Dow Jones VentureSource 2Q09 Results

Dow Jones VentureSource released results for U.S. VC Financing for Q2. VC financing during Q2 rebounded 32% from a dismal Q1 but was down 37% compared to the same quarter last year. For the first time, more capital flowed into health care than IT companies. While biopharmaceutical and medical device investments decreased, the health care services sector had a great quarter, improving nearly three-fold.

“Health care investment was the only sector to spring back to levels seen before the economic meltdown that began in the third quarter of 2008.”

The following figure summarizes the proportion of dollars invested into the different industries (click on figure for larger view).

This rotation to health care is pretty amazing considering the capital requirements and risks associated with health care startups relative to IT companies. I believe that investors recognize that there are still healthy exit opportunities in health care compared to other industries. In my opinion, there is still a lot of downward pressure on the VC industry. Hopefully, health care can remain a silver lining moving forward.

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