At the same time, though, the latest data from Hitwise shows that visits to Twitter's main domain have slowed down markedly over the last few weeks. This number doesn't take users into account who access the site from third-party applications, but it does show that a smaller number of users are going to the main site, which indicates a slowdown in new user adoption. Hitwise's Bill Tancer also found that fewer users are searching for Twitter on search engines. Hitwise's Clickstream report also shows a drop-off in new users that are coming to Twitter since April.

In April, of course, Oprah famously joined Twitter and the hype cycle around the service was in full swing. It looks like normality might be setting in now and growth is indeed slowing.

The question, of course, is if this is just a temporary slowdown or part of a larger trend. Maybe everybody who was going to join Twitter has already joined and the rest of the potential users are simply happy to use Facebook instead?

For now, we want to congratulate Twitter on closing this round, which will give it a chance to improve its technology and grow its team. At the same time, though, we also hope that Twitter will finally release some details about how it plans to make money in the long run and validate this valuation.

This kind of valuation is going to give Twitter a long runway before it actually has to make money, but at the same time, it also makes it unlikely that anybody is going to acquire Twitter in the near future.

We will obviously keep an eye on this developing story and will update it once we get more information.

Image used courtesy of Flickr user tao zhyn

For the quarter ending this past June, we compared the findings of three research firms that reported on the money invested in Q2:

• July 21, MoneyTree (PricewaterhouseCoopers, with data from the National Venture Capital Association and Thomson Reuters): $3.7 billion, with 612 deals,
• July 18, VentureSource (DowJones): $5.27 billion, with 595 deals,
• July 14, ChubbyBrain (a New York City-based startup partnering with ReadWriteWeb): $5.329 billion, with 613 deals.

VentureSource and ChubbyBrain seem to agree on the top line number. But MoneyTree's number is what most people report, and that is about $1.5 billion different.

As the old saying goes, "A billion here, a billion there. Sooner or later it adds up."

Disclosure: Our VC Funding Report

ReadWriteWeb has an interest in this. We sell a report for $299 that has details on the 240 deals done this quarter in the Internet, mobile, and SaaS space (not clean tech or bio tech), and this is powered by data from ChubbyBrain. So we are biased. But it also means that we are engaged and have been looking at this fairly deeply.

Who Cares?

We also think that accuracy matters, and we are trying to figure whom accuracy matters to. We see three main types of participants in the industry:

1. VCs. They need accurate data for their own fund-raising. They have to be able to benchmark their own funds relative to the broader market.
2. Entrepreneurs. Data on what funding deals are being made, and why, helps them figure out how much to raise, when, and from which VC.
3. The startup "community." This is a catch-all for everyone else, who tend to align to either VCs or entrepreneurs. Journalists, the non-aligned fourth estate, want reliable data to key off interesting stories.

Why does this matter? The startup community matters to the health of the overall economy. As the National Venture Capital Association (NVCA, the trade association of VCs) likes to point out:

"Originally, venture-backed companies have created companies that accounted for 10.4 million jobs and over $2.3 trillion in revenue (based on 2006 data)."

So a headline like "VC Investments Falling Off Cliff in the US" really impacts a lot of people. That is the kind of headline that most journalists/bloggers wrote in April 2009, based on data reported by those trusted sources.

We wrote a really boring headline:

"VC Investment in Internet Deals Did Not Fall Off a Cliff."

That's a lousy headline for generating page views. It's a story about "the dog that did not bark."

The point is that headlines drive business behavior to wild excesses on both the down-cycle bust and the up-cycle boom.

Just good reliable data would help.

Innovation Is Global, But It Keys Off US Data

At ReadWriteWeb, we love to track innovation from far-flung corners of the world, and we see the globalization of innovation as a critical trend.

So we want to be able to report on financing trends for early-stage Web technology startups across Europe and Asia, in addition to the US. And we expect any research process to be able to scale to that challenge.

But the reality today is that, globally, entrepreneurs and VCs key off US data. If they were to key off bad data, that would matter to everyone.

Why This Matters

Driving with one's eyes in the rear-view mirror is dangerous. We take action based on what authoritative sources tell us is happening today, and we base our assumptions on what that means will happen next and plan accordingly.

In reality, these sources tell us what has happened in the past, and they may not even tell us that accurately.

When we at ReadWriteWeb look at the macro picture, we favor a contrarian view simply because the reality we see today is often not what the headlines trumpet. When the markets were in the late stage of a boom, we were sounding the warning signals.

When the markets were melting, we began to see surprising signs of life in the early-stage Web technology world we live in.

Whether you are an entrepreneur or an investor, knowing what the crowd is thinking -- and what the headlines are trumpeting -- is valuable. Even more valuable are the underlying facts and trends that may be missing from those headlines. In the disconnect between the two often lies a lot of opportunity.

