Slight increases in VC investing, but industry still struggles

The second quarter venture capital numbers from the MoneyTree report don't paint quite as rosy of a picture for Washington state as last week's report from Dow Jones VentureSource. But they still show an uptick in the number of deals and dollars when compared to the first quarter -- an especially tough time for the venture business when most investors were sitting on their hands and pocketbooks.

The MoneyTree report from the National Venture Capital Association and PricewaterhouseCoopers shows that $122 million was invested in 32 deals in Washington, an increase in dollars over the previous two quarters but less than half the amount for the same period last year.

The VentureSource report -- which was released late last week and uses a different methodology -- showed $271 million invested in 40 deals in the second quarter. It also reported that Washington ranked third in the number of deals and fourth in investments.

The MoneyTree report, by contrast, placed Washington state in fifth place in deals and sixth place in investment dollars.

Oregon only recorded one deal for $3.6 million, while Idaho recorded two deals for $275,000.

Venture capitalists are trying to navigate a tough market, one in which initial public offerings are few and far between and M&A values aren't what they were even 12 months ago. Meanwhile, many VCs are deploying capital to existing portfolio companies rather than new startups.

So far this year, more than half of the deals in Washington state involved later-stage companies.

Still, the uptick in investments in the second quarter in Washington state and in the U.S.-- as reported by both VentureSource and MoneyTree -- could indicate that venture capitalists are getting a little more optimistic about deploying capital. But, one thing is for certain: The venture business is not what it was.

The $6.8 billion invested in U.S. companies in the first half of the year represents the smallest total since 1997.

Here's a look at the companies that received funding in Washington state during the second quarter, according to the MoneyTree report.

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