Milpitas, CA-based Phoenix Technologies (NASDAQ: PTEC), which makes PC systems software, announced today that it has signed an agreement to acquire Bellevue, WA-based General Software. Financial terms were not disclosed. The deal is intended to expand Phoenix’s presence across mobile and consumer electronics, communications systems such as network routers, and medical devices.

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Shares of GT Solar headed south after their debut this morning on the NASDAQ exchange (SOLR). Of course, making it to the public market at all is an accomplishment in this economic climate; the Merrimack, NH-based manufacturer of equipment for producing photovoltaic panels is the first venture- or PE-backed firm in the whole country to go public since the end of the first quarter.

The offering was bigger than what GT Solar had originally planned when it first filed for the deal back in April—the firm ultimately sold 30.3 million shares at $16.50 per share, for a total value just shy of $500 million, compared to the $200 million offering originally proposed. What’s more, the deal was oversubscribed. But shares fell this morning to as low as $14.11 and just after noon were trading around $15, down about 9 percent.

All of the proceeds of the offering will go to the selling stockholder, GT Solar Holdings, which will make a distribution to its shareholders. The holding company has also granted the underwriters an option to buy up to 4.5 million more GT Solar shares to cover any over-allotments.

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IRobot, (NASDAQ: IRBT) of Bedford, MA, announced today that the Army has ordered 220 of its PackBot 510 robots, worth a total of $17.5 million. The bots allow soldiers to detect and investigate explosive devices and other hazards while keeping a safe distance.

The new order is the fourth that the Army has made under the $286 million xBot contract, which iRobot won back in December in the midst of a high-profile legal battle with Illinois-based rival Robotic FX, to which the Army had initially awarded the contract. (IRobot would go on to win that fight just days later and to absorb some of Robotic FX’s assets as the settlement put that firm out of business.) Orders under the contract now total $44.5 million.

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Llew Keltner flies about 600,000 miles a year. The CEO of Light Sciences Oncology insists he can’t imagine doing his job any other way. There are doctors in about 30 countries testing his company’s experimental drug/device combo treatment in clinical trials of cancer patients. He meets the physicians in person, twice a year, to talk about the product and learn how it’s being used. Then there are always meetings to talk about it with investors and potential partners. He visits the company office only once or twice a quarter, he says.

“How could I go into those meetings with investors if I didn’t do that?” Keltner says. “It’s invaluable experience.”

Still, I was able to book an hour this week to meet the highly-mobile Keltner at his company’s Bellevue, WA headquarters, a week after he raised $40.1 million in venture capital. Most of what’s been written about the company has focused on the “it-failed-to-go-public” angle, yet it turns out Light Sciences Oncology has a much more important news event coming up. After 13 years in business, it will find out in a few months whether the company’s light-infusion technique can actually help cancer patients live longer.

It’s been a long time coming for a company supported for years by Craig Watjen, the treasurer from the early days of Microsoft, and more recently, an array of venture capital firms that includes Essex Woodlands Health Ventures, Johnson & Johnson Development Corporation and Novo A/S. The market they are pursuing initially, liver cancer, affects an estimated 19,000 people in the U.S. each year, although the technology could be able to be applied to many more tumor types than that, Keltner says.

To understand why, some background is required. The company’s product, called LitX, is attempting to become the first treatment of its kind. The system works by using a light-emitting diode, guided by a biopsy needle, which doctors can thread inside a solid tumor with the help of an ultrasound or CT imaging machine. The patient is then injected with an inactive chemical drug called talporfin sodium. Once the light is turned on, powered by cheap AAA batteries, it activates the drug to kill tumors within a limited wavelength, sparing nearby healthy tissue. The light stays on for almost three hours while the patient can watches TV or reads a magazine, and then goes home.

The company has passed some early clinical trials that show tumor shrinkage, yet has said little about it, Keltner says, because he doesn’t want to raise false hope among patients about a treatment that’s not yet available. Now, he feels he can “loosen up a bit,” because LitX has advanced to the final proving ground, a Phase III trial of liver cancer, which could provide evidence needed to bring the product to market.

The company began recruiting 200 patients for the test of LitX against liver cancer in November 2006. It chose that disease because …Next Page »

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Nobody’s going public these days, but the acquisitions market is certainly heating up. A day after Boeing announced its purchase of Bingen, WA-based Insitu, Cisco (NASDAQ: CSCO) is getting into the act. The San Jose, CA-based networking giant announced it is buying Pure Networks, a privately held company based in Seattle. The deal is worth some $120 million (for all shares of Pure Networks) and is expected to be completed in the first quarter of fiscal year 2009.

