U.S. Venture Investment Lowest in 11 Years, Down 50% to $3.9 Billion in Fir... ( Dow Jones VentureSource: Investment a...)

U.S. Venture Investment Lowest in 11 Years, Down 50% to $3.9 Billion in First Quarter

Date:4/17/2009

Dow Jones VentureSource: Investment at Lowest Level Since 1998, Deals at a 13-Year Low; VCs Making Choice Investments, Concentrating on Established Companies

SAN FRANCISCO and NEW YORK, April 18 /PRNewswire/ -- New data from Dow Jones VentureSource shows that the U.S. venture capital industry continued to contract in the first quarter of the year. Venture capitalists invested just $3.90 billion in U.S. companies in the quarter, a 50% decline from the nearly $7.78 billion invested over the same period in 2008 and the lowest quarterly investment total since 1998. Only 477 venture deals were completed in the quarter, well below the 706 deals done in the first quarter last year and the industry's lowest quarterly deal total since 1996.

"We're seeing continued retrenching in the venture capital industry," said Jessica Canning, Director of Global Research for Dow Jones VentureSource. "Over the past several quarters, VCs have pulled back significantly on early stage investments in the U.S., across all industries. During the economic downturn, investors will continue to focus on nurturing their strongest, existing portfolio companies, and keep their eyes open for the next set of opportunities."

IT Industry Walloped: Investment, Deals at 90s Levels

According to VentureSource, the Information Technology (IT) industry saw its lowest level of investment since 1997 with $1.68 billion invested in 231 deals in the first quarter of 2009. This marks a 52% drop-off from the $3.48 billion that was invested in 370 such deals during the same period last year. The deal count is the lowest for the IT industry since 1995.

Notably, the software sector saw $728 million invested in 117 deals during the quarter, a 50% decline from the same period last year when nearly $1.46 billion was invested in 163 deals. This marks the lowest quarterly investment in software since 1997 and the sector's smallest
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U.S. Venture Investment Lowest in 11 Years, Down 50% to $3.9 Billion in Fir...( Dow Jones VentureSource: Investment a...),Health