When ChubbyBrain posted its Q2 venture capital activity roundup last Tuesday (July 14th), armies of venerable researchers in the hallowed halls of Dow Jones VentureSource were still fussing about their preliminary survey results. On Saturday, five days late, they finally released their figures. Not a very exciting event, given that the report merely confirmed what ChubbyBrain followers already knew.  But, as they say, better late than never. We’re pleased that within only a few months of going live, our dedicated team of five was able to so successfully challenge a process that the orthodoxy over at Dow Jones VentureSource has managed to make both somewhat opaque and indisputable.  Our numbers were so good that last week, the Wall Street Journal, who is owned by the same news media conglomerate as Dow Jones, deleted them from the comments section of their blog.  See below for screenshots.

Since we are still growing and our resources limited, many of you may have missed our full post and analysis from last Tuesday along with the 9 page pdf which we issued here.  That said, we would like to thank ReadWriteWeb, Xconomy, and CNET amongst others for believing in our little startup’s rigorous technology, process and the power of mass collaboration enough to publish our numbers.

But back to what we do best: reliable and timely information services. Some of the highlights we provided included $5.329B flowing from venture capital firms and the dominance of healthcare investing in the quarter.  We also highlighted the fact that early stage investment especially in internet was quite healthy and noted the geographies, specifically cities, where the most venture capital deals and dollars flowed.  We also showed data that dispelled the notion that emerged from the Q1 numbers that venture capitalists would only fund investments to fortify existing portfolio companies.

Dow Jones’ number came in at $5.27B,  so it looks like they missed a few deals that we found, though they did pick up on the healthcare trend fairly early in the week (only a couple of days after our results).  We’d actually commented on their post about the healthcare investment trend that appeared in the online Wall Street Journal blog to contribute to the discussion. Unfortunately, it seems the fact that our numbers were out early and were right on the mark prompted the deletion of the comment.  The screenshot of the before and after, e.g., with and without our comment, is below as is our full original comment.  We don’t think anything in our comment was offensive, antagonistic, etc, but you can decide for yourself.

At any rate, we are looking forward to Q3.  Be sure to catch our numbers first, and feel free to confirm with VentureSource later.

Here is the Wall Street Journal blog with Our Comment

Here is the blog After Comment Deletion

Our original comment in its entirety is given here for those interested.

Thanks Scott.  It is good to see that the Dow Jones VentureSource numbers when they come out will be consistent with the report we issued earlier this week about Q2 2009 venture capital activity.  We found a healthy overall jump in overall VC investment levels (61% qtr over qtr) and also saw the strength of healthcare investing (37% of the total).  For those interested in understanding what actually happened in Q2 2009, below are the highlights along with an explanation of our methodology and the rigor we use to arrive at our numbers.

We’re looking forward to seeing how the numbers ultimately look.  - Regards, Jonathan

Full summary findings and 9 page pdf are available here: http://www.chubbybrain.com/blog/2009/07/venture-capitalist-activity-up-61-in-q2-2009-is-the-worst-over/

HIGHLIGHTS for Q2 2009

Deal value totaled $5.329 billion in Q2 2009.  This represents a nearly 61% increase over the $3.314 billion of investment we tracked in Q1 2009.

While there was broad-based industry participation with funding going to 10 different sectors and 55 different industries, the healthcare sector saw the greatest level of funding garnering 37% of investment dollars.

Money is available for early stage startups.  Despite conventional wisdom that venture firms would invest only to fortify existing portfolio companies, the quarter saw healthy levels of early stage investment in Seed and Series A rounds accounting for 35% of the number of deals.

There was broad geographic participation in the quarter, but California dominated.  Thirty-five different US states housed companies receiving venture money.  However, California dominated based on number of deals and dollars invested with Massachusetts, Washington, New York and Colorado rounding out the top five.

METHODOLOGY

Because there are often many numbers floating around about venture capital activity in the quarter, below are  the rules we use to pull our numbers together so you understand our process and also have a better understanding and insight into the numbers we publish.

What is included?
- Only fundings in the USA with participation from venture capital firms
- For follow-on investments, only the portion of the investment made in the quarter – not the total round/series is included.
- Amount that has closed – not the intended size of the round
- Only verifiable fundings for the quarter either confirmed by (1) regulatory filings (2) direct confirmation with firm or investor or (3) press release.

What is not included?
- Angel investment by angel groups or angel individuals (unless there was participation from a venture capital firm as well)
- Private equity firm investments
- Private placements aka PIPEs, Private Investment in Public Equities
- Debt issued to emerging, startup companies
- Grants by government or state bodies to emerging, startup companies

Rgds,
Jonathan Sherry
co-founder, ChubbyBrain
jsherry(at)chubbybrain(dot)com