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To: Tina McKinley who wrote (42959)	4/8/1998 8:01:00 PM
From: Glenn D. Rudolph	Respond to of 61433

Internet Venture Capital Investments Explode to $1.88 Billion in 1997 PR Newswire - April 08, 1998 08:24 %CPR %MLM V%PRN P%PRN Funding up 1300% in Two Years SAN JOSE, Calif., April 6 /PRNewswire/ -- Venture capital investments in Internet-related companies doubled in 1997 to $1.88 billion -- a 1300% increase over 1995's $134 million according to the Price Waterhouse National Venture Capital Survey. Susan Gore, Internet partner in the San Jose office of Price Waterhouse said, "At the end of 1996, many experts were questioning if the Internet space was already saturated. The resounding answer is no. Both the total dollars and the number of companies increased dramatically." Fastest Growing Segment Total venture capital investments in all industries were up 34% in 1997 over 1996 to a record $12.8 billion. Investments in Internet-related companies had the highest rate of growth of any industry segment. Gore observed, "Internet companies cut across all traditional industry categories we use in our survey like Software and Communications. As a grouping, Internet dollar investments increased 103%, versus 27% for all other industries including other high technology investments. "In terms of number of companies, the Internet segment was up 61% compared to 26% for all other industries. Clearly, the Internet is one of the key drivers of investment growth overall." Shift Toward Later Stage Investments The number of companies in the formative stages -- those in the start-up or early stage of development -- increased in 1997. However, they represented only 50% of the companies this year compared to 64% last year. While companies in the expansion stage grew from 14% of companies in 1996 to 37% in 1997. According to Gore, "This is a natural shift. With product development and business cycles so short, a company that got its first round of financing in 1996 can easily be in the expansion stage with third round in 1997. This accelerated pace characterizes the Internet market as a whole." All Internet Sub-segments Grow A further analysis of the general survey data subdivided Internet investments into four discrete categories: Access/Infrastructure, Software, Content and Services. There were no major shifts between these sub-segments from 1996 to 1997. Ms. Gore observed, "This demonstrates that the Internet is moving en mass. No single factor is driving the industry. This isn't really surprising considering the inter-dependency of the technologies and the amorphous nature of the category." The Geography of Cyberspace As expected, California and Massachusetts were one-two in terms of dollars and number of Internet companies by a wide margin. After that, investments were spread widely around the country. Colorado, New York, Texas, Pennsylvania, Minnesota, Virginia and Georgia all made the top ten list in 1997. Price Waterhouse National Venture Capital Survey Endorsed by the National Venture Capital Association (NVCA) and the National Association of Small Business Investments Companies (NASBIC), the Price Waterhouse National Venture Capital Survey is conducted under the sponsorship of the Price Waterhouse Technology Industry Group. On average, approximately 500 venture capital firms participate each quarter. The survey tracks US investments in all types of industries. (www.pw.com/vc) The Price Waterhouse Technology Industry Group assists innovative and fast-moving companies in the life sciences; networking and communications; semiconductor; software; and computers and peripherals industries. These business advisors have experience in helping domestic and international companies in all stages of growth. For nearly 150 years, Price Waterhouse has helped the world's leading companies solve complex business problems. Today, through a worldwide network comprising 53,000 professionals in 119 countries and territories, Price Waterhouse assists clients in implementing strategies to improve business performance; effecting organizational and strategic change; using information technology for competitive advantage; and meeting audit and tax requirements. SOURCE Price Waterhouse LLP /CONTACT: Kirk Walden of Price Waterhouse LLP, 214-754-8927; or Allison Good of Ketchum Public Relations, 415-984-2208, for Price Waterhouse/ /Web site: pw.com In SFW027, "Internet Venture Capital Investments Explode to $1.88 Billion in 1997", moved earlier today, the dateline should read "SAN JOSE, Calif., April 8 /PRNewswire/ -- " rather than "SAN JOSE, Calif., April 6 /PRNewswire/ -- "as incorrectly transmitted by PR Newswire. SOURCE Price Waterhouse LLP /PRNewswire -- April 08/ /Web site: pw.com