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Venture capitalists invest $10.6 billion in historically “soft” Q3

By Rob Starr, Content Manager

Quality deals are still getting funding although the overall count has ebbed to the lowest point since Q3 2010 with the scenario being called a normalization process after record breaking investments spiked previous results upward.

This is the broad takeaway from The MoneyTree™ Report by PricewaterhouseCoopers based on data from Thomson Reuters for Q3. Tom Ciccolella, US Venture Capital Market Leader at PwC, didn’t see any immediate cause for alarm pointing to an ecosystem that’s being held up on the shoulders of biotechnology, continuing investments in non-traditional industries and strong fundraising. He also said the current dip had a familiar history.

Deal Drop

“We did an analysis of Q2 and Q3 since the inception of the MoneyTree Report in 1995 and what we noticed was that Q3 generally speaking is a softer quarter,” he said adding that there

Tom Ciccolella

Tom Ciccolella

was a deal drop of 6.2% on average between the two .

PwC also took a look back at what effect presidential election years had on the results finding the deal drop was closer to 9% during these times previously.

Top Ten

The Biotechnology industry received $1.8 billion in investments in 87 deals for Q3.  Three of the top ten deals for the quarter were in this industry. Even though other benchmarks  spoke to a status quo like the fact Software companies accounted for 45 percent of the dollars and deals with $696 million going into 116 deals, Ciccolella did mention a few areas that were pause for subtle concern.

“We made sure to take a look at the deal count where there was a little bit of a dip in comparison to normal levels,” he said. “We looked at the number of deals from the last thirty quarters and found that it was close to one thousand typically. So Q3’s 891 in comparison is kind of lower than normal so we have our eye on that to see what the fourth quarter brings.”












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