VCs roared back in 2010, investing the most money since 2007
Venture capitalists invested the most money last year since 2007, pumping $21.8 billion into 3,277 deals in 2010, according to a MoneyTree Report released today by PricewaterhouseCoopers and the National Venture Capital Association.
Context & Ripple Effects
The MoneyTree figures close out a three-year pullback: $21.8 billion across 3,277 deals is the strongest venture year since 2007, the cycle's last peak. Notably, PricewaterhouseCoopers sits on both sides of this datapoint — the same firm that produces the IAB's internet-advertising surveys, which logged record ad-revenue quarters through 2006 and 2007 before the crash, also co-authors this investment tally with the National Venture Capital Association.
That dual vantage matters for reading the number: the ad-funded consumer internet was the revenue engine of the last venture boom, so a return to 2007-scale deployment suggests investors are re-funding categories whose monetization models already proved out once. Neither syndicated pickups nor public reaction threads appear in the coverage set, so the read rests on the report itself.
First-order effects
- Venture-backed founders enter 2011 raising against a pool that has refilled to levels last seen in 2007 — $21.8 billion across 3,277 deals restores negotiating leverage lost during the post-crash contraction.
Second-order effects
- Ad-supported internet businesses — the sector whose record revenue run PwC documented through the 2006–07 boom — are positioned to absorb a disproportionate share of returning capital, as investors favor categories with demonstrated monetization over unproven models.
Third-order effects
- Every subsequent MoneyTree release will now be benchmarked against 2010's 'best since 2007' line, turning the PwC/NVCA series into the standard gauge for whether recovery holds or relapses; sustained deployment at this scale would also pressure limited partners to commit to new funds at pre-crash cadence, recreating the boom-bust rhythm of the previous cycle.
The trend: Venture capital moves in multi-year boom-bust cycles measured against prior peaks, and the PwC/NVCA MoneyTree series serves as the industry's standard cycle gauge.