Pure Networks makes software and tools for managing home networks, such as diagnostics for why your wireless Internet connection is running slow. It currently partners with Linksys, which was bought in 2003 by Cisco for $500 million, to help consumers set up and secure their home Internet and various networked devices more easily. The company’s “innovations will provide Cisco and Linksys with a key underpinning to take home networking to the next level of ease of use,” said Ned Hooper, senior vice president for Cisco’s corporate development and consumer group, in a statement.

The employees of Pure Networks will stay in Seattle and be integrated into the Linksys team, according to the statement. As Xconomist and Clarion Group partner Eddie Pasatiempo pointed out last week, that stage—deal integration—is the real test of any acquisition’s success.

And speaking of home networks, the cable to my building has been down all morning. Heard that, Comcast?

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Lots of news from the bigger players (think Genzyme and Biogen Idec) in the Boston-area life sciences arena last week, plus a peep here and there from the startups.

—Alnylam Pharmaceuticals (NASDAQ: ALNY), a developer of RNAi-based drugs in Cambridge, MA, extended its collaboration with pharma giant Novartis (NYSE: NVS) through October 2009; the deal is worth up to $700 million for Alnylam.

—Allied Minds, a Boston-based investment firm that backs very young companies spun out of academic institutions, helped found a University of Colorado spinoff called Precision Biopsy; the startup is developing “optical” biopsy needles for prostate cancer diagnosis.

—Cambridge, MA-based Genzyme (NASDAQ: GENZ) inked a deal worth up to $437 million in upfront and milestone payments to co-develop and co-market a drug from South Plainfield, NJ-based PTC Therapeutics. The drug is already being tested as a treatment for Duchenne Muscular Dystrophy, and could theoretically be useful against a host of other genetic diseases.

—And speaking of Genzyme, Luke profiled the company’s efforts to capture a big piece of the market for multiple sclerosis drugs—a market that fellow Cambridge firm Biogen Idec (NASDAQ: BIIB) currently leads.

—Speaking of Biogen’s multiple sclerosis drugs, the company and its partner, Ireland’s Elan, reported that their MS drug Tysabri is being taken by more than 31,800 patients worldwide—and and that they haven’t detected any new cases of PML among the drug’s users. Tysabri was temporarily pulled from the U.S. market several years ago after a few patients on the drug came down with the rare brain infection.

—Speaking of Biogen one more time, a company spokesperson reassured us that if Swiss pharma giant Roche succeeds in its unsolicited bid to acquire South San Francisco-based Genentech (NYSE: DNA) it will not rock the boat for Rituxan, a lymphoma drugs that Biogen currently co-markets in the U.S. with Genentech; Roche, which already markets the drug overseas, will simply become Biogen’s new partner.

—Having abandoned plans to go public back in January, Waltham, MA-based molecular diagnostics firm BG Medicine raised $40 million in a Series D financing. New investors Legg Mason Capital Management, GE Asset Management, and SMALLCAP World Fund joined existing investors Flagship Ventures, Gilde Healthcare Partners, Humana, and Stelios Papadopoulos in the deal.

—Luke had an interesting talk with Tod Woolf, the CEO of Worcester, MA-based RXi Pharmaceuticals (NASDAQ: RXII), which is seeking to turn RNAi science from the likes of Nobel Prize winner Craig Mello and others into treatments for a host of diseases. Luke looked at the unusual path RXi took to the NASDAQ exchange and the firm’s plans for funding its research while the market is down.

—Luke also had an interesting talk with the CEO of Lexington, MA-based Epix Pharmaceuticals (NASDAQ: EPIX). Michael Kauffman gave a preview of data that Epix plans to present at a big Alzheimer’s disease conference in a few days showing that its experimental treatment for the ailment is promising—though not quite as promising as a number-crunching error last year originally led observers to believe.

—Medical needle maker Needletech Products of Attleboro, MA, said it will be acquired for $47.8 million by Buford, GA-based medical device maker Theragenics (NYSE: TGX).

—Cambridge, MA-based Peptimmune completed a second close of its Series D financing worth $8.9 million and plans to use the money to further development of its treatment for multiple sclerosis. The round was led by New Enterprise Associates, MPM Capital, Hunt Ventures, Boston Medical Investors, and Silicon Valley Bank Capital.

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Bill Bryant is one of the best-known venture capitalists on the local scene. As a tech entrepreneur and angel investor, he’s been involved with startups in the Seattle area for 20 years. In the early 1990s, he was the founding vice president of sales and marketing for Visio, now part of Microsoft. Last October, he joined Draper Fisher Jurvetson as the venture firm’s only partner outside of its Menlo Park, CA headquarters.

