Trending: Man wearing swastika armband in Seattle gets punched out after his image spread on social media

Avalanche danger on the VC slopes. Photo: Peter Dutton

It seems that every quarter in the venture capital industry brings a bit of good news and bad news. So, where do you want to start this time?

Let’s start with the good.

The National Venture Capital Association, Thomson Reuters and PricewaterhouseCoopers today released numbers showing that venture capitalists pumped $28.4 billion into 3,673 deals last year, a huge influx of capital that represented a 22 percent increase in dollars over the $23 billion raised in 2010.

In fact, the venture capital haul represented the third highest total in the past 10 years. And a number of industries, including clean tech and the Internet, saw double digit increases

There’s certainly money sloshing around, with VCs helping to create new companies in a variety of industries.

National venture capital investments are on the upswing. Source: MoneyTree

Now, here’s the bad news. The money just doesn’t seem to be flowing here in the Northwest.

Washington state had an absolute awful fourth quarter. Just $88 million was invested in the state, the lowest total since the third quarter of 2003. It also represented a 55 percent drop in investments over the previous quarter, and a 35 percent decline over the same period last year. Washington state now ranked 8th in venture capital investments for the quarter behind New Jersey, Pennsylvania and Colorado.

What’s going on?

Well, for one, some of the Seattle area venture capital firms have either folded their tents or are running low on fresh powder. Others, such as Ignition Partners and Frazier Healthcare, have devoted substantial amounts of capital to investments outside of the region.

During the fourth quarter, Ignition participated in more than half a dozen financing deals in firms outside of the region, representing tens of millions of dollars.

Of course, there’s also the possibility that there just aren’t many venture-worthy deals in the Seattle area right now. That might be a hard pill for entrepreneurs to swallow, but the numbers certainly seem to be telling a story.

It is also getting cheaper to start a company, but that’s a trend that doesn’t matter whether you’re an entrepreneur in Boston, Austin or Seattle.

Seattle wasn’t the only region taking it on the chin during the fourth quarter. In fact, things slowed down compared to the third quarter on a national basis as 844 deals brought in $6.5 billion.

Other tech hotbeds — such as New York (70 deals and $453 million) and Texas (31 deals and $306 million) — also saw investment levels decline over the previous quarter. In California, investment levels held relatively steady as $3.8 billion was invested in 340 deals. Massachusetts was the big gainer, seeing investment totals jump from $591 million in the third quarter to $740 million in the fourth quarter.

That’s more than what was invested in Washington state for the full year, with totals for the state coming in at $541 million. In fact, venture capital investing was down 16 percent in Washington state on the year — a stark contrast to the 22 percent rise nationally.

Seattle’s performance is best described as anemic.

Here are the companies that were lucky enough to score capital during the fourth quarter in the state, according to the MoneyTree report.

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