The venture capital database CB Insights has just released its report of investment from the second quarter of 2011, and based on the deals it's tracked, venture capital funding is at a nine-quarter high - both in terms of the amount of funding and the number of deals. Compared to this time last year, deals are up 25% and funding up 29%.

Of course, those wanting to point to this as yet another sign of a tech bubble will have ammo here, but the data from the report demands a bit more of a nuanced assessment. Even though investment is up, early stage VC funding is down. In fact, the overall portion of VC deals to early stage companies (primarily Series A deals) dipped to a five quarter low. It will be interesting to watch the impact of this over the next few months because, as CB Insights points out, "it's possible companies who've raised their Seed rounds might be orphaned."

Across all Internet companies tracked in the CB Insights' database, deals were up 28% year-over-year and funding grew 69% as compared to the second quarter of 2010. Of course, a number of "mega-deals" in the group buying industries helped drive this funding level.

Regionally, California continued its dominance, representing almost half of the Internet deals, with New York remaining in the number 2 spot, followed by Massachusetts. These three states comprised over 60% of deals and more than 75% of funding. The news was less than stellar from Seattle where funding remained low.

The full report can be found here.