Venture investment in software companies in Q1 2004 totaled more than $4 billion, which puts it on track to match the level reached in 1998, the year before the bubble started growing for the next three years, he said. Between 1999 and 2001, venture funding of software companies exceeded $38 billion. This dropped to a total of $9 billion for 2002-2003. Early this year companies seeking funding had average pre-money valuations of about $4 million for first-round funding, $8.3 million for second-round and $20 million for later-stage funding. Second-round and later-stage investments are averaging between $7.5 million and $8.5 million. First-round funding was up slightly from about $4.5 million to $5 million.