Megan Muir

Today Dow Jones VentureSource reported that venture capital firms invested $8.4 billion in Q3 2011, 29% more than in Q3 2010.  Additionally, the total of 765 deals is an 8% increase over the third quarter of 2010.

Jessica Canning, global research director for Dow Jones VentureSource, noted that:

Venture investment rose in the third quarter, putting the industry on pace to near pre-recession investment levels by the end of the year.  While it’s unclear how long venture capitalists can continue at this pace given the weak fund-raising and difficult exit environments, the increase in deal activity, especially among early-stage start-ups, shows VCs are optimistic they will be able to support the next generation of start-ups.

A significant portion of the VC investments made in Q3 2011 were early stage, with seed and first round financings making up 42% of the deals and 21% of the funds invested during the period.  The consumer internet, IT, business and financial services, medical device and energy sectors all saw increases in both dollars invested and number of companies funded.

Read the full release here.