"New venture outlays nationwide totaled more than $7 billion for the seventh consecutive quarter. "The venture industry is very much open for business," said John S. Taylor, vice president of research at the venture capital association."
This is ANOTHER PLACE (like insurance companies and sports) where the ultra-rich elite HID THEIR $$$!!!!
"Venture capital investing decreases; Funding down in region, nation for third quarter" by Robert Weisman, Globe Staff | October 18, 2008
With the economy turning down, venture capital firms scaled back financing of start-ups in the third quarter, continuing to shift toward later-stage investments and funding life sciences and clean energy companies.
Biotechnology start-ups raised the most money in the period, followed by software, energy, medical gear, and media firms, according to the quarterly MoneyTree industry report, being released today. Investments in Internet companies showed the biggest drop for the quarter.
Despite the deteriorating environment for "exits," where venture capital firms recoup their investments by selling companies or taking them public, new venture outlays nationwide totaled more than $7 billion for the seventh consecutive quarter. "The venture industry is very much open for business," said John S. Taylor, vice president of research at the venture capital association.
In addition to the economy pinching entrepreneurial firms, venture capitalists warned that fund-raising could be threatened by the collapse of the stock market. Many of their limited partners, such as pension funds and university endowments, have restrictions on the percentage of their portfolios that can be invested in venture funds.
Because of the lower stock values, "most are overallocated and overexposed to venture capital," said Jim Healy, general partner at Sofinnova Ventures in San Francisco, adding that could force them to back away from new funds or to sell some of their current investments in venture funds on the secondary market.
With diminished exit prospects in the near future, venture firms are pressing their portfolio companies to cut costs and conserve cash. "Capital efficiency is key," Healy said. "We work very hard with our management teams to have low burn rates," the pace at which venture-funded start-ups use capital reserves. --more--"
Translation: They are going to KEEP and HOARD CASH!!!
Yup, government is really trying to fix that credit crunch for you, Amurkns!!
Maybe it would have helped if they didn't initiate it, huh?
