VC funding in second quarter continues 2011 uptick

Private company research firm CB Insights today released a new report on the state of venture capital financing for the second quarter of 2011. With $7.6 billion invested in 768 deals in the second quarter, we are on track to see $29 billion to $30 billion invested through all of 2011.

Quarterly VC investment Q3 2009 to Q2 2011

California, Massachusetts, and New York combined to take nearly 75 percent of U.S. venture capital funding in the second quarter of this year, the highest concentration in five quarters. California remained on top with deals in the state up 27 percent and dollars up 19 percent. California’s deals were primarily centered on Internet companies, followed by health care, with the two sectors combining for 58 percent of the state’s deals and 56 percent of the funding.

After reviewing the report and statistics, I’m starting to think that we aren’t actually in a bubble, but may be at a peak of what is the new normal in terms of overall investment dollars. Considering that that the number of deals has stayed relatively stable, and that certain months have spiked two years in a row, statistically it looks like the bubble worries have been overwrought.

If nothing else, this report suggests that it’s a great time to start a company and look for venture financing.