Thursday, April 11, 2013

VC Deal Activity hits highest level since dot com days in Q1 2013; Seed Activity remains strong; Series A crunch invisible

By investing $6.9 Billion across 841 deals, the Venture Capital industry has taken itself back to the heady days of the dot com boom, according to the Q1 2013 Venture Capital Activity Report, published today by CB Insights. Funding also climbed on a sequential basis. Relative to Q1’12, funding was up 17%. 

Seed VC activity continues unabated,” says Anand Sanwal, CEO. “The Series A Crunch doesn’t seem to be phasing investors. They all think it will happen but will impact other investors’ startups.” 

Fellow Angels, note that this report only covers VC deals. Angel investments are not included in these numbers unless an investment round included Angels investing alongside a venture capital firm or corporate venture group.

Internet Deals.
Internet deals hit a multi-year high. Deals in the internet sector climb this time (while mobile actually dips down a bit).  Interestingly, social as a category hits low on deal share. It’s all about the enterprise now.

Series A Crunch
Like Lamont Cranston, “The Shadow” of old time radio fame, the “Crunch” appears to have the power to cloud men’s minds so they cannot see it. While the consensus is that there will be Seed VC casualties because there is not enough Series A money, the prevailing wisdom among investors also appears to be that this crunch will only impact those other “greater fool” investors who made poor bets.

NY Beats Mass on Funding and Deals Overall
“Is this the turning point for NY to become the perennial #2 for VC,” asks CBInsights? For the second time in the last 2 years, NY beat out Massachusetts on overall number of deals and funding in a quarter to take 2nd place behind California. Note: this is for total deals and funding – not just tech.

Last time this happened, Massachusetts dutifully grabbed back second place in the following quarter. Is that what happens again this time or does Q1’13 mark the passing of the mantle to NY as venture’s 2nd biggest destination? Stay tuned… 

44 States and Washington DC All See Some VC
California, Mass, NY, Georgia and Texas take the top five spots for funding this quarter. Versus Q4, which saw only 38 states with companies funded, Q1’13 shows a bit more geographic diversity among the VC set. A full table is included below. 

Colorado comes in in number 15, New Hampshire number 20. Washington State drops big. This State, which is usually top 5, falls to #10 for funding; gets beat by the other Washington (DC). Georgia and Utah both make strong showings. Large mid- and late-stage deals push funding up for these two unusual suspects.

Clean Tech – Flee With your Purse!
Clean tech deals and funding hit multi-year lows as investors cannot seem to flee the space quick enough. There was less than $500 million of total funding to Clean Tech in Q1’13. In the past, a single Clean Tech deal might be greater than that. Cleanweb (intersection of clean and software/hardware) still is one bright spot along with solar financing oriented businesses. From a contrarian perspective, is now the perfect time to invest in clean tech (buy low)? Suggesting that to an LP given sentiment to the space might be tough, but the old Warren Buffet “be fearful when others are greedy and greedy when others are fearful” adage might ring true clean tech right now.

Massachusetts – Things looked promising until they didn’t. After a three-quarter upswing in deals, Mass deals come back to the good old 75 deals/quarter level and also hit a five-quarter funding low of $602M.

Rank State Investment ($M) # of Deals
1 California 3,370.42 346
2 New York 715.36 100
3 Massachusetts 601.78 75
4 Georgia 321.68 12
5 Texas 226.49 34
6 Utah 182.54 11
7 Delaware 150.24 2
8 Oregon 146.43 12
9 DC 133.09 9
10 Washington 100.32 32
11 Arizona 93.26 7
12 New Jersey 85.23 10
13 Maryland 84.92 12
14 Pennsylvania 82.49 24
15 Colorado 80.57 26
16 Tennessee 68.96 10
17 North Carolina 57.56 5
18 Ohio 46.02 15
19 Minnesota 41.59 9
20 New Hampshire 40.37 6
21 Connecticut 33.90 6
22 Illinois 29.77 11
23 South Carolina 28.64 5
24 Missouri 26.26 5
25 Florida 24.46 6
26 Rhode Island 23.02 2
27 Virginia 22.31 8
28 Michigan 20.91 11
29 North Dakota 20.58 1
30 Indiana 17.05 4
31 Wisconsin 17.04 5
32 Kansas 15.75 2
33 Arkansas 10.50 1
34 Iowa 6.00 1
35 New Mexico 4.30 1
36 Idaho 3.45 3
37 Montana 2.93 1
38 Oklahoma 2.85 1
39 Louisiana 2.00 1
40 Nevada 1.25 4
41 Maine 1.05 1
42 Nebraska 1.00 2
43 Kentucky 0.75 1
44 Vermont - 1

Subscribe to the Angel Investing News

No comments: