Biotechnology leapt ahead as the biggest recipient of U.S. venture capital money in the second quarter, but first-time venture investments in companies overall dropped to a 15-year low, a trade association reported on Monday.

The venture capital industry put $3.67 billion into 612 separate companies or deals during the second quarter, of which $1.5 billion involved first-time funding, according to the MoneyTree report by the National Venture Capital Association and PricewaterhouseCoopers. The report was based on ThomsonReuters data.

The investment total was only slightly better than in the first quarter and far below levels earlier in the decade. Only 141 deals were first-time investments.

You have to go back to 1994 to find this few of first-time fundings, said John Taylor, who heads research for the National Venture Capital Association.

Biotechnology funding grew 54 percent to $888 million in 85 deals, software came flat at $644 million in 135 deals and Internet companies fell 15 percent to $524 million in 124 deals.

Clean technology funding grew 15 percent to $274 million in 42 deals.

The head of PricewaterhouseCoopers's venture capital practice said the reason for the growth in biotechnology funding was obvious -- there are more acquisitions and initial public offerings in life sciences.

Life sciences is one of the few sectors that has a regular stream of exit events, Tracy Lefteroff said on a conference call.

If you're an investor in a venture fund you're going to put your money where you believe you have the best chance to get liquidity. At this point, life science is looking to be fairly attractive compared to the other areas.

But many venture-backed companies could not find a buyer because of the economic downturn, or the price offered was too low, forcing backers to keep supporting them, Taylor said.

He said the 207 late stage companies that got funded were nearly as numerous as the 233 seed or early stage companies, with 172 in the middle.

That is a low percentage for seed and early stage, Taylor said. In the past, this category often dwarfed the number of late stage companies receiving funding.

And although deals and money are slowly returning, the entire venture capital business has shrunk significantly since earlier in the decade.

(Reporting by David Lawsky; Editing by Richard Chang)