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Silicon Valley Feels Economic Chill

Venture capital has dried up, stocks have sagged in tech hot spot

By Jim O'Neill,  Newser User

Posted Apr 9, 2008 11:51 AM CDT
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(Newser) – Venture capital in Silicon Valley is drying up as angel investors, wary of the fickle stock market and tightening credit markets, become more cautious with their cash, the New York Times reports. Their hesitance has slowed the pace of job growth and expansion at tech start-ups, and has dramatically cut the number of firms going public.

The Valley’s top companies have seen stock prices sag—Apple is down 21%, Google 31%—and that softness has translated into fewer acquisitions. Of last year’s bumper crop of initial public offerings, just a quarter are above offering price, half the usual number. The decline of the dollar also has hurt, pushing costs up 10%-20% and limiting return.

Even Silicon Valley is starting to feel the pain if the economic downturn.
Even Silicon Valley is starting to feel the pain if the economic downturn.   (AP Photo)
Even Silicon Valley is starting to feel the pain of the economic downturn.
Even Silicon Valley is starting to feel the pain of the economic downturn.   (AP Photo/Mark Lennihan)
Even Silicon Valley is starting to feel the pain if the economic downturn, with Apple and others seeing big stock slumps.
Even Silicon Valley is starting to feel the pain if the economic downturn, with Apple and others seeing big stock slumps.   (AP Photo/Mark Lennihan)
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