Funds Go To Older Tech Firms

Heavy Investments Technology companies receiving the most venture-capital funds in the second quarter include: >> Vonage, a provider of voice-over-IP phone services, $200 million >> Entrisphere, a provider of multiservice broadband access-loop networks for telecom carriers, $75 million >> Caspian Networks, a maker of flow-state routers for IP traffic, $55 million >> Omniture, a developer of Web-site analytics software, $40 million Data: Ernst & Young/Dow Jones Venture One

Venture-capital investments in technology companies in the second quarter dropped significantly from last year, with companies that have some history faring better than market newcomers

Three hundred deals raised nearly $2.8 billion, down 18% from nearly $3.4 billion raised in 357 deals in last year's second quarter, according to the Ernst & Young/ Dow Jones VentureOne Venture Capital Report issued last week.

Much of the recent investments went into companies that have been around for several years. The amount invested in later-stage companies in all categories of business increased 23% in the second quarter to $2.98 billion, up from $2.4 billion invested in last year's second quarter, and the number of deals rose from 193 to 210. All but two of the 10 companies receiving the largest investments were later-stage ventures.

IT companies represented many of these later-stage investments, says John Gabbert, VP of worldwide research for VentureOne. In fact, five of the top 10 were later-stage technology companies.