billion in four out of the past five quarters. The most recent quarter saw a 12 percent decline in total dollars, however.

Life sciences: While the total amount spent in this category jumped to $1.7 billion, the number of investments declined. The growth in this field was driven mostly by biotech.

Internet firms: Internet-specific investing dipped a bit — falling 12 percent in dollars in the third quarter and 8 percent in deals — but at $1.7 billion, it remained far above the $1 billion mark it has topped in recent years.

Other categories: The report shows that seven of the 17 sectors covered by the MoneyTree study — including financial services, healthcare, business products, and services and retailing — showed increases. Sectors such as media and entertainment, telecommunications, and IT services saw decreases. The clean technology sector in particular saw a 20 percent decline in the most recent quarter.

NVCA President Mark Heesen says these results match long-term trends.

“Opportunities continue to abound in each of these sectors,” said Heesen. “But lower venture fundraising levels will push investment dollars down as the industry recognizes it cannot put out more money than it takes in.”

Where are the growth spots in your industry? Let us know in the comments.

(TMG archive photo)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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