Venture-Capital Investments Decline

Amount of money falls 5% vs. last year, but number of deals rises
By Matt Cantor,  Newser User
Posted Apr 19, 2008 11:20 AM CDT
Just five venture-backed companies made their initial public offering of stock in the first quarter of this year.   (Shutterstock)
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(Newser) – Venture capitalists’ investments declined 5% in the first quarter to $7.1 billion, compared with $7.5 billion this time last year, suggesting entrepreneurial concerns over startups in a troubled economy, the AP reports. The change marks the first year-to-year dip since late 2005. Still, the figure was the fifth-largest for a single quarter since 2001.

Despite the shrunken figure, more deals were made this year than during the first quarter last year, and industry officials say they aren’t worried. In an industry where investors plan involvement with a company over a number of years, immediate economic concerns are less relevant, says a rep for one firm—but “we aren’t completely immune,” one investor said. As usual, the technology sector took most of venture capitalists’ dollars.