By the Numbers: Seed Funding Is the New Black

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If Angelgate didn’t prove it, then the following data will; there’s a tinge of mania when it come to early- and seed-stage funding. The latest data from CB Insights, a market research firm that tracks the venture capital industry, shows that seed investments — primarily in Internet startups — increased from a mere one percent of all deals during the third quarter of 2009 to a whopping 11 percent of total venture investment deals during that period in 2010.

The sharp increase in seed-stage investments is the sole reason the total number of venture investments jumped during the third quarter of 2010 even though overall funding dropped. Nearly $5.4 billion was invested in 715 deals during that time frame, CB Insights’ data reveals. All that essentially made for one hot summer.

Here is some salient data from CB Insights’ latest report covering the July – September time frame:

  • Nearly $1.253 billion was invested in 233 Internet related deals. Series A media deal size was at an all time high of $3.4 million, once again proving that early stage investing is going through a frothy phase.
  • San Francisco saw 36 Internet deals that brought in $131 million, while New York City saw 31 Internet deals garner $126 million. In comparison, Mountain View, Calif., San Mateo, Calif. and Palo Alto, Calif. saw 21 deals focused on the Internet and they brought in a total of $174 million.
  • Early-stage investing is dominating the New York area and accounted for nearly 63 percent of all deals. New York can thank folks like Chris Dixon and Fred Wilson for bringing investment dollars to area startups.
  • Massachusetts saw a year-over-year decline in amount VCs invested during the third quarter of this year: $466 million was invested in 87 deals versus 73 deals which garnered $596 million during the third quarter of 2009.

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