Bryant led a discussion last night at StartPad, a Seattle-based organization of software developers, on “Venture capital unplugged: the good, the bad, and the ugly.” I had to miss it, because I was at the ballpark watching the Mariners take on my hometown team, the Boston Red Sox. (Bryant: “If I had tickets to see the Red Sox, I’d probably pull a no-show.”) So I caught up with Bryant earlier in the day to get a few insights into the innovation community and the investment climate.

—On why Draper Fisher Jurvetson tapped him here: “They realized they were underrepresented in Seattle [deals]. The goal is to change that.”

—On the economic climate: “The natural reaction is to pull in your heels and focus on existing investments. Things have definitely slowed down… but entrepreneurs are still moving forward. They don’t just start companies when times are good, they start them when they have to start them. So the bar gets higher, and entrepreneurs have to work a lot harder. You really have to want it.”

—On what’s hot: “I focus on individuals and people. I’ve met with easily over a thousand entrepreneurs, so I have an idea of who tends to succeed and who doesn’t. I don’t pay attention to what’s hot. When an investor tells you something is hot, they’re a year behind—they’re reacting to what’s already out there. Entrepreneurs focus on what doesn’t exist today.”

—On why Google (NASDAQ: GOOG) should look out: Bryant is sticking to his prediction, given to the Seattle P-I in January, that the search giant’s stock will decline by some 30 percent this year. Why? Shrinking online advertising budgets and stronger competition. “WidgetBucks is eating away at its share,” he says. I took this to mean that Google needs to innovate to keep its competitive advantage in search and advertising, against startups like Seattle-based WidgetBucks, an online ad network funded in part by Draper Fisher Jurvetson.

—On local software developers choosing between working for startups or a big company like Google: “If they’re interviewing with both a four-person company and Google, they’re confused. At a big company, if you make a small feature change, it impacts many, many people. But it’s very different from someone in a startup who really makes a difference each and every day. The makeup, values, and skills are really not the same for people who succeed in startups [versus big companies].”

—On investing versus being an entrepreneur: “I’m still hoping a bolt of lightning will strike, and I’ll be involved in a brilliant startup idea. In the meantime I’m happy to support other people’s projects.”

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Seattle-based thePlatform announced that it will manage and publish video content and advertising for Time Warner Cable’s Road Runner website, which offers programming from HBO, CNN, and other sources. Time Warner Cable, the second-largest cable operator in the U.S., also gets access to thePlatform’s media player tools. A subsidiary of Comcast, thePlatform handles the logistics of online video publishing, as we described last week.

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Geospiza, the Seattle-based maker of software to support biological research, said today the University of Florida’s Interdisciplinary Center for Biotechnology Research has bought GeoSpiza’s FinchLab to help sort through data from next-generation gene sequencing tools. The university is a longtime customer, and first started using Geospiza’s products eight years ago. The privately-held company has been on a bit of a roll lately, including signing a partnership with San Diego-based Illumina (NASDAQ: ILMN) that will expose more customers to its software.

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Tom Ranken is the first to admit he can get a bit ornery on the subject of venture capital in the Northwest. “It used to make me foam at the mouth when VCs would say there’s plenty of money out there and all the good ideas get funded,” he says.

But now Ranken, the former CEO of the bioinformatics company VizX Labs, thinks the VCs may be at least partly right. He has had the change of heart after doing a research project this spring that dug into why the Northwest doesn’t create more biotech startups. He and Jim Severson, the former vice provost of technology transfer at the University of Washington, identified all 21 life sciences startups formed in the state from 2006 through 2007, and interviewed CEOs at 11 of them about what the region needs to provide more fertile grounds for new companies. (Click here for the full WBBA report)

It’s hard to find good comparisons on startup creation by region, Ranken says, but one study has suggested that a startup is formed for every $65 million in sponsored research. By that rule of thumb, the region should have produced three times as many startups, he says.

The study, paid for by the Washington Biotechnology and Biomedical Association and the City of Seattle, debunked several popular perceptions about the drought, Ranken says. It found there isn’t a shortage of management talent, and the region is actually exporting some of its talent. Venture capital is nearly impossible to get for small companies that aren’t likely to go public, yet it can be scored for companies with big ideas that could someday generate more than $100 million to $200 million a year in revenue. Technology transfer isn’t as big of a road block as it once was to commercializing ideas from the University of Washington. But one real issue at the region’s anchor university is an academic culture that frowns on entrepreneurial efforts, Ranken and Severson found.

“The academic culture here seems to be that once the knowledge is published, it’s done,” Ranken says.

