Stepping Down in San Diego: Venture Funding and Our Top 10 List of Fourth Quarter VC Deals

Xconomy San Diego — 

Venture investing in San Diego declined substantially during the last three months of 2010, according to additional data coming in today from Dow Jones VentureSource, and from the MoneyTree Report.

VentureSource found that venture firms invested $154.3 million in 21 San Diego startups during the fourth quarter of 2010. That was a 27 percent decline in capital and a 5 percent decline in deals from the $210.7 million that went into 20 deals during the same quarter in 2009.

The MoneyTree Report showed a 43 percent drop in venture capital invested during the fourth quarter in San Diego, with a 25 percent decline in deals. (Venture firms put $193.1 million into 26 startups in the quarter, down from $343.9 million in 32 companies during the same quarter in 2009).

Both surveys also showed an overall decline in San Diego venture funding for the year, with MoneyTree counting $846.9 million as a 10 percent decrease in capital invested from 2009 and VentureSource counting $655.8 million as a 28 percent drop from 2009. MoneyTree found that the number of deals in San Diego increased slightly (to 115 from 109) in 2010 while VentureSource said the number of deals declined (to 84 from 87).

“We are relatively flat year-over-year on the number of deals,” says Dan Kleeburg, a life sciences audit partner with Ernst & Young in San Diego. “On the value of deals, I agree that we’re down.” Kleeburg noted that San Diego’s strength lies in the life sciences sector and IT (especially networking and communications), which were weak areas for venture investing nationwide.

“Anecdotally, what I would say is there has clearly been a positive change in … Next Page »

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