Brutal venture capital stats for H1 2007 part 2

A few days ago, I posted about the weak venture deal list for the first half of 2007 (see post “Brutal venture capital stats for H1 2007“, Aug 1-07).

Within a few hours, a fellow blogger in Montreal ran a “don’t worry, be happy” retort. His stuff is well read and generally good, so I took the point seriously. In his view, if one looked to the south and divided U.S.-based venture capital flows by 10 (to account for the difference in population bases), we were in great shape, at least relatively.

The stats that Heri used in his post were for Q2 information technology firms: he found that US$979MM went into such deals in Q2 2007, according to E&Y and VentureOne. I don’t know how those figures will compare to NVCA data, but for now we’ll assume that they are correct.

The 10-1 ratio is an interesting concept to pursue, so I went to the U.S. National Venture Capital Association site to see just how much venture capital is being distributed in that part of the world.

According to Thomson Financial data on the NVCA website, US$7.44 billion was invested in the U.S.A. across 832 venture capital deals in the first quarter of 2007 (the most recent data). That compares to C$300.7MM here at home for the same period (ex-Geosign, includes Oil & Gas venture deals). Put a 10 or 11x factor on that and you’re still left with results that are less than 40% of the U.S. figures.

For all of 2006, the NVCA reported about US$26.4B of U.S.A. VC investment, as compared to C$1.03B in Canada. Again, still about 40% if you apply an 11x population factor.

MRM