• VentureBeat, Friday, April 22, 2011 11:40 AM

Paving the way for more innovation (and competition), investment in U.S. venture-backed companies rose 35% in the first quarter, reports VentureBeat, citing a new report from Dow Jones VentureSource. During the quarter, venture firms invested $6.4 billion into 661 domestic deals. "The increased activity is consistent with the buzz in the tech industry about an overall recovery, an increase in optimism, and a faster pace for innovation among startups," according to VentureBeat.

Yet, there is "considerable discussion about whether we're seeing a bubble in tech investing, with a major story on the topic every week or so." This past Tuesday, The Wall Street Journal ran its latest "bubble piece" with the headline, "In Silicon Valley, investors are jockeying like its 1999." The debate, as VentureBeat explains, "is about whether there's a comeback, with a recovery that is just beginning, or a bubble that is getting ready to burst." The median amount raised in the first quarter was $5 million for a round of funding -- up from $4.4 million a year earlier and on part with the 2009 median.

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