The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By Tom Taulli, InvestorPlace Writer

NEW YORK ( InvestorPlace) --Even though the IPO market was choppy last year -- especially in light of the European debt crisis -- we still saw some mega-deals in the tech space. They included operators like Groupon ( GRPN - Get Report), Zynga ( ZNGA), LinkedIn ( LNKD), Pandora ( P) and Zillow ( Z).

Sensing opportunity, venture capitalists also got aggressive with their dealmaking. According to the MoneyTree Report , which is based on the analysis of PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters, funding reached $28.4 billion across 3,673 deals last year. This represented a sizzling 22% increase in dollar volume over 2010.
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  • If you drill down on the numbers, you'll see that Internet companies saw lots of interest. The total investment amount came to $6.9 billion, up 24%. Keep in mind that it was the most active period since the dot-com boom.

    Yet we might not see the same kind of craziness that marked the 1990s. The fourth quarter saw slippage in the numbers -- that is, Internet deal activity declined by 23% (in terms of transaction amounts). Perhaps a big reason was that investors were getting a bit concerned about the valuations.
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  • Another hot area was software. In fact, the amount spiked by 38% in 2011 to $6.7 billion. No doubt, a key driver has been the move to the cloud. Already, the space has attracted significant M&A interest from big players like Oracle ( ORCL) and SAP ( SAP). That's the kind of thing that motivates VCs to open up their wallets.
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  • Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of All About Short Selling and All About Commodities. Follow him on Twitter at @ttaulli.

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  • This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.