Venture capital investing in the U.S. increased to $6.5 billion.

Washington ranked fifth in terms of venture capital investments during the second quarter as $187 million was invested in the state. That was up slightly from the previous quarter when $176 million was invested here, according to the PricewaterhouseCoopers/NVCA MoneyTree report. However, the real story was the increase in the number of deals. Venture capitalists participated in 37 deals in the state, up from 24 in the previous quarter and 32 for the same period last year.

"We are seeing pretty good deal flow," said Bill McAleer, a partner at Voyager Capital in Seattle. "There's a lot of activity in all three markets (Washington, Oregon and California). Generally, there's plenty to look at."

The MoneyTree report is one of several to be released this week showing trends in venture capital activity. Yesterday, CB Insights reported that 25 companies raised $211 million in the state.

On the national front, the report showed a 34 percent increase in dollars invested and a 22 percent increase in number of deals when compared to the first quarter. In total, VCs pumped $6.5 billion into 906 deals. California was by far the leader, with $3.7 billion spread among 369 deals. That was followed by Massachusetts -- $557 million and 86 deals -- and New York -- $321 million and 69 deals. Texas just outperformed Washington, with $188 million spread across 39 deals.

In Oregon, $59 million was invested in six deals. That compared to $46 million in 10 deals for the prior quarter.

VC investing in Washington from 2008 to Q2 2010

Venture capitalists have been struggling with poor returns brought on by a lack of initial public offerings and high-quality mergers and acquisitions. But there's been some hope as of late that the mood is changing.

"As the exit market begins to show signs of life, venture capitalists are now able to look increasingly at new investments outside their existing portfolio," said NVCA president Mark Heesen in a statement. "This dynamic translates into momentum in the seed and early stage sectors where valuations remain reasonable and opportunities are great.”

Nonetheless, the exit market in Washington state remains relatively weak. Just one venture-backed company has completed an IPO so far this year, Bellevue mobile software company Motricity. And its performance was recently ranked among the worst.

There remains concerns about the IPO market and the general economic conditions. But McAleer, for one, said that he remains pretty optimistic.

"It seems like the market is overdoing the concern around the economic conditions. It seems like things are OK. They are not healthy, but they are not as bad as they were during the depths of the recession."

Biotechnology was the top investment sector in Washington with three deals totaling $49.9 million, helped in part by a $40 million investment in Calistoga Pharmaceuticals. That was followed by industrial energy, which saw three deals totaling $42 million. Software ranked third with $32.5 million invested in 11 deals.

Related: A 'new normal' in venture capital