NVCA: Investments are flat, but good luck with those first-time deals - VentureBeat

Summary:
Venture investments held relatively steady in Q2 2008, despite dreary economic climate. Venture firms appear to be taking the longer view and betting that their portfolio companies can weather a temporary downturn. But more money going to later-stage deals, not funding of young startups. Reason: due to inhospitable IPO and acquisition markets, more venture dollars are needed to keep later-stage startups going as they wait for the exit environment to improve. Prominence of software industry waning in favour of industrial/energy companies. (Published: 18/07/08)

Notes:

• venture investments held relatively steady in Q2 2008
• despite dreary economic climate
• more money going to later-stage deals, not funding of young startups
• Q2 2008
• $7.4b invested in 990 deals
• only a slight drop from $7.5b of funding in Q1 2008
• flat compared to Q2 2007
  
• but well below peak of $8.1b in Q4 2007
• inhospitable market for IPOs and acquisitions
• no IPO in Q2 2008
• consequence:
  
• more venture dollars needed to keep later-stage startups going as they wait for the exit environment to improve
• why hasn’t venture investment taken a bigger drop?
• Mark Heesen: venture firms are taking the longer view and betting that their portfolio companies can weather a temporary downturn
• prominence of software industry waning in favour of industrial/energy companies
• placing second among the latter industries with $1.15 billion of funding, more than double the $571 million invested in Q2 2007