We hope to ignite a debate that leads to greater accuracy and transparency of these numbers.

Its two newest sites are focused on pets and celebrities.

GiantRedCarpet.com curates tweets from silver screen luminaries such as Ben Stiller, George Clooney, our own Wil Wheaton (he'll always belong to the geeks), and, obviously, the ubiquitous Ashton Kutcher. So you can follow him without, you know, following him. It also gathers updates from "gadfly" Perez Hilton, several athletes, director Kevin Smith, and a surprisingly diverse collection of musicians from Ashlee Simpson to Yoko Ono. I guess what they say is true: Everybody really is doing it.

ThePetFeed.com is simply freakin' strange. We've heard before about people who set up Twitter accounts for their animal companions. This site is their mothership, an aggregation of the passing thoughts of cats, dogs, birds, rodents, and one lonely capybara (go ahead, click the link, you know you have no idea what a capybara is).

After a long and thoughtful pause, all we can say is good on you, SawHorse.

Miro is the free, open source, cross-platform online video player that manages queued downloads much like TiVo for the Internet. And although the number of users has tripled to about 1.1 million uniques over the past three months with the release of Miro 2.0, the amount of funds available for nonprofits such as Miro has dramatically dropped. Insert yet another generalization about the crumbling economy here.

Founder Nicholas Reville said,"We're asking users to each support a little part of the program; hopefully, it will add up to our continuing to develop and grow."

Reville also noted that the idea of code adoption, although diminutively delightful, is based on the fundamental idea behind open source software. "The code isn't something that we or anyone owns. The idea of code adoption connects really well to our mission."

Participating users will receive an official adoption page, an image of their very own "line of code" that they can watch grow over the year, a blog or website widget, and credit for their contribution in every downloaded copy of Miro.

Users are encouraged to visit the Miro Adoption Center and adopt a line of code for $4 a month. It's definitely cuter than asking for microdonations; let's hope it's exponentially more effective.

In the announcement, Biz Stone says that Twitter is now in a position to "begin building revenue-generating products." Twitter also expects to grow its team in the next year.

Web vs. API

One interesting (though not unexpected) statistic in the funding announcement is that Twitter now gets almost twice as much traffic from its API than from the web. That number will surely drive how Twitter plans to monetize its service. If only a few people come to Twitter's web site, then just putting advertising on the site will not drive enough income to Twitter to keep the service afloat in the long run.

Twitter also announced that it grew 900% in the last year.

1. The average deal size is increasing. The average went from $2.12 million in November to $4.11 million in December to $6.06 million in January.
2. California still rules, but global investment is happening. In the US, venture capital is still dominated by Silicon Valley, but we are seeing a few more global deals, specifically in the UK, Canada, and English-speaking India.
3. Total diversity was apparent, without any market-segment bias. This is a good sign that ventures are being evaluated on the fundamentals rather than on what's hot.

Which Ventures Received Money?

December:

• NetShelter
• dotblu
• InnerRewards
• KZOInnovations
• smartfundit
• Appcelerator
• Wordstream

January:

• HubDub
• Sittercity
• Appnomic
• CloudSwitch
• GoInternetMedia

Which VCs Wired the Money?

December:

• Rho Canada
• GrowthWorks Canadian Fund
• JLA Ventures.
• DE Shaw, Maple Investments
• Valhalla Partners
• Baytech Venture Capital
• Storm Ventures
• Sigma Partners

January:

• Pentech Ventures
• Apex Venture Partners
• Norwest Venture Partners
• Atlas Ventures
• Matrix Partners
• Kennet Partners

How does a small startup secure capital in such turbulent economic times? Being profitable helps - something AboutUs achieved by mid-year 2008. The company is forecasting continued growth this year. CEO Ray King says the company is targeting $5 million in revenue for 2009. The primary source remains advertising, but the online marketing services AboutUs sells - including content creation and custom page development - continue to gain traction.

AboutUs dynamically creates pages from publicly accessible information on Web sites, like meta tags and whois information. Once built, the pages - like any wiki - are available to be edited by the company, users, or anyone who visits the site. AboutUs also offers monitoring services to facilitate "reputation management" - knowing who is saying what about you where. When a monitored page is edited, users are alerted to both the change and the user who made the edit. And given that it's a wiki page, they can choose how best to deal with the edit.

For more information on the company and its offerings, visit the AboutUs page on AboutUs.org.

However, we've also lowered our cut-off to $0.5 million. Tougher times lead to smaller rounds, which is not necessarily a bad thing because tough times force you to do more with less money. This got our list up to nine deals in total for November.