Here’s a sampling of recommendations from the report:

—Perform more research to understand what Ranken and Severson dubbed “Good Life Science Businesses.” These are the firms that do the industry’s grunt work—managing clinical trials, contract manufacturing, and running toxicology tests. These companies collect steady fees and fulfill key functions in the local biotech machine, but get little recognition because they will never become the next biotech to change medical practice, like Amgen (NASDAQ: AMGN) or Genentech (NYSE: DNA). “The Good Life Sciences Businesses are seen as the Ma and Pa grocery stores, when Ma and Pa come in to the store, do a little work and go home,” says Ranken, who calls that perception “garbage.” Examples of low-profile, yet important, companies are Quintiles, a contract research organization based in Research Triangle Park, NC, and Axio Research, a small contract research organization in Seattle, he says.

—Round up some of those former Immunoids and Icosians who scattered after corporate takeovers and re-connect them in a life sciences angel network for companies that don’t qualify for venture funding. “Local angel networks have little life sciences expertise and angel capital is nearly impossible to identify and access in Washington,” according to the report.

—Copy the model of Accelerator, the startup incubator affiliated with top venture firms and Leroy Hood’s Institute for Systems Biology, and apply it to medical devices, diagnostics, and (here we go again) the so-called Good Life Sciences Businesses.

—The WBBA needs to redesign its networking events that connect entrepreneurs to other entrepreneurs, or hook up inventors with entrepreneurs. “These activities probably will require many different foci, venues, times, etc. to remain fresh and vital,” according to the report.

The report has made an impression on the WBBA, says Jack Faris, the trade group’s president, who sat in on some of the interviews and heard some feedback first-hand. “We want to pursue most if not all of the recommendations,” he says.

One recommendation that’s dead on arrival? Amending the state’s Constitution to allow direct state aid to startup businesses. Some executives would like to see that happen in order allow the state to do something aggressive on a global scale, like Massachusetts Gov. Deval Patrick’s initiative to put $1 billion into supporting life sciences over the next 10 years.

“Here it would take a two-thirds vote of the legislature and a vote of the people,” Ranken says. “It’s politically impossible.”

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Big biotech news came yesterday from Basel, Switzerland, where pharmaceutical giant Roche announced an unsolicited $43.7 billion bid to buy the rest of South San Francisco-based Genentech (NYSE: DNA) that it doesn’t already own. The news has a ripple effect in Massachusetts for smaller biotechs that have partnerships with Genentech, the industry’s pioneering company. That includes Cambridge, MA-based Biogen Idec, (NASDAQ: BIIB) which co-markets the lymphoma drug Rituxan with Genentech in the U.S.

If Roche succeeds in acquiring all of Genentech, then Biogen will simply get a new partner for co-marketing Rituxan in U.S., says company spokeswoman Naomi Aoki. The drug generated $2.3 billion in U.S. sales last year, with Biogen keeping about 40 percent of revenues. Roche markets the product overseas, under the brand name MabThera, and pays Biogen a “low double digit” percentage royalty on sales in those territories, Aoki says.

“We already work closely with Roche on clinical trials, and data rollouts,” Aoki says. “We have a very productive relationship with them. We don’t anticipate any problems.”

Biogen doesn’t have what’s called a “change of control” right that could throw a wrench in to the deal. Genentech has such a right with regard to Biogen, as you may recall from that company’s proxy fight with Carl Icahn. What it means is that if Biogen is taken over by someone else, Genentech has the right to set a price on the product and the acquirer then would have to decide to buy out Genentech’s ownership stake in the product or sell its ownership split to Genentech, Aoki says. Irish drugmaker Elan, Biogen’s partner on marketing the multiple sclerosis drug Tysabri, has a similar buyout right if Biogen gets bought, although a third-party would have to set the value of Tysabri, and Elan has the right to decide whether to buy or sell, Aoki says.

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Accretive Exit Capital, which helps venture capital and buyout firms by buying their stakes in companies they’re tired of managing or that they’re eager to monetize, said today that it has closed its first fund, totaling $125 million. The firm, based in Boston and West Palm Beach, FL, says that the fund, put together in just 45 days, is the largest first-time fund ever raised in the so-called “secondary private equity” market.

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Fresh out of ideas for your next technology startup? No worries—investor/programmer/Web guru Paul Graham, founder of the Cambridge, MA, and Mountain View, CA-based Y Combinator startup incubator, published a handy list this weekend of 30 niches waiting to be filled by clever entrepreneurs.

Graham says he published the list because the ideas represent the kind of proposals Y Combinator is hoping to see when groups apply for the program (which pays startup founders’ living expenses while they spend three months solidifying their business ideas). That’s not to say that Y Combinator is only looking for startups in these areas—just that “we really want people to work on them,” in Graham’s words. And truly clever software engineers and marketers, he acknowledges, will take the ideas “in directions we didn’t anticipate.”

