I was chatting with a Seattle venture capitalist this week about the state of early-stage investing in the region. His take: Things are red hot right now. It is a refrain I often hear from VCs, but is it actually rooted in reality? New numbers released today from CB Insights show a slightly different story. Venture capitalists pumped $119 million into Washington companies during the first quarter, on par with the previous quarter but down substantially from the $222 million invested for the same period last year.
But it’s not all about the dollars, and maybe this is what the Seattle VC was talking about. As it has gotten cheaper to build technology companies, the dollar amount invested isn’t quite as important as the number of deals. And, in that category, things are holding pretty steady. VCs invested in 31 companies last quarter, up from 28 during the previous quarter and down from 34 for the same quarter last year.
Internet investments led the state, driven in part by the massive $30 million investment in Seattle online comedy network Cheezburger Network. Internet investments accounted for 52 percent of the total. Other investments included nLight, Doxo, Tier 3 and Physware.
Nationally, things look to be picking up. According to CB Insights, $7.5 billion was invested in 738 deals during the first quarter. That compares to $5.9 billion invested in 730 deals for the same period last year. Internet investing was hot, with dollars up 83 percent and deals up 29 percent over the fourth quarter of last year.
New York, Massachusetts and California accounted for more than 60 percent of the VC deals in the country, while Washington’s share remained flat at just four percent. However, in terms of investment dollars, Washington’s share stood at just two percent for the quarter.
But one interesting trend did emerge in the first quarter in Washington state. The series A investment totals surged to 54 percent, up from just 13 percent in the first quarter and up from 27 percent for the previous quarter. (Series A deals also increased to 45 percent, up from 25 percent during the first quarter of last year).
