CB Insights’ Q1 2010 Venture Capital Activity report highlights the quarter’s VC funding trends by state, series,  and sector.

ChubbyBrain provided the data that forms the basis of this article which was written by Garett Sloane and which was today’s cover story in AM New York. For those in NYC, pick up a copy of the paper and check out the 2 page spread.  For those not in NYC, the article text is below and a docstoc document of the article as it appeared in AM-New York is at the bottom of this post.

Gotham, startup your engines.

The city’s tech scene appears poised to come out of the shadows after years of fighting for the limelight enjoyed by New York’s core industries such as finance, media, advertising and fashion.

“I will go out on a limb and say that NYC right now is the most innovative place on the planet. If I had to bet I would bet the next black swan [startup] will come from there,” said Rafe Furst, a Silicon Valley-bred entrepreneur.

The companies featured here are amNewYork’s picks for the top 10 tech startups, compiled with the help of ChubbyBrain, an information services firm.

Gilt Groupe

Founded: 2007

Venture raised in ’09: $43 million

This fashion retail Web site sells designer goods at sample-sale prices.

“It’s a fundamentally different way of selling merchandise that has a lot advantages for brands and consumers,” said co-founder Kevin Ryan.

Gilt’s members have to be invited, adding to an air of exclusivity to the site, where deals are deep, such as a pair of Testoni shoes at $500 instead of $2,000. Also innovative: The site schedules its sales — everyday at noon new ones begin for 36 hours.

Our entire 29 page, downloadable Q4 VC activity report is embedded at the end of this post.

Given persistent levels of misinformation and confusion about venture capital data, we encourage you to review our methodology and definitions to better understand the numbers presented in our Q4 2009 venture capital activity data and commentary.

Oh what a difference a year makes. 

In Q4 2008, we tracked $5.9B of venture funding, but against the backdrop of economic & equity market tumult, many pundits were predicting this number was indicative of the demise of the venture capital asset class.  Q4 2009 sees funding levels of $5.5B and despite a decline versus the year ago quarter, the psychology and sentiment underlying the number couldn’t be more different.  Yes, optimism, albeit of the cautious variety, seems to have found its way back. Q4 2009 saw VC activity hit $5.5B spread across 687 deals according to ChubbyBrain’s venture capital database.  ChubbyBrain is an information services company tracking high growth private companies and investors.  687 deals is the most activity in a single quarter in the last five quarters.

$50 million in revenue in 5-6 years is the conventional wisdom entrepreneurs hear about what venture capitalists are looking for.  Unfortunately, when you dive into the hard data, as we’ve often shown in the past, it can reveal some interesting and counter-intuitive realities. 

This analysis which looked at the top 100 software company IPOs shows that even some of the most, if not the most successful software companies (read: Microsoft & Oracle) took longer than 5-6 years to hit the $50 million mark. 

This analysis by the ChubbyBrain team originally appeared on Fast Company here as part of their recently launched Getting Funded content area.  Fast Company & ChubbyBrain also issued a 44 page Q3 Venture Capital activity report which you can view and download for free here.

Amidst the ads, books and late night TV commercials promising inside information about little known government programs and free money, there actually is money out there for your business.  In fact, in Q3 2009, ChubbyBrain which tracks venture capital, angel investment and several other types of investment in private companies tracked $2.3B going to 65 young companies from various governmental or government-affiliated entities.  These government programs and government sponsored public private partnerships offer funding via loans, grants and equity investments into promising young companies and technologies.

In Q3 2009, the average deal was $36.2M but this aggregate number is misleading because of several large fundings by the Department of Energy which distort the number.  The more interesting highlight for early stage entrepreneurs is seen in the chart below.  As can be seen, the great majority of investments are under $5M with the median across the 65 deals standing at $1.1M. 

This analysis by the ChubbyBrain team originally appeared on Fast Company here as part of their recently launched Getting Funded content area.  Fast Company & ChubbyBrain also issued a 44 page Q3 Venture Capital activity report which you can view and download for free here.