A few of the ideas that sound especially sensible and worthwhile to me:

#3 “New news.” Newspapers and magazines are dying. Blogs like PerezHilton, TechCrunch, and (we hope) Xconomy are pointing the way toward something new. “But these are just the beginning,” Graham argues.

#7 “Something your company needs that doesn’t exist.” This is just good advice in general, and embodies Y Combinator’s ruling philosophy: make things people want. If you frequently curse the lack of some item of software or hardware that would make your own life easier—a machine that would clean out the company refrigerator so that it doesn’t start to smell like a biology lab, perhaps?—it’s probably a good idea for a product.

#9 “Photo/video sharing services.” Flickr is great, Photobucket is great, but there are so many more cool things that we could be doing with our online media.

#16 “A form of search that depends on design.” Apple gets its chocolate into Google’s peanut butter. Enough said.

#21 “Finance software for individuals and small businesses.” Graham is absolutely right when he says “Intuit seems ripe for picking off”—Quicken is feeling ancient and creaky. But hurry, because companies like Geezeo are already working on this one.

#23 “More open alternatives to Wikipedia.” Graham perfectly summarizes why I use Wikipedia a lot, but would never think of trying to contribute to it: because “Deletionists rule.” Graham thinks that’s because the clique of Wikipedia editors is “constrained by print-era thinking.” I think it’s because they’re a clique. There’s lots of room for a truly open, collective, yet authoritative effort to document the world around us. I’m not sure this is a business, exactly, but it would sure be worthwhile.

#28 “Fixing email overload.” I’d kill for this one. But as Graham notes, “the best solution may not be anything as obvious as a new mail reader.” Maybe it’s a technology that would siphon away much of the non-urgent stuff we receive every day into other kinds of receptacles, where we could check it at our leisure.

Graham’s list stopped at 30. But we’ll toss in one more idea for good measure:

#31 Better, easier, more specialized online backup. Companies like Mozy and Carbonite offer pretty good catch-all services for backing up your hard drive to the cloud. But the interfaces are still kind of clunky—they aren’t drop-dead simple, the way they need to be to encourage mass-market adoption. And what if you just want to back up your photos or videos? There must be lots of niche online storage applications waiting to be explored.

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Pacific Northwest venture deals are making a comeback of sorts. Second-quarter investment numbers for Washington are up compared with the same period last year, according to data released over the weekend by Dow Jones VentureSource.

In the second quarter of 2008, there were 25 venture deals in Washington worth a total of $302 million—an 8.7 percent increase over the $278 million invested in the second quarter of 2007. This bucks the national trend in which many regions, such as the San Francisco Bay Area and New England, reported substantial declines compared with the same period last year.

The second-quarter tally in Washington was also a 39 percent increase over the $217 million invested in the first quarter of this year. However, the current pace of 50 deals (worth some $519 million) done through the first half of the year still lags 2007’s year-end total of 114 deals worth $1.3 billion.

Investments in biotechnology, medical devices, software, and Internet led the way, with Bellevue, WA-based Light Sciences Oncology raking in $40.1 million for the top spot (the deal closed on June 30). Also making a splash was Wetpaint, a consumer-Wiki website based in Seattle that raised $25 million, and ReliOn, a fuel-cell energy company based in Spokane, WA, which raised $23 million—the latter reflecting a national trend of increased investment in energy and utilities.

Here’s a roundup of the top 10 Pacific Northwest VC deals in 2Q08, along with the investors:

1. Light Sciences Oncology (Bellevue, WA)—$40.1million
Investors: undisclosed

2. Wetpaint (Seattle, WA)—$25.0 million
Investors: Accel Partners, Duff Ackerman & Goodrich, Fidelity Ventures, Frazier Technology Ventures, Trinity Ventures

3. ReliOn (Spokane, WA)—$23.0 million
Investors: Buerk Dale Victor, Chrysalix Energy Management, Enterprise Partners Venture Capital, Oak Investment Partners, PCG Asset Management, Robeco Group

4. Talyst (Bellevue, WA)—$20.0 million
Investors: AIG Global Investments, Ignition Partners, OVP Venture Partners

5. Immune Design (Seattle, WA)—$18 million
Investors: Alta Partners, Column Group, Versant Ventures

6. Pelago (Seattle, WA)—$15.0 million
Investors: Kleiner Perkins Caufield & Byers, Reliance Technology Ventures, Trilogy Equity Partners, T-Venture Holding

