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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (8792)	11/4/2002 6:33:28 PM
From: stockman_scott	Respond to of 89467

Venture fundraising contracts in third quarter Monday November 4, 6:21 pm ET SAN FRANCISCO, Nov 4 (Reuters) - Fund raising by venture capital firms slowed in the third quarter as funds sat on a $90-billion cash glut and remained selective about new investments, industry analysts said on Monday. In the third quarter, venture firms raised 33 funds totaling $1.7 billion in commitments, compared with 36 funds totaling $2.1 billion in the prior quarter and 69 funds totaling $7 billion a year earlier, according the National Venture Capital Association industry group and research firm Thomson Venture Economics. Venture firms are not in a hurry to ask investors for additional funds, John Taylor, NVCA's vice president for research, told Reuters. "The large venture firms, which control the majority of the capital under management, raised very large funds in 2000 and 2001," Taylor said. "They were clear they would invest those funds over two, three, four years. Now we find ourselves with a very large amount of uninvested capital and slowing demand for that capital." Venture capitalists reined in new investments in part because the weak market for initial public offerings leaves them with no clear exit strategy. Acquisitions of start-ups have also slowed because stocks used to buy privately held companies have lost value and many corporations have tightened spending and investment in a bid to shore up their own balance sheets. Venture financing fell in the third quarter to its lowest level since early 1998. Venture firms invested $4.5 billion in start-ups in the third quarter -- 26 percent below second-quarter's funding and down 85 percent from a record $29.1 billion in the second quarter of 2000 during the dot-com boom. The last time venture investment was below $5 billion was in the first quarter of 1998, according to the most recent MoneyTree Survey by PricewaterhouseCoopers, Thomson Venture Economics and NVCA.