<<In an earlier post I reported on a book that suggested we might see a drying up of venture capital to the detriment of young companies and to the advantage of established market leaders.>>
From FreeEdgar IPO SECrets Newsletter, received today:
*** VC Investment Off Sharply in Q-4
Venture capitalists invested $19.6 billion in the fourth
quarter of 2000, more than 30% less than the $28.3 billion
they invested in the previous quarter. In fact, it was the
lowest infusion of new VC money since the third quarter of
1999, according to the National Venture Capital Association
(NVCA).
"The venture industry achieved record levels in 2000, but
after five years of exceptional and unprecedented growth,
evidenced by a ten fold increase in investments made, the
industry is catching its breath," said NVCA president, Mark
G. Heesen, in an announcement Monday.
Despite a languid fourth quarter, venture capitalists invested
a record $103 billion into 5,380 companies in 2000, the NVCA
said. That's nearly 74% more than the $59.4 billion invested
in 1999. The average investment per company in 2000 grew to
$19.14 million, 27.9% higher than the $14.97 million average
in 1999.
Approximately one-third of venture capital invested in 2000
-- $33.4 billion -- was concentrated in Northern California-
based companies. The New York region attracted the second-
largest proportion of investment -- $12.1 billion -- or 11.7%
of the total.
Not surprisingly, VC's have become increasingly cautious
about investing in new ventures since the Nasdaq shakeout
began last spring . In 2000, VC firms put just 33.3% of
investments into new ventures, compared with 42.4% in 1998
and 42.5% in 1997. In the fourth quarter, new venture
investments accounted for just 25.5% of VC committed capital. |
