State of VC Q1 2006

Another quarter, another Moneytree Event.

PWC has got their numbers out, and this struck me.

VC in 2002 – 2005 can be summed up as:

$21 Bil / year
3000 deals.

And Q1 of ’06 looks more of the same.

In the DC Metro area, we saw a lot of 1st time investment grab the majority of the deals. But this wasn’t seed stage/early stage investment. The companies had been locked out in the early 2000’s and gone with customer money. So even though it was the first time institutional money was invested into the company, these companies had real customers/revenues, and a higher valuation.

And the good news is, more funds were looking at new deals, exploring out the landscape, instead of trying to bring back the terminally ill companies on lifesupport.

People complained more about seeing overvalued deals. But if these deals still get done, then it could be healthy for the region. It’s not like the late ‘90s where you did a deal that was too pricey, because everyone else was in. Now, deals that are too pricey, people get out.