7. VLST (Seattle, WA)—$15.0 million
Investors: Amgen Ventures, Arch Venture Partners, MedImmune, MPM Capital, OVP Venture Partners

8. NexPlanar, formerly Neopad (Hillsboro, OR)—$14.5 million
Investors: BlueRun Ventures, Intel Capital, InterWest Partners

9. Fate Therapeutics (Seattle, WA)—$12.9 million
Investors: Arch Venture Partners, OVP Venture Partners, Polaris Venture Partners, Venrock

10. Verdiem (Seattle, WA)—$12.0 million
Investors: Catamount Ventures, Falcon Technology Partners, Kleiner Perkins Caufield & Byers, Phoenix Partners, Westly Group

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Second-quarter venture activity in the New England region recovered somewhat after a tepid first quarter—but was still down significantly compared to the same period a year ago, according to data released over the weekend by Dow Jones VentureSource.

Private equity investments by New England venture firms totaled $714 million for the quarter, a 16 percent increase over the first quarter’s disappointing $615 million (the poorest performance since mid-2005). But, reflecting the national trend, New England startups collected quite a bit less (23 percent) in the second quarter of 2008 than they did in the second quarter of 2007.

The declines weren’t uniform across all industries, however. Healthcare helped to drag down the statistics the most, with 21 deals worth a total of $299 million in 2Q08, compared to 38 deals worth $408 million in 2Q07. Information technology fared just as poorly, with 34 deals in the quarter worth $226 million, compared to 58 deals worth $423 million in 2Q07. But energy and utility startups were hot—they attracted 6 funding rounds worth $28 million in the second quarter this year, compared to exactly zero a year ago. Startups offering business and financial services and industrial goods and materials also saw increased venture interest.

Interestingly, the region’s biggest venture rounds for the second quarter tended to be significantly larger than the first quarter’s leading rounds. While only four of the top ten financing rounds in 1Q08 broke the $20 million mark (Mascoma, Reveal Imaging Technologies, Virtual Iron, and Vlingo), all of the top 10 deals in the second quarter were for $25 million or more. Here’s a list:

While anyone who follows the news about venture-backed startups in New England will see some familiar names coming up again and again, the VentureSource data indicate that New England companies actually have connections with a large number of venture firms nationwide, and don’t seem to depend too heavily on a small cluster of firms, as startups in some other regions do. The eight firms most active in the region, listed below, were involved in only 27 of the region’s 76 funding rounds (not accounting for overlaps).

Most Active Venture Capital Firms Investing in New England, 2Q08

Dow Jones VentureSource rival PricewaterhouseCoopers MoneyTree also released a quarterly summary of venture activity over the weekend, using data provided by Thomson Reuters. The numbers in the two reports don’t match up precisely; for the New England region, the quarter-to-quarter shifts evident in the MoneyTree data are less dramatic than those in the VentureSource data. But the trend lines are the same. According to the MoneyTree report, New England firms raised $822.9 million in venture capital funding in the second quarter, up 5.5 percent from the first-quarter total of $779.9 million, but down 6.1 percent from 2Q07’s strong $875.9 million total.

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Reflecting the general economic slowdown, venture investment in U.S. companies decreased moderately in the second quarter of 2008, according to reports released over the weekend by Dow Jones VentureSource, a unit of the financial news giant’s enterprise media group, and by the MoneyTree division of PricewaterhouseCoopers. Total funds shelled out by venture firms in the quarter amounted to $6.64 billion, down 8 percent from the first quarter’s $7.21 billion, and down 12 percent compared to the $7.58 billion that venture-backed companies raised in the second quarter of 2007, according to VentureSource.

But given the fact that 2Q07 was the second-biggest quarter ever recorded for venture investment—and that so many other economic indicators have turned south more severely—this quarter’s totals don’t look so bad.

“While the U.S. investment total is down compared to last year’s impressive second quarter, we still saw steady deal activity and investment in the first half of the year, which is encouraging,” said Dow Jones VentureSource’s director of global research, Jessica Canning, in a statement. Venture capitalists are “focusing on what’s next,” she added, “and that’s reflected in the healthy early stage investment we’re seeing in areas like renewable energy, information services and business support services.”

In fact, energy and utilities startups raised a record $817 million in the second quarter, a 160 percent increase over the 2Q07 figure of $314 million. The three biggest venture rounds of the quarter all went to solar energy companies: Beltsville, MD’s SunEdison ($131 million), Pasadena, CA’s eSolar ($130 million), and Oakland, CA’s BrightSource Energy ($115 million).

