Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (38854)	1/28/2003 2:40:02 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69358

No sure how to take this, except that there is no easy money in the sector. Venture capitalist have never been know as visionaries. They usually coming in when someone else has proven you can make money at something. ********************** Venture capitalists still shunning IT By Dawn Kawamoto Staff Writer, CNET News.com January 27, 2003, 3:36 PM PT Venture capital investments in information technology companies fell 48 percent in 2002, with information services companies taking the greatest hit, according to a new study released Monday. The malaise continued into its second year, especially for companies seeking their first funding round, said the joint report released by Ernst & Young and VentureOne. Technology companies received $11.7 billion in venture funding last year--down nearly half from the previous year and a 79 percent drop from the go-go period of 2000. Meanwhile, venture investments overall fell to $19.4 billion, down 44 percent from the previous year. IT companies received 1,173 rounds of funding last year, with the median round reaching $7 million. That's down from 1,782 rounds the previous year, with a median round of $8 million. "We knew it would be down for the year, but it's still surprising to see how far it's been down and how few early-stage companies are getting funded," said John Gabbert, vice president of worldwide research at VentureOne. The median amount of funding for IT companies seeking their first round was $5.45 million, while companies in their second round received a median of $8 million and later-stage companies $9 million. The information services industry was particularly hit hard. Last year, the sector raised $550 million--a sharp drop from the nearly $1.9 billion received the previous year, according to the report. "Companies were consuming a lot of IT consulting services when their businesses were growing rapidly. But now, people aren't looking to outsource as much as they used to," Gabbert said. "As a result, there is less interest in investing in that sector." Despite a sizable drop in IT investments in 2002, Gabbert anticipates better days in the future. "I think we've hit a plateau," Gabbert said. "I would imagine it will rise from its current levels over the next year."