VCs Invest $127.7 million in Texas Companies in the 3rd Quarter

Venture capital investments in Texas dropped nearly 29 percent in dollar volume to $127.7 million in 35 deals during the third quarter, according to the Moneytree survey.
That compares to $179.5 million invested in 38 deals in the second quarter.
For the first three quarters of the year, Texas companies have received $716.8 million in 119 deals.
Nationwide, venture capitalists invested $6.5 billion in 590 deals in the third quarter, down 11 percent in dollar amount from the second quarter.
The MoneyTree Report comes from PricewaterhouseCoopers and the National Venture Capital Association based on data provided by Thomson Reuters.
For the first three quarters of the year, venture capital investment drop was $20 billion into 2,661 deals, well below this point last year.
“The decline in funding for Seed/Early stage companies is firmly in place – we’ve seen a drop in dollars and deals both quarter-over-quarter and year-over-year,” Tracy T. Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers, said in a news release.
“We’re seeing fewer new venture funds being raised which means less capital is available for new investments. And, we’re seeing venture capitalists be very cautious with the capital that is available due to the lack of a significant number of liquidity events. Instead, venture capitalists are continuing to support the companies already in their portfolio.”
The software industry continues to get the bulk of the funding with $2.1 billion invested in 304 deals during the third quarter and the fourth quarter in a row in which investment exceeded $2 billion.
Investment in biotechnology and medical devices topped $1.7 billion in 181 deals showing an increase in dollar volume but declined in the number of deals done for the third quarter.
Overall, though, investment in biotechnology and medical devices is down 19 percent in dollars and 12 percent in deals for the first three quarters of 2012, compared to the same time last year.
Investments in alternative energy, pollution and recycling, power supplies and conservation also dropped 20 percent in dollars but rose slightly, 2 percent, in deal volume with $791 million going into 58 deals during the third quarter.
Other industries seeing growth in dollars invested in the third quarter included financial services, healthcare services, business products and services and retailing.

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