Is the Great Recession over? Are we recovering? Venture capitalist voted with their checkbooks in the second quarter of 2010 and they clearly think we are on the road to recovery.

The Great Recession wiped out just about everyone apart from foreclosure companies. Venture capital was a niche no different than the rest of the business market. People got scared and funds saw investors step back from the plate. This led to less money for funds and less venture capital money for start ups and small businesses. All and all, it was a very ugly two years.

The venture capital market has been showing some sings of life through the end of 2009 and into 2010. The first quarter of 2010 saw investment money accumulating and an increase in funding. The question was whether this was a trend or simply a blip in an otherwise rough patch? Many thought the second quarter results would give us a better view of the landscape. 

Well, the second quarter results are out and the news is good. Start up investments by VCs were up a staggering 53 percent compared to the second quarter of 2009. The total dollar contribution was $6.5 billion for the three months. This is a big number. To give you an idea of how so, we haven’t seen a number like this since before the Great Recession. 

The second quarter results for the venture capital industry are positive on a number of fronts. First, it is great news for companies looking for cash infusions. The last couple of years have been one big credit crunch. The release of new money into a starving business market may be the kind of step we need to see the recovery extend more clearly to Main Street America. 

The second reason these results are so good has to do with the outlook for the economy. You can find a guru on television for just about every view. None of them know anything. If you really want to know what is going on with the business world, you have to follow the money. The fact that investors are getting back into venture capital is a sign the big money not only thinks things are improving, but that they will for the next few years.

That’s good for all of us!