Venture capital investment in the US rose to $6.5 billion in the second quarter of 2010 compared to $4.9 billion in the first quarter, registering a quarterly increase of 34 per cent, according to report released by PricewaterhouseCoopers LLP (PwC) and National Venture Capital Association (NCVA) based on Thomson Reuters data.
For the first half of 2010, a total of $11.4 billion was invested in 1,646 deals, nearly 50 per cent higher than the $7.7 billion invested in 1,340 deals in the first half of 2009, indicating a more positive economic outlook by venture capitalists.
Venture capital is a type of private equity capital typically provided for seed and early-stage, high-potential growth companies in sectors such as, information and communication technology, biotechnology, etc.
Venture capital is distinguished from typical buyout private equity by its role in managing the companies as well as providing capital, aiming for higher rate of returns.
Investment in clean technology doubled in Q2 compared to Q1, and the life sciences sector, including bio technology and medical device industries also saw a significant increase of over 50 per cent. Seed and early stage deals increased notably in Q2 from previous quarters, the report said.
NCVA president Mark Heesen said, ''As the exit market begins to show signs of life, venture capitalists are now able to look increasingly at new investments outside their existing portfolio.''
''Investment in the clean technology and life sciences sectors, which are generally longer term and more capital intensive in nature, are balanced by smaller deals within the information technology sectors creating a diversity of opportunities for success for entrepreneurs, VCs and limited partners alike,'' Heesen further added.