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Venture-Capital Investments Decline

Amount of money falls 5% vs. last year, but number of deals rises

By Matt Cantor,  Newser Staff

Posted Apr 19, 2008 11:20 AM CDT
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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.

Just five venture-backed companies made their initial public offering of stock in the first quarter of this year.
Just five venture-backed companies made their initial public offering of stock in the first quarter of this year.   (Shutterstock)
Venture capitalist investments declined 5% in the first quarter compared with last year.
Venture capitalist investments declined 5% in the first quarter compared with last year.   (Shutterstock)
Venture capitalist investments declined in the first quarter, and only 56 venture-backed startups were sold during the first three months of the year, the lowest volume in a decade.
Venture capitalist investments declined in the first quarter, and only 56 venture-backed startups were sold during the first three months of the year, the lowest volume in a decade.   (Shutterstock)
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