This story was corrected on Aug. 2, 2011. An explanation follows the story.

Venture capitalists continue to mostly target Maryland’s early- and late-stage companies, leaving an investment gap that seed companies are struggling to overcome.

Investments in the state jumped to $96.42 million in the second quarter of the year, representing 23 deals, according to the latest MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association. Early- and late-stage investments accounted for 16 of these deals, while expansions accounted for four and investments in seed companies accounted for three.

With investors continuing to view seed investments as those in the $3 million range, seed companies pursuing smaller infusions are still experiencing a drought in funding, said Robert A. Rosenbaum, president and executive director of the Maryland Technology Development Corp.

Tedco provided eight of the second-quarter investments at $75,000 each. Recipients were solar-industry-focused AccuStrata in College Park; Fuzbien Technology Institute in Rockville; online instructor Bandhappy in Owings Mills; energy company SemaConnect in Annapolis; and four biotechs: Creatv MicroTech of Potomac, Opticul Diagnostics of Rockville, Branchpoint Technologies of Stevenson and Euveda Bioscience of Baltimore.

“Tedco continues to be one of the most active funders of seed companies in the country,” Rosenbaum said. Tedco funded 19 companies last year.

Tedco — which was created by the legislature in 1998 and is governed by a 15-member board appointed by the governor — also is pursuing a standalone venture fund targeting investments in the $500,000 to $2 million range, he said.

He said more investors are positioning themselves to concentrate on the lesser-funded seed companies, but there has yet to be much definitive action.

Biotech was the biggest venture capitalist draw in the second quarter, according to the report, with information technology close behind.

Ten Maryland biotechs received investments, including major deals of $35 million with NovaSom in Glen Burnie and $24 million with VirxSys in Gaithersburg. Virtustream in Bethesda, a cloud computing firm, received $10.05 million.

NovaSom, which markets sleep apnea devices, was funded in early July by Safeguard Scientifics, with participation from existing investors including TPG Biotechnology II Fund and Quaker BioVentures. The company will use the capital to fund growth, expand its position in payer and provider markets, and develop more product innovations, according to a company statement.

Virtustream said in a statement that it would use its cash to commercialize its cloud computing platform; invest in branding, marketing and advertising; and expand its market presence.

“We have experienced great traction to date with our customers and felt now was the right time to invest further in our products, our markets and in our brand awareness,” CEO Rodney Rogers said in a statement.

Venture capitalists invested nearly 40 percent more in Maryland companies in the second quarter from the $58.82 million in the first quarter, according to the report. But that was less than the $115.69 million in the second quarter of 2010.

Maryland also experienced the national trend of more investments in online-related companies, such as $21,000 to broadband company Current Group in Germantown; $3.39 million to e-learning manager Moodlerooms in Baltimore; and Tedco’s $75,000 to Bandhappy. Nationally, investments in Internet-related companies increased 72 percent from the first quarter.

lrobbins@gazette.net

Correction: The original version of this story incorrectly reported the number of second-quarter venture capital investments in Maryland seed companies. Three such companies received such investments.