(Source: San Jose Mercury News)
By Peter Delevett, San Jose Mercury News, Calif.
Aug. 15--After a relatively subdued start to the year, venture capital investments
roared back during the second quarter of 2011.
Venture capitalists poured $7.5 billion into 966 deals, according to
MoneyTree report prepared by Pricewaterhouse-Coopers and the National Venture
Capital Association using data from Thomson Reuters.
Both numbers were significant premiums over the first quarter, when $5.9
billion went into 736 deals -- the lowest total in six quarters.
If the rest of the year keeps pace with the new numbers, "2011 is on
track to exceed $26 billion," said Tracy Lefteroff, who heads the global
venture capital practice for PricewaterhouseCoopers.
That would be one of the most active years in the history of venture
capital, he added.
Still, the recent stock market fluctuations, and their potential impact
on the pension funds and money managers who bankroll venture capital, mean
nothing is guaranteed.
Consider cleantech, which represented half of the venture industry's 10
largest deals in each of the two previous quarters. The most recent numbers
were down considerably: Dollars invested last quarter in the sector plunged 23
percent, to $942 million, compared with the previous three months.
Those prior-quarter numbers were inflated by several $100 million-plus
investments in cleantech. In the most recent quarter, just one cleantech
company -- electric carmaker Fisker Automotive -- made the list of the
quarter's top 10 deals.
National Venture Capital Association officials noted that the number of
clean-technology deals in the quarter was up 11 percent compared with the
first quarter. With 81 companies landing venture funding, it was the most
active quarter for cleantech in MoneyTree history.
But Bill Green, a veteran investor in the sector, cautioned that the
number of VC firms making bets on cleantech has shrunk dramatically, in part
because the public markets haven't been more receptive.
"Everybody thought that cleantech would be a rapid ride to IPO
realizations," said Green, a former managing director at VantagePoint Venture
Partners who now heads renewable energy project finance for Macquarie Capital
Funds.
"People are absolutely more cognizant of the challenges of cleantech
investing," Green added.