And although we've been seeing a lot of investors paying attention to later-stage companies, this trend doesn't apply across the board for web startups. A report released tonight from Dow Jones shows the Consumer Information Services sector -- a web-heavy vertical that includes many of the social media startups that consistently make headlines on Mashable -- is showing signs of recovery, even in seed and early-stage deals.
In most venture capital deals, trends favor more mature companies. Looking at all sectors, not just IT and the web, late-stage deals make up 44% of Q4 deals, a 5% YOY increase, while early-stage investments in startups were down to 32% from 35% in Q2 2009.
However, taking a look at VC deals for web-based startups, a Dow Jones rep said, "Investors are still very interested in new web companies." Consumer-facing web startups showed a large number of early-stage deals; around 57% of this sector's deals went to early-stage companies, a 4% increase YOY.
Online communities in particular are showing a heavy concentration of activity.
Information technology overall is responsible for the largest number of deals this quarter. The biggest hit in this sector is software. In IT, companies raised a total of $1.9 billion in 231 deals. This is a YOY increase from 208 deals raising $1.6 billion in Q2 2009. This year, software companies accounted for 156 deals and $908 million -- 24 deals and about $150 million more than in Q2 2009.
These number are consistent with the modest rise we saw in venture capital in Q1 2010, as well, with tech investments trending toward smaller dollar amounts over a larger number of deals.