Venture Capital: Don't Call It a Comeback

NYU-Poly Editor's Note: Chubby Brain is a startup company in NYU-Poly's Varick Street incubator

Venture funds may be having trouble raising new funding, but they are still investing what money they have. The third quarter of 2009 saw venture capital activity hit $6.1B, a healthy 14% increase in venture capital activity over Q2 2009 when venture capital investment stood at $5.3B. The investments were spread across 678 deals (up from 613 in the prior quarter), according to ChubbyBrain, an information services company tracking venture capital, angel investor, private equity and incubator activity. Both the funding and deal levels represent a marked increase over the abysmal levels of venture investing seen in Q1 2009 when the proverbial bottom fell out.

The venture capital funding total doesn't compare favorably to Q3 2008, of course, when ChubbyBrain data shows venture investing stood at $7.2B. Whether venture investing will reach historic levels again anytime soon is an open question. While the pundits have a variety of opinions and prognostications, it is too early to tell where venture capital investment levels will end up purely based on the data. However, based on the significant uptick in the last two quarters, there is room for cautious optimism especially given Q3 2009's venture capital totals.

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