According to the Quarterly Venture Capital Report released this week by
Ernst & Young LLP and Dow Jones VentureOne, Austin companies are raising money at a clip not seen since 2001.  During the third quarter of 2007, 19 companies raised almost $220 million.  While this amount is up 4% from last year’s third quarter, the results may be a bit skewed, seeing how three companies raised over $120 million of this quarters funds (Heliovolt, Luminary Micro and LDR Spine).  On a national
level, U.S. companies received venture financings of $7.1 billion through 887 deals, for an average of just over $8 million per financing.

In the regional rankings,
Texas is back to ranking 4th, having had 39 companies raise $386 million over the quarter.  This is much improved after the state had slipped to 8th among regions raising venture money, behind
stalwarts Bay Area and Southern Cal and 5 others (New England, New York
Metro, Washington State, Potomac and Colorado) in the second quarter. 
However, for the year, Texas is still 8th, with just over $1 billion in venture funding raised, and only $30 million ahead of the 9th place Midwest.

It is also interesting to see that Austin is in line with the national trend.  Nationally, software and life sciences are the top two sectors, with clean-tech increasing to $844 million in investment, an 80 percent increase
compared to the second quarter of the year. For Austin, always strong in software and semi-conductors, it is great to see a burgeoning life science sector to complement our strong, and getting stronger, clean tech sector.

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