MoneyTree Report finds steadying venture investment environment

Venture capitalists maintained a steady investment pace in the first quarter, with $12.1 billion going to U.S.-based startups, according to the MoneyTree Report.

The study suggests a strengthening of investment sentiment after financial market turbulence led to a slower, cautious investment environment late last year. Both expansion and late-stage activity rose from a big drop in the fourth quarter.

The survey is the second in two days to examine venture investing in the United States. On Thursday, Dow Jones VentureSource found that first quarter investments in the United States dropped 25 percent to $13.9 billion. However, VentureSource found little decline in the fourth quarter in contrast to the large drop the MoneyTree Report pointed to.

The MoneyTree numbers, put together by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters, found that first-quarter investments rose just slightly from the fourth quarter, when dollars distributed added up to just under $12 billion. Deal count was down 5 percent to 969.

Capital going to expansion-stage deals was up 25 percent from the fourth quarter and late-stage activity rose 10 percent. A pair of large deals played a big role in the quarter. Lyft raised $1 billion with General Motors becoming an investor, while Magic Leap gathered $793.5 million.

During the quarter, Internet investing was soft, but software and biotech startups attracted more money. Early-stage investing was down 18 percent in dollars and 22 percent in deals.

Overall, non-traditional investors scaled back their investment activity, said NVCA President Bobby Franklin in a statement.

Photo of money plant courtesy © iStock.com/Christopher Hudson