Venture capitalists typically invest locally.  That shouldn’t come as a shock to entrepreneurs who’ve spent some time trying to understand the VC universe.  The logic essentially goes that having startups they invest in nearby makes it easier for both parties to interact, get guidance, brainstorm, etc.

So if an entrepreneur believes that getting venture capital is incumbent to his startup’s success and location is important to venture firms, it’s probably worth spending some time thinking about where your startup will call home.  A look at the Q3 2009 venture capital funding statistics compiled by ChubbyBrain offers a data-driven view into venture investment by geography which may help entrepreneurs with another data point as they consider the age old question of location, location, location.  (For a data-driven perspective into the world of venture capital, download the free 44 page Fast Company - ChubbyBrain Q3 VC Activity Report)   

First, let’s start with the easy solution.  Set up in California, specifically Silicon Valley. 

We recently added over 300 American business incubators and tenant companies to our investor database. Additionally, we presented some national data trends on incubators.  We’ll periodically be turning to individual states to take a deeper look at their incubators and portfolio companies.

Today we’ll examine Vermont.  A state with low incubator activity, Vermont has only 1 incubator, much less than the national average of 8.3 incubators per state.  Additionally, the green mountain state has 17 companies in incubation, which is less than national average of 110 companies per state.  Of the 17 tenant companies, only 7 were considered scalable and thus added to our database.  (Note: Our focus at ChubbyBrain is primarily on scalable companies. Thus, consulting, retail, and service companies that may be in these incubators are not included in our database or the remainder of this analysis).  This gives Vermont a scalability ratio of 47%, close to the national average of 44%.

We recently added over 300 American business incubators and tenant companies to our investor database. Additionally, we presented some national data trends on incubators.  We’ll periodically be turning to individual states to take a deeper look at their incubators and portfolio companies.

Today we’ll analyze Maryland.  With 163 companies in incubation across 14 different incubators, Maryland beats the national averages of 110 companies and 8.3 incubators per state.  However, of the 163 tenants companies, only 59, or roughly 36%, were considered scalable and thus added to our database.  (Note: Our focus at ChubbyBrain is primarily on scalable companies. Thus, consulting, retail, and service companies that may be in these incubators are not included in our database or the remainder of this analysis).  Maryland’s scalability ratio of 36% is much lower than the national average of 44%, suggesting that Maryland incubators support a good amount of smaller, “mom-and-pop” retail and service shops, too.

We’d recently added over 300 incubators and their portfolio or tenant companies to ChubbyBrain and also presented some high-level national metrics on US incubators.

Now we’ll be periodically turning to individual states to take a deeper look at their incubators and portfolio companies.

Today, we’ll be taking a look at Georgia, home of 9 incubators. Of the 142 companies housed currently or in the past within these incubators, 82 were scalable and hence added to ChubbyBrain.  (Note: Our focus on ChubbyBrain is primarily on scalable companies so consulting, retail or service companies that may be in these incubators are not included in our database or the remainder of this analysis). This means Georgia’s scalable percentage stands at 57.7% which is much higher than the average of 44% nationally.

We’d recently added over 300 incubators and their portfolio or tenant companies to ChubbyBrain and also presented some high-level national metrics.

Now we’ll be periodically turning to individual states to take a deeper look at their incubators and portfolio companies.

We are starting with Illinois which has a robust business incubator community containing 274 companies much higher than the national average of 110, even though we identified only 6 incubators in the state, much lower than the average of 8.3.  Of the 274 companies housed currently or in the past within these incubators, 165 were scalable and hence added to ChubbyBrain.  (Note: Our focus on ChubbyBrain is primarily on scalable companies so consulting, retail or service companies that may be in these incubators are not included in our database or the remainder of this analysis).  This means Illinois’ scalable percentage stands at 60.2% which is  much higher than the average of 44% nationally.