Venture capital firms invested $4.7 billion dollars in Silicon Valley technology firms during the first three months of 2014, the highest quarterly total since the year 2000.
The San Jose Mercury News reports the investment in Silicon Valley represented about half of the $9.5 billion in total deals made nationwide in the quarter. Four of the five largest deals made were based in Silicon Valley, including $740 million for Cloudera, $250 million for Lyft, $250 million for AliphCom, and $215 million for TangoMe.
While the total amount of money invested is the highest since 2000, the pattern is very different from that boom year. Only nine Silicon Valley start-ups received money from venture capitalists during the quarter. Instead, most of the money is flowing to firms with a track record. The Mercury News quotes Mark McCaffrey saying, “There’s fewer deals, and higher competition.”
At least one venture capitalist thinks the focus on established firms could be a problem. Venky Ganesan of investment firm Menlo Ventures says he would like to see more money going to start-ups looking for seed money. He tells the Mercury News, “To me, that’s where the magic of the U.S. economy happens, the seed-funding for early stage.“