Venture Cap Market Awake, Not Yet Crazy

There's good news for the Web-savvy dead: Respectance.com, a social-networking site built around the recently deceased, raised $1.5 million from venture capitalists last week.

Understandably, the site doesn't rely on ads. It charges, somewhat less understandably, a dollar per video download.

Then there's LiquidPiston, a company that in the dawn of the fuel cell promises to reinvent the internal combustion engine. It raised a less-than-promising $1.75 million.

These financings occurred in the past week or so, and were chronicled by the blog Venturebeat, a chronicler of start-ups that, deserving or not, receive venture financing. Any of them could break out to change how we live, but the odds seem to be against them because, well, they're a bit silly.

I mention these investments, rather than the more deserving start-ups, because of the most recent data on where venture money is going. Venture capitalists invested $7.4 billion into U.S. companies, the ninth straight year-over-year quarter of venture investment, according to VentureOne and Ernst & Young.

The number of companies that VCs invested in was 717, the largest number in a single quarter since 2001.

At the same time, 22 companies backed by venture capital went public in the second quarter, VentureOne said. Combined, those IPOs raised $2.7 billion -- more than double the amount from the year-ago quarter. And more importantly, it was the biggest one-quarter bounty since late 2000.