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Venture capital investment into US companies close to $26bn in 200622/01/2007. Source: AltAssets. 
 With 2,454 deals completed and $25.75bn of capital invested, venture capital investment into US-headquartered companies reached the highest annual deal count and capital investment since 2001 when $36.43bn was put into 3,308 deals, according to the Quarterly Venture Capital Report released by Ernst & Young and Dow Jones VentureOne.
While 2006 activity is at a five-year high point, the fourth quarter of 2006 was the slowest quarter of the year with 561 deals and $5.82bn invested, declines of 13 per cent and two per cent from the fourth quarter of 2005, the report found.
Stephen Harmston, director of global research for VentureOne, said, 'I think 2006 proved that the US venture capital industry has entered a new cycle with many investors renewing their commitment to the entrepreneurial spirit by focusing attention and capital on companies that affect our health, the way we communicate, and the environment.
'The data also shows that investors are recognising the economic reality for start-ups today and are willing to sustain them with round sizes that are at the highest levels in six years,' Harmston added.
Overall, the median round size in 2006 was $7m, up from $6.5m in 2005, and the highest annual median since 2000. For the second year in a row, investors also are focusing more than a third of activity on early stage financings.
By industry, deal flow and capital investment into healthcare companies showed the most significant increases in 2006. Healthcare deal flow was up five per cent to 628 deals from 597 in 2005, and capital investment for the industry was up 12 per cent to $8.25bn from $7.33bn.
There was also significant deal flow and investment in alternative energy companies. Deal flow more than doubled to 41 deals in 2006 and the capital investment increased 190 per cent to $537.6m.
Deal count in the IT industry was down by 21 deals from the previous year, but capital invested in IT increased two per cent to $13.76bn, the most money deployed in technology companies since 2001.
Investment in business, consumer and retail products and services companies increased in 2006 over 2005, with a total of 274 deals and $2.63bn in capital.
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