Venture investments in information technology companies, by contrast, dropped 26 percent from year-ago levels, from $3.50 billion in 2Q07 to $2.60 billion this quarter—the lowest quarterly total since 2003. Healthcare and life-sciences companies fared almost as badly, with investment declining from $2.53 billion in 2Q07 to $1.98 billion this quarter, a 22 percent drop.

In what may be a reaction to the shortage of exit events for startups—the number of IPOs among venture backed companies declined to zero in the second quarter, as we reported a couple of weeks ago—venture firms seem to be putting more of their money toward later-stage companies that may produce faster payoffs for investors. Some 54 percent of the quarter’s total investments were part of Series B or subsequent rounds.

VentureSource also offered a breakdown of the venture investment data by region. The moderate decline in investment was seen in every major region except the two Washingtons: the Washington, D.C. area actually saw an 11 percent uptick in venture activity, to $268 million, while Washington state recorded a 4 percent increase, to $275 million. San Francisco Bay Area companies, as always, attracted the most venture money overall ($2.17 billion), with Southern California in second place ($868 million) and New England in third ($714 million). We’ll publish separate articles shortly detailing second-quarter venture investment in the Boston and Seattle areas.

“The most encouraging part of this quarter’s report is that early stage investing is holding relatively steady thus far in 2008,” Canning summed up. “It may be harder for entrepreneurial companies to raise venture capital these days but it’s by no means impossible.  Continued early stage deal flow is a good sign that the venture industry is prepared to weather the economic downturn and will continue to back the next wave of disruptive technologies.”

The MoneyTree report, issued by PricewaterhouseCoopers and the National Venture Capital Association using data from Thomson Reuters, reached similar findings, though its numbers varied in minor ways. For example, going by Thomson Reuters’ definition of energy/cleantech firms, the amount of capital raised by that sector was $884 million (VentureSource pegged it at $817 million), up slightly from the first quarter’s $871 million. The MoneyTree report’s overall totals were also somewhat higher than VentureSource’s: VC firms invested $7.4 billion in 990 deals in 2Q08, according to the MoneyTree report, which is almost a billion dollars more than the the figure reported by VentureSource.

But the trend line was the same: VC investments in the second quarter were essentially flat. “Despite the turmoil in the markets, the pace of investing in the first half of 2008 indicates that venture investing is on target to reach the $30 billion level this year, putting it on par with 2007 when $30.7 billion was invested,” Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers, said in a release accompanying the MoneyTree report. “VCs are continuing to find and fund new deals, and the increase in Later stage investments demonstrates that VCs are committed to funding their portfolio companies until the public markets open up or opportunities for M&A present themselves, allowing them to achieve liquidity.”

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I’m running out of “green” jokes to use in headlines describing the steady march of cash toward Evergreen Solar’s coffers. The latest example of that, plus a surprising number and variety of venture financings and other deals for one summer week, below.

—Evergreen Solar (NASDAQ: ESLR) announced yet another large, long-term order for the photovoltaic solar panels it manufactures. This one—worth $1.2 billion—brings the Marlborough, MA-based firm’s total contractual backlog to nearly $3 billion.

—Burlington, MA-based NeoSaej, whose MoneyAisle.com site lets lenders compete for banking customers, completed a new round of financing worth over $7 million. The new funding brings its total financing to more than $10.5 million. Boston-based Wellington Management led the deal, which was joined by Stata Venture Partners II and NeoNet.

—MIT spinoff ThingMagic of Cambridge, MA, raised $9.5 million in a Series B funding round that included Tudor Ventures, The Exxel Group, Morningside Technology Ventures, and .406 Ventures. ThingMagic makes hardware and software for reading RFID (radio frequency identification) tags.

—Dicerna Pharmaceuticals, a Cambridge, MA-based developer of RNAi-based drugs, raised $8.4 million more, bringing its first-round venture financing to a total of $21.4 million. New investor Abingworth and existing investors Oxford Bioscience Partners and Skyline Ventures participated in the financing.

—Collegium Pharmaceutical, a specialty drugmaker in Cumberland, RI, closed a fourth round of venture financing worth $20 million. Seattle-based Frazier Healthcare Ventures led the deal and existing inventors Boston Millennia Partners and Westfield Capital Management participated as well.

—Alnylam Pharmaceuticals (NASDAQ: ALNY) of Cambridge, MA, and Swiss pharma giant Novartis (NYSE: NVS) extended their RNAi collaboration—worth up to $700 million to Alnylam—through October 2009.

—Wakonda Technologies, a Rochester Institute of Technology spinoff that’s moving from New York state to Medford, MA, announced it has raised $9.5 million in a Series A venture round from the likes of Advanced Technology Ventures, General Catalyst Partners, Polaris Venture Partners, the Massachusetts Green Energy Fund, and Applied Ventures. Wakonda is developing cheaper, more efficient photovoltaic cells.

