Sinking Market Forces New Venture-Capital Strategies

Venture capitalists are watching economic indicators carefully, trying to find safer places to put their mountains of money, CNET reports. The stats on first-quarter VC activity will land soon, and though experts don't expect dollar totals to have waned, players are “under pressure to invest in quality companies that have a clear business model,” one watcher said.

The number of venture-backed deals is way down, CNET adds. VCs are looking twice at “new start-ups like two guys in a garage,” another expert explained—and older companies need additional rounds of financing to stay afloat. And a Microsoft-Yahoo merger would hurt, analysts believe, as there would be one fewer giant company to snatch up start-ups. (More venture capitalists stories.)