By
Donald Zuhn ––

On
Tuesday, the National Venture Capital Association (NVCA), a trade association
representing the U.S. venture capital industry, released the results of its latest
venture funding study.  The study,
conducted with PriceWaterhouseCoopers and Thomson Reuters, indicates that
venture capitalists invested $4.8 billion in 637 deals in the third quarter of
2009, a 17% increase in dollars and 3% decrease in deals as compared to the
second quarter of 2009.

According
to the study, the Life Sciences sector, which comprises the biotechnology
and medical device industries, had a "solid quarter" relative to
other industry sectors.  In particular, the
biotech industry, which received the highest level of funding in the third quarter,
secured $905 million in 104 deals (a 4% decrease in dollars and a 16% increase
in deals relative to the second quarter), and the medical device industry received $617 million in 71 deals (a 6% decrease in dollars and 15% decrease in deals). 
In contrast, the Software sector dropped to its lowest level of funding
since 1996, and ten of the 17 sectors examined by the NVCA experienced dollar
declines in the third quarter, including Semiconductors (14% decline; a 10-year
low), Healthcare Services (57% decline), Computers and Peripherals (40%
decline) and Telecommunications (17% decline).

Tracy
Lefteroff, the global managing partner of the venture capital practice at PricewaterhouseCoopers
called the increase in third quarter venture capital funding "very
encouraging," and predicted that the pace of investing would "continue
to strengthen over the next several quarters as long as the IPO markets begin
to open up and M&A activity increases."

Additional
information regarding the study can be found here.