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PRINT THIS PAGE Q3 2005 US venture capital investing up on Q3 200424/10/2005. Source: AltAssets. 
 US venture capital investing increased in the third quarter compared to the same period last year, the first year-on-year rise in 2005. A total of 555 deals were completed, raising a combined $5.49bn. This represents an increase of seven per cent on deals done and nine per cent on value compared to Q3 2004, according to the Quarterly Venture Capital Report released by VentureOne and Ernst & Young LLP.
The deal-flow in the third quarter of 2005 represents the largest number of deals in a single quarter so far this year. While the total amount invested declined slightly from the second quarter of this year when a total of $5.87bn was invested, the year-to-date total of $16.19bn is nearly on par with the amount invested in the first three quarters of 2004 ($16.37bn).
The quarterly total was bolstered by higher investments for IT companies: the amount invested in this category ($3.11bn) increased 11 per cent over the third quarter of 2004 ($2.81bn) and was the largest amount of capital invested in IT in a single quarter since the second quarter of 2004, when a total of $3.48bn was invested.
Robb Browne, Bay Area Venture Capital Advisory Group leader for Ernst & Young, said, 'The strong investment levels in information technology continue to be the result of a considerable amount of interest by investors in later-stage companies, as they see the potential for viable IPO and M&A exits, such as the $337m acquisition of Perabit Networks by Juniper Networks.'
The largest deal of the third quarter was a later-stage IT deal: the $150m round for wireless communications firm FiberTower.
In the healthcare category, total deal-count was up, with 140 deals, 11 more than in the same quarter a year ago. However, the amount invested, $1.66bn, declined three per cent from a year ago.
The products-and-services category also posted significant increases in the third quarter. In total, there were 86 deals and $642.6m invested in this category, which translates into 43per cent more deals and 53 per cent more capital than in the third quarter of 2004.
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