Today, VentureOne reported that the total of venture capital investments made in the U.S. increased by a modest 2.2% to $22.13 billion in 2005 from $21.65 2004. One interesting note was that the number of venture deals actually declined by 10 from 2,249 to 2,239. Fourth quarter numbers improved slightly more than the full year numbers, showing a 2.6% increase in funding dollars in the 4th quarter of 2005 over the 4th quarter of 2004, while the number of fundings increased just more than 1.2%.
The import of the decline in the number of 2005 deals associated with an increase in total funding is the 2.7% increase in the average deal size from $9.62 million in 2004 to $9.88 million in 2005, suggesting that:
1) It is just marginally more difficult to get a deal done in the current venture climate.
2) Later stage deals are getting easier to do...
3) ... while earlier-stage deals are getting more difficult.
What is your experience?
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