Early-stage and seed investments are once again leading the venture capital industry, according to the Ernst & Young/VentureOne European Venture Capital Report. The second quarter of 2006 saw a 13% rise in investments to _962.4 million (US$1.23 billion). "A very strong initial public offering market" in Europe in the second quarter provide investors with "the exits needed to enable them to support the next wave of start-up companies," says VentureOne's Steve Harrison. While deal flows are down about 30% from a year ago, he says, "we are seeing the most interest in initial financings in proportion to the total activity, since 2001" - 43% of the total, to be exact. The U.K. led the way in first rounds, with early-stage deals representing 53% of all VC bringing in 52% more cash in that sector than in the first quarter of the year. According to the E&Y/VentureOne data, the first-round median of _2.5 million was two-and-one-half times that of a year ago, while the second-round median was nearly triple to _3.9 million. As in the U.S., energy -- particularly the alternative kind - and certain technology sectors are drawing the most attention from European investors. Meanwhile, in the U.S., investors poured $12.9 billion in the first half of 2006, putting it at the fastest fund-raising pace since 2001, according to Fenwick & West.