Q3 Venture Capital Data: The Fall Begins

Venture capitalists invested nearly $7.2 billion into 907 U.S.-based companies during the third quarter of 2008, according to data released this morning by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (publisher of peHUB). It represents the lowest quarterly tally since Q4 2006, and the fewest number of companies funded since Q1 2007.

On the upside, these numbers are actually better than I had been expecting (particularly based on some preliminary figures I shared earlier in the month). A 7% drop in activity between Q2 and Q3 isn’t good, but it’s certainly stronger than other segments of the capital markets. For example, domestic PE deal activity dropped 23.2% during the same period.

Biotech leaped software for the top industry spot, while cleantech surged into third place. The quarter’s two largest deals — SolarReserve and AVA Solar — came from the cleantech space, while the first and fifth-largest deals — Pacific Biosciences of California and Proteolix — came from biotech. The fourth-largest was medical device maker CVRx.

Per usual, VCs were most likely to invest in companies based in Silicon Valley. The region received $2.77 billion, compared to just $834 million for New England. LA/Orange County, NY Metro and the Midwest rounded out the top five.

The quarter’s most active VC firm was Draper Fisher Jurvetson, which participated in 26 transactions. It was followed by Intel Capital (20), New Enterprise Associates (19), Kleiner Perkins Caufield & Byers (18), Sequoia Capital (17) and U.S. Venture Partners (17).

Here’s the data in downloadable form:

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