After Q1’s multi-year venture capital lows, the conventional wisdom was that venture capitalists would use their money to fortify existing portfolio companies.  Of course, the natural outcome of this would be decreased investment flowing to early stage startups.  Our Q2 2009 funding analysis which showed a 61% jump in venture capital investment in the quarter noted the fact that early stage investment was actually quite healthy accounting for almost 35% of the total deals.

Taking a closer look at Series A investment levels for the quarter’s three most active investment sectors: healthcare, internet and technology, we observe some interesting trends.

Internet

• The number of early stage internet startups garnering VC funding has actually gone up quite significantly over the course of the year
• The average level of funding per Series A round has remained quite consistent in a band averaging $3.8M per investment round

Healthcare

• The number of healthcare startups receiving series A funding has remained fairly consistent over each quarter with a modest uptick in # of fundings in the April to June 2009 timeframe
• As obvious from the graph below, there is significant variability in terms of the average amount of healthcare series A rounds.  Because of large amounts of investment that can be made in a single deal, the average deal size can be quite volatile.

Technology

• Similar to the healthcare arena, the number of technology startups receiving series A funding has remained fairly consistent over each quarter with a modest uptick in # of fundings in the April to June 2009 timeframe
• In terms of average size, technology Series A round were generally in the $4-$6 million range with the exception of May 2009 which had fewer deals but all larger in size.