Early Stage Deals Gain, VC Investment Totals Drop

An Ernst & Young/VentureOne report shows that seed stage venture deals increased last quarter, despite an overall funding drop of 16%. The report showed that nationwide, there were 474 deals that raised $4.6B in funds, a drop of 9% in deal flow. The largest investment area was in communications startups, according to the report, with new financing centered around connectivity and wireless solutions. 32% of venture capital rounds were seed and first round deals this qurater, up from 30% the fourth quarter of 2004. The $232.5M invested in early stage deals were the highest since Q4 2000.