Venture funding in the greater L.A. area rose more than 42 percent last year to $1.26 billion, according to a report just released by Ernst & Young and Dow Jones Venture One. For the first year ever, the report found, capital investment in Southern California surpassed the total amount invested in New England in the year. Nationally, capital investment in U.S.-based companies was the highest since 2001 with a total of $25.75 billion invested, up 8 percent over 2005 levels. In 2006 California companies received nearly half of the deal flow and investment nationwide with 1,082 deals totaling $12.36 billion in investment dollars. Overall, Southern California companies received $3.11 billion in investments, a 25 percent increase over 2006.