Recent Commentary on Venture Capital Trends

Posted on November 13, 2008


From PWC’s report “Exit slowdown and the new venture capital landscape”:

“In the second quarter of 2008 there were zero VC-backed exits – on the heels of five in the previous quarter which raised a thin $283 million. In the first half of 2007, by comparison, 43 VC-backed IPOs collected $6.3 billion.”

From the Q3, 2008 report of University of San Francisco Silicon Valley Venture Capitalist Confidence Index™:

The Silicon Valley Venture Capitalist Confidence Index reading “fell from the previous quarter’s reading of 3.07 to a fourth consecutive new low since the Index was originated in Q1 2004 and indicates a continuing downtrend in venture capitalists’ confidence.”

From Lawrence Aragon’s article on this week:

“The preliminary numbers indicate that VCs are hunkering down more quickly than they did after the dot-com crash. The data show that U.S.-based venture firms invested in just 250 companies last month, down from 565 companies in September and 518 companies in October 2007. You have to go all the way back to January 2004 (when they invested in 232 companies) to find a lower number. The only other October with fewer deals was in 1993.”

Some positive does exist out there. The Q3 2008 MoneyTree Report published by PriceWaterhouseCooper indicates that overall venture capital activity is stable if measured in terms of dollars.

“Despite the turmoil in the global financial markets, US venture capital investing remained within historical norms in the third quarter of 2008. Venture capitalists invested $7.1 billion in 907 deals…”