Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – Venture capital investing rebounded strongly in North Carolina last year, returning to pre-recession levels.

Perhaps even more importantly, the data from PricewaterhouseCoopers and the National Venture Capital Association show:

1. The number of investments rose

2. The spread of deals by company category was broad

3. And deals covered the spectrum from early stage to expansion.

4. Plus, no one huge deal dominated the funding picture as in years past.

Reviewing the numbers, Jimmy Rosen, a partner at Durham-based Intersouth Partners, hailed the news.

“Investment activity dropped dramatically at the end of 2008 and after two long years, we expected to see an increase in investment in 2010,” Rosen said. “What’s really encouraging is that North Carolina so dramatically outpaced the rest of the country in its recovery back to pre-recession investment levels.

“We’ve certainly seen this in our portfolio and in the many great new companies starting and getting funded. I think it signals continued interest in N.C. entrepreneurs.”

Venture fund raising plunged to a seven-year low last year, taking some of the shine off the VC industry. (Read more here.) But a revived stock market and more “exits” for venture-backed firms through IPOs such as the Triangle-based SciQuest helped offset the grim money news.

NC deal making rebounds

North Carolina recorded 57 deals worth more than $456 million.

In 2007, Tar Heel firms brought in $577 million, the best year since $584 million in 2001.

“That’s up significantly,” said a positively thrilled Laura Hoke of PwC about the 2010 statistics.

“Biotech continues to dominate,” she explained, noting RTP being one of the nation’s largest biotech hubs. “But we saw a rebound in software. We hadn’t seen much in software for five or six years.”

E-mail marketing firm iContact led the year’s deal-making with a close in excess of $40 million. But a huge Motricity ($190 million, 2007) or other big deal didn’t dominate.

North Carolina ranked nationally, which is pretty typical. However, deal making did plunge to $62.7 million in the fourth quarter from $107 million a year earlier. It also was by far the slowest quarter of the year after $104 million, $141 million and $149 million in quarters 1, 2 and 3.

Hoke wasn’t concerned, however. “You really can’t look at investments quarter by quarter,” she said. “It’s just timing.”

Later-stage (23) and expansion (15) for more developed companies still dominated the deal making.

However, startups at seed and early stage development closed on 19 deals – one third the overall total.

Nationally, the investment picture turned gloomy in the fourth quarter as it did in North Carolina, but for the year deal making produced 19 percent more in dollar value than in 2009. (Read the details here.)

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