Venture capital investments in the US are on the increase, the San Jose Mercury News reported, noting that the latest Money Tree survey of venture funding in the San Francisco Bay Area found that in the first quarter of this year, 74 companies got $329.6m, topping the old record of $288.1m in the third quarter […]
Venture capital investments in the US are on the increase, the San Jose Mercury News reported, noting that the latest Money Tree survey of venture funding in the San Francisco Bay Area found that in the first quarter of this year, 74 companies got $329.6m, topping the old record of $288.1m in the third quarter of 1993. Even if the pace slows, 1994 can still beat the 1993 record of $949.8m in venture capital investments, which would mark one of the strongest venture capital rebounds ever – and despite weakness in the stock market, demand for initial public stock offerings remains strong in the US – in contrast to London, where the market has fallen much further and there are plenty of signs of serious new issue indigestion. Mergers and acquisitions are on the rise, especially in software, creating an additional outlet for the sale of venture-backed companies, the report notes, adding that for the first time this decade, new venture capital firms are being formed. Venture capitalists are showing more discipline both in the prices they’re willing to pay for stock in young companies and in the number of competitors they’re willing to back, it reckons, adding that there is no shortage of leading-edge companies in which to invest, and they are attracting a growing pool of entrepreneurs. As for sectors, investments in medical device companies have increased, and last quarter, 11 such companies accounted for the bulk of $86.6m that went into the biotechnology and medical products category. Software companies were out in front overall, drawing in $91.4m, up from $69.6m the previous quarter. Telecommunications companies raised $40.2m, up from $37m last quarter and only $3.6m in the first quarter of 1993. Fun-ding for semiconductor and semiconductor equipment companies slowed last quarter to $13.8m, down from $22.9m in the previous quarter – still more than four times the funding in the first quarter 1993.