—Bluefin Robotics of Cambridge, MA, inked a deal to provide its Spray Glider autonomous underwater vehicles (AUVs) to Horizon Marine of Marion, MA; the agreement, as well as a pending Navy contract for glider-type AUVs, signals the growing competition between Bluefin, Bedford, MA’s iRobot (NASDAQ: IRBT, and Falmouth, MA-based Webb Research—now part of Teledyne Technologies (NYSE: TDY)—in the AUV space.

—Cambridge, MA-based Genzyme (NASDAQ: GENZ) forged an alliance with South Plainfield, NJ-based PTC Therapeutics. Genzyme will pay $100 million in up front and as much as $337 million more in milestone payments for the right to co-develop and co-market a PTC drug being developed as a treatment for Duchenne Muscular Dystrophy and, potentially, a host of other genetic diseases.

—Molecular diagnostics firm BG Medicine of Waltham, MA, raised $40 million in a Series D financing round. New investors Legg Mason Capital Management, GE Asset Management, and SMALLCAP World Fund joined the round, as did existing investors Flagship Ventures, Gilde Healthcare Partners, Humana, and Stelios Papadopoulos.

—Bermuda-based Tyco International acquired Cambridge, MA-based Intellivid—a maker of software for analyzing security-camera video—for an undisclosed sum.

—Peptimmune, a Cambridge, MA-based developer of treatments for autoimmune diseases, raised $8.9 million in a second close of its Series D financing. The deal was led by New Enterprise Associates, MPM Capital, Hunt Ventures, Boston Medical Investors, and Silicon Valley Bank Capital.

—ConnectEDU of Boston, MA acquired Chicago’s PrepHeadquarters for an undisclosed sum. Both firms offer online tools for high school students and their parents and counselors.

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Attleboro, MA-based Needletech Products, which manufactures needles used for range of medical procedures such as core biopsies, aspiration biopsies, and spinal anesthesia, has agreed to be purchased by Buford, GA-based medical device maker Theragenics (NYSE: TGX) for $47.8 million in cash, Theragenics reported this week. The deal is expected to close in the third quarter of this year.

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Boston-based ConnectEDU, which provides online tools to help high school students, parents, and counselors manage the college admissions process, announced yesterday that it has acquired competitor PrepHeadquarters, a Chicago-based startup whose online services help counselors communicate with students and parents and track student progress. The terms of the acquisition, which will extend ConnectEDU’s network to more than 2,000 high schools, were not disclosed.

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Everyone knows that Internet video is taking off. With the popularity of YouTube, online TV shows, and other video sites, the market seems to be ready. But now there are plenty of new problems to be solved on the technology and business side, from content delivery and coding to search and advertising. And the companies that position themselves with the most attractive solutions will be all set to cash in.

Elemental Technologies may be one of them. Today the Portland, OR-based video software company announced it has raised $7.1 million in Series A funding. The round was co-led by Cambridge, MA-based General Catalyst Partners, which does a lot of work with Internet video entrepreneurs, and Seattle-based Voyager Capital, one of the premier venture companies in the Northwest. The funds will be used to strengthen Elemental’s existing product lines, as well as to “attack new Internet and [Internet Protocol TV] video processing markets,” said CEO Sam Blackman in a statement.

Spun out in 2006 from Pixelworks, a consumer-tech and display company in Portland, Elemental now focuses on the problem of video conversion. For instance, DVD video is in a different format from what runs on the Internet or on mobile devices. So if you want to take TV shows or home movies from your digital video recorder and play them on your iPod during your commute, you need to convert them first. Elemental’s software, called Badaboom Media Converter, does this more quickly and painlessly than was possible before. “It’s about simplicity and ease of use,” says Mike Callahan, the company’s senior technical marketing manager. “We set it up so your grandmother can use it.”

Elemental’s software makes use of the graphics processing unit (GPU) found in most computers and in an increasing number of mobile devices these days. These graphics chips, which range in price from $100 to $500, are much more suited for video processing than conventional microprocessors because they run many more operations (such as converting frames in a video) in parallel. So, using the company’s software, you can convert a two-hour movie from the MPEG-2 format of a DVD, say, to a file that plays on your iPod, all in 20 to 30 minutes instead of several hours—a factor of four to 10 times as much data crunching in a given time, says Callahan.

The payoff is not only on the consumer side, but also in the enterprise and corporate market. Elemental Technologies partners with businesses to make their digital media operations more efficient—for example, a company that builds Web conferencing tools might use Elemental’s software to make sending video data cheaper, and to reduce the number of servers it needs. And big play