Venture capital investments got off to a strong start this year, according to a MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Financial. The first quarter of 2006 matched the dollar amount of last year’s fourth quarter at $5.6 billion in 761 deals, demonstrating a 12 percent increase from the first quarter of 2005.

Software investments captured the most investment deals and dollars receiving 22 percent of the total dollars invested and 26 percent of all investment deals.

The Media and Entertainment Industry got the biggest boost, reaching its highest investment level since the third quarter of 2001. Their investments increased by 80 percent with a total of $396 million spread across 57 deals. Large deals and an increased focus on transmitting media via the Internet accounted for the increased level of investments in this sector.

The first quarter was not as promising for the Biotechnology, which experienced a 24 percent decrease with investments totaling $808 million. Decreased investment levels in the first quarter, however, are typical for this sector.

“As far as investment equilibrium, it doesn’t get much more stable than this,” said Mark Heesen, president of the National Venture Capital Association, in a press release. “In the last 16 quarters, venture capitalists have consistently placed $4 to $6 billion into a diverse set of emerging growth companies with no single sector experiencing major surges or major draughts. We are experiencing the regular ebb and flow of venture investing and we are truly at our healthiest and most sound investment point since the mid 1990s. That said, we will need to see improvements in the IPO markets and better evidence of early stage investing momentum in future quarters if we expect to sustain this reasonable pace.”