First-time VC financing falls to 15-year low

Jul 22 2009

First-time VC financing falls to 15-year low

Posted by: admin in Investments and Raising Money

Filed under: Venture capital industry, Investments

Venture capital funds found 612 companies in which to invest $3.67 billion in Q2. Of this, $1.5 billion (41%) was first-time financing, according to a report by PricewaterhouseCoopers and the National Venture Capital Association. This is only slightly ahead of the action in Q1, in which 141 transactions were first-time, and far behind the pace seen earlier this decade.

The biotech sector was the massive winner in a shrinking market, with funding up 54% to $888 million over 85 deals. The software business was flat quarter-over-quarter at $644 million over 135 transactions. Investments in world wide web companies fell 15% to $524 million via 124 deals. Clean technology showed considerable growth, up 15% to $274 million, with 42 transactions shut.

Nonetheless, first-time fundings hit levels not seen since 1994. The biotech category benefits from the availability of exits, having shown several liquidity events this year. The other venture capital sectors haven’t been so fortunate.

Most of the money last quarter went to seed or early-stage companies, with 233 receiving capital from the VC world. Late-stage companies lagged, with only 207 being funded. In the middle, 172 companies benefited from VC activity.

First-time VC financing falls to 15-year low originally appeared on BloggingBuyouts on Wed, 22 Jul 2009 11:40:00 EST . Please see our terms for use of feeds.