Ottawa's share of the venture capital money flowing into Canada's major tech sectors shrank during the second quarter, according to statistics released Tuesday.

According to the quarterly report, compiled by Toronto-based Macdonald & Associates for the Canadian Venture Capital and Private Equity Association, about $375 million was invested in Canadian firms.

Of that total, 14 per cent came to Ottawa, down from 15 per cent in the first quarter and 19 per cent for all of 2003.

Montreal and Vancouver also shared less of the pie, while Toronto held relatively steady. Instead, more money flowed into smaller centres outside of the four major cities.

"Twenty-eight per cent of investment went to other cities whereas last year it was 15 per cent," Robin Louis, president of the CVCA and Ventures West Management Inc., said in the report.

Another trend in the second quarter was that less money was invested in traditional technology firms. Mr. Louis said about 30 per cent of the total went to non-tech firms, up from the historical average of 20 per cent.

Aside from how the pie was cut, the second quarter figures demonstrate a significant turnaround from a weak 2003. At $375 million, total venture capital investment is up 48 per cent from the $274 million reported for the second quarter of 2003, the report found.

In total, Ottawa received $52 million in Q2, down from the $63 million in the first three months of the year. However, the total for the most recent quarter was far higher than $22 million reported in last year's Q2.

The numbers paint a somewhat different picture than the numbers offered up for the second quarter from the Ottawa Centre for Research and Innovation late last month. By OCRI's measure, about $62.4 million worth of VC flowed into the nation's capital in the second quarter, up substantially from $18.4 million in the first quarter and the less than $40 million reported in the second quarter of 2003.

When a financing deal closes vs. when it is actually announced is usually the biggest factor that can lead to conflicting totals.

Regardless of which report paints a more accurate picture of local VC activity in the first half of this year, there is no denying the third quarter is shaping up to be a winner. Since the beginning of July, local companies have announced more than $85 million in venture capital, angel investments and private placements.