More Deals, More Dollars: Venture Capital Investments are Booming – Especially in the Tech Space

While America still fights off the lingering after effects of the Great Recession, one component of the country's economy is booming like it's 1999: venture capitalism. And what's good for VCs in the U.S. is usually good for Canadian startups—after all, many fly to Silicon Valley or Alley for funding. But even if they choose to stay here, aggressive American investing gives Canadian counterparts a vote of confidence when entrepreneurs come knocking.

According to data from Dow Jones, investment in startups climbed 10% in 2011 over 2010. That's every industry combined. But for web startups, the amount invested actually shot up 23% and the volume of deals done also rose (14%), suggesting high confidence in the tech sector.

Web and mobile startups got over $5 billion in investments across more than 450 deals in 2011. And while there were some rather large investments to buoy this number—Twitter and Zynga combined for close to one billion in funding—seed and first investment rounds made up an impressive 57% of all deals for web startups.

“Venture capitalists still have a strong appetite for early-stage web startups,” said Dow Jones VentureWire editor Zoran Basich in a release.

Information technology software also performed well, raising nearly $8 billion across over 1,000 deals in 2011—both numbers above 2010. In America or Canada, it looks like a good time to be a tech startup.

Photo: OnGreen