I am on the email list for Rutberg & Co.’s Digital Media Industry Newsletter. Usually I don’t pay much attention to it, but the most recent issue caught my attention. According to Rutberg, during the month of October, there were 49 venture financings in the digital media space. Well, that sounds like a lot. But, when you look at the amounts invested there are 18 deals with investments in excess of $5 million and there are many with either undisclosed valuations or valuations under $2 million. These numbers suggest that Rutberg is lumping a lot of angel deals into their definition of venture financings. 

I know from our Perspectives publication, that it can be difficult to identify what is and what is not a Series A financing. Simply searching data bases for Series A or first round is way over inclusive. We actually pull copies of the charters of the companies upon which we report and review the charters to determine if the company fits the relevant category. In any given issue, our search turns up many companies and transactions that really are not venture financings (or at least Series A etc.). 

Along similar lines, some industry organizations publish number of transactions and total valuations that seem way high. I can’t get behind their numbers, so I don’t know if they are accurate, but I suspect that the definitions used include lots of deals that maybe don’t really fit the definition of a venture investment. The point of all this is that, nobody (including industry players whose published numbers purport to be definitive), really knows what the industry numbers are.