Below, we have linked each company's name to its entry in the Trade Vibes-powered ReadWriteWeb Company Index (or to the company site if there is no entry). You can use this as a starting point for research and comparison, referring to the venture's own site when needed.

• Machinima
• CarWhale
• Maxplore
• Open Candy
• Zuberance
• Carbon Flow
• Casual Collective

Note: a commenter pointed out that in our original A-Team post we missed Siri, which raised $8.5 million in October, although we have written about them before.

So please tell us who we missed in November. We will correct it in December.

Which VCs Are Wiring The Cash?

We identify only the lead VC in the following list (assuming that the first one listed in the PR material is the lead). We aim to make this more in-depth next month by showing all of the VCs that participated.

• Pond Venture Partners
• MK Capital
• Sierra Ventures
• Emergence Capital Partners
• Bessemer Venture Partners: check out its Anti-Portfolio.
• Clean Pacific Ventures
• Lightspeed Venture Partners: it has one of the best blogs in the venture business.

Emergence Capital Partners did two Series A deals in November (Maxplore and Zuberance). That is pretty cool.

If you want to talk to the firm, here are the basics:

Investment categories:

• Software-as-a-Service (SaaS)
• Consumer services
• Digital and social media
• Information services
• Business services
• Cloud computing

Investment criteria:

• Early and growth stage
• Compelling customer value proposition
• Market leadership potential
• Experienced and passionate management team
• $1 to $10 million initial investment
• US preferred

Emergence is riding the enterprise SaaS wave. Most VCs missed that wave, as we found when we surveyed gritty entrepreneurs. That sector was out of favor at the time, and most ventures simply did not get VC funding then.

Where Are Ventures Getting Funded?

It looks like California is still doing the dreaming, with six out of the eight ventures residing there. The other two are from outside the USA: one from England and the other from India.

Which Sectors Are Getting Funded?

The biggest theme was video, specifically games, but there were also two that had a green focus.

Here's hoping that December will be an even better month.

• A minimum of $1 million. We don't want $50,000 financing being called Series A. Sorry, no grade inflation here.
• Lead Institutional VC. There are plenty of other very good types of financing. We celebrate bootstrappers in our Gritty Entrepreneurs series. Angels are wonderful, and we all love friends and family. But this series is about the classic VC fund, the core of the start-up financing world. We only report the lead VC because that is what matters: with a good lead there is never a shortage of followers.
• Reported data. We need to see the dollar amount and the lead VC publicly reported. No "unreported sum" or "undisclosed investors." If you want to be stealthy, you don't need any visibility, which is fine.
• Web technology only. We are seeing a lot in alternative energy, biotech, and other sectors, which is all very interesting, but not what we do at ReadWriteWeb.
• Series A only. We recognize that getting Series B or C financing is important as well, but it is hard to see from public data whether these are really positive events or not. During a downturn, many of them, sadly, will be down rounds that protect VC capital but, because of onerous preference terms, often leave the entrepreneurs with very little. We don't want to celebrate something only to find it is viewed as negative by the participants. But everybody can celebrate a Series A: it speaks of optimism, new trends, and a go-for-it spirit.

The Heroes And their Partners

We believe that entrepreneurs are the heroes, but we also really want to celebrate their partners, the VC guys who have the guts to go against the trend and back them during tough times. All VCs talk the talk, which is that this is a great time for investing. We want to report on the ones who actually walk the walk as well. There is only one way to get into this list: close a Series A round and wire the money.

We want to use this to learn about changes in the VC business and so that entrepreneurs can see who is actually doing deals today.

Our A-Team Series Starts in October

October 2008 was a unique month for anybody in the business world. The word that kept dropping from the lips of even the most experienced been-there, done-that kind of person was "unprecedented." These are not normal times. And October was certainly not a normal month.

So, the October list was pretty short. We have heard plenty of stories from entrepreneurs about deals that were agreed on and in the final legal phase but that got pulled in September and October. We did not track September because the worst and final phase of the crash kicked in mid-September, and deals were still being done in the early days of September. So, October was the first full month of the new reality.

We count from the date when the deal was announced. But we recognize that the contract may have been signed some weeks before then.

Enough Preamble. What Deals Were Done?

Oops! Using our strict criteria, only one deal was done in October. We saw some that came close. We saw a seed round of $225,000 for a game company called Kirkland North from a venture fund called Harrison Meta Capital. We saw a Series B for $4.5 million coming from RRE Ventures to our good friends at Adaptive Blue. We saw an Israeli company called CogniSafe getting an undisclosed seed round from 21 VCs.

The one deal that squeaked into October was Zimbio with a $6.8 million Series A from DFJ and Menlo Ventures. The deal was announced on September 30th. So it is entirely possible (indeed probable) that this contract was signed before our official Meltdown Day. But the deal got done, and that is what matters.

