Despite a dip in actual venture capital dollars invested in local firms in the third quarter, a majority of Washington-area VCs said they have plans to invest in at least one new company in the fourth quarter, according to a survey released Thursday by the Mid-Atlantic Venture Association.
The survey, which polls regional investors on a quarterly basis, points to the continuing maturity of the Washington venture market, said Julia Spicer, executive director of MAVA.
“Results from this quarter’s survey validate the early market indicators often used to predict a healthy and vibrant investment climate such as increases in deals closed, deal flow and valuations,” Spicer said.
Venture capitalists invested more than $332 million in Washington area companies between August and October, which was down from nearly $455 million in the previous quarter, but up from $321 million in the third quarter of 2005.
There were 54 deals this quarter, and that number is expected to increase in the next, with 97 percent of survey respondents — the highest ever — sayingthey plan to invest in at least one new deal. In addition to a boost in deal flow, the survey also indicated more local investors plan to concentrate their deals in the mid-Atlantic region, rather than looking out of market. Of the deals forecasted for the fourth quarter of 2006, 38 percent of respondents said at least 60 percent of those would be in the mid-Atlantic. And as the market matures, more out-of-market investors are also looking in the Washington region, Spicer said.
We’ve seen “a continued maturity of the venture funds in the market … and more [VCs] putting money into our markets,” she said. “It shows a more mature financial market here when you have capital that can move in market and out of market.”
