Venture is Back, Baby
Over the past few weeks we’ve seen extremely high activity in new venture investments. Starting in September, we witnessed the return of multiple term sheet deals, short fuse situations, and a renewed urgency to most fund-raisings. I heard last week of a hot late stage deal attracting ten (yes 10) term sheets. It’s a really great company, but just one quarter ago that number would have been much lower. FastCompany’s Q3 Venture Capital Activity Report picks up some of this, with Q3’s activity marking a high for 2009, and growing 14% from Q2. The same report shows Series A internet sector deals totaled 66 in Q3, up from 20 in Q1 of 2009. Our sense is that Q4 will show similarly high numbers. The same VCs who hunkered down in January were back in the game in September, and they were back in force. We call the rise in new investment activity, “back to school investing”, and it represents a significant return to health after the prolonged hiatus that started in Q4 2008 with the infamous “RIP Good times” slide deck. Venture is back. And it’s back because of one word: Exits.