Zimbio has very few facts on its "About Us" page. TradeVibes at least has a CEO listed; so we tracked down Anthony Mamone, and the data was sparse, not even a LinkedIn profile. All we found was a sketchy profile on Link Silicon Valley.

A Special Cheer for Syncplicity and True Ventures

The deal that kicked off the A-Team series and gave us the idea for it was the one with Syncplicity with its $2.35 million Series A funding from True Ventures. So we went to meet Leonard Chung, CEO, at True Venture's offices in San Francisco. True Venture's open-plan offices on Pier 38 do not look like classic VC, and that is probably the point. Phil Black of True Ventures made the point that ever-increasing fund sizes were taking VC away from its entrepreneurial start-up roots.

Then we noticed that our friends at GigaOm have their offices right next door. No coincidence as it happens, True Ventures was the lead investor in their Series A funding. So, True Ventures is a founding member of our A-Team. Take your best venture to them!

We have not had time to fully review Syncplicity yet. We promise to do so soon. So, in the meantime, we will fall back on the journalistic standby, quoting from its site:

"Everyday sync, backup, and sharing as simple as can be. The only all-in-one service that makes sure your files are everywhere you need them."

That is a crowded space. But so was search when Google entered the market. Getting an A round done in today's market makes one think they must have done something right, so we will check them out and urge you to do the same.

Good News from a November Sneak Peek

Here is the good news. Taking a sneak peek at November, around the middle of the month, we already see quite a few Series A deals that meet all of our criteria. We will tell all in our A-Team report in early December.

Who did we miss in October? (No spam please; look at the qualifying rules above.)

During these uncertain times for many Web companies, the investment marks a decided vote of confidence in LinkedIn's strategy. Perhaps more importantly, the admittedly "strategic" investment hints at some potential partnerships for LinkedIn in the coming months.

LinkedIn CEO, Dan Nye, highlights:

"This funding strengthens LinkedIn further, and will help us to continue creating additional services for professionals to connect and collaborate more effectively, around the world."

What sorts of "additional services" might those be? It wasn't long ago that LinkedIn announced a content partnership with The New York Times. It doesn't take a drastic leap of faith to imagine a similar partnership with McGraw-Hill's BusinessWeek.

SAP brings another potential partnership to the table. ReadWriteWeb's Bernard Lunn has hypothesized that "LinkedIn could replace Outlook and SalesForce." With SAP and its suite of business tools in the mix, that hypothesis could quickly become a reality.

But those are simply educated guesses. What's certain? LinkedIn is profitable, it has money in the bank, and it just convinced some additional heavyweights to invest in its vision. And that accomplishment - especially in light of the current financial atmosphere - is not to be taken lightly.

MyThings raised an $8 million Series A round in 2006 and has been growing steadily ever since, though according to Compete, this growth has stalled somewhat after the company saw its traffic go up considerably during the 2007 holiday season.

Relationships with Online Retailers

MyThings' strongest assets might be its relationships with a number of large online vendors, including Casio UK, Currys, Dell Canada, Tesco, TigerDirect, and Woolworths. Those retailers upload purchase information directly to MyThings and consumers can then access information about the product through MyThings' web site.

The service already has 1 million active users (though it is not clear how 'active' is defined here). MyThings is also very popular in the art market, where a large number of sellers and buyers use MyThings' 'Trace' due diligence service.

The company did not release any information about how it was going to use this new round of financing specifically. Chances are, however, that it will step up its marketing efforts during the upcoming holiday season. Hopefully, the company will also dedicate some of these resources to improving its back-end technology for parsing receipts.

Dopplr mostly courts frequent fliers and business travelers. Currently, it mostly functions as a way for this group to keep track of travel plans and arrange impromptu meetings. Overall, Dopplr's functionality is quite spartan, but thanks to its budding recommendation and review system, the site is slowly adding more proprietary content.

Dopplr was also one of the earliest backers of Yahoo's Fire Eagle location sharing platform, though the site doesn't seem to make heavy use of these features so far. The most interesting development for Dopplr in the last few months was the addtion of groups, which is a very useful feature for companies that have a lot of employees who travel frequently.

At the same time, though, other travel sites and social networks like PlanetEye, TripIt, or TravelMuse could easily replicate Dopplr's feature set while building on their already extensive backlog of original content.

Currently, Lijit displays Google AdSense ads in its search results, but its advertising network would allow publishers to sell their own search ad inventory. As many bloggers and publishers are looking for ways to monetize their blogs through services other than AdSense, chances are that there are quite a few people who would like to at least give Lijit's ad network a chance.