Feeds:
Posts
Comments

Posts Tagged ‘Investments’

VC funding dips, and seed investments nosedive

Posted in Board Of Intellectual Capital, Business models, Distressed Intellectual Property, Economy, Gerbsman Partners, Intellectual capital, Investments, IPO news, Market research, National Venture Capital Association, NVCA, PricewaterhouseCoopers, PWC, Strategy, Technology, Venture Capital, tagged , , , , , , , , , , on October 20, 2011| Leave a Comment »

Article from GigaOm.

It’s no secret that the larger economy has hit a rough patch in recent months. Although Silicon Valley has — in general – fared better than many other parts of the world, the venture capital industry is not immune to the negative effects of the macro-economic slowdown.

In the third quarter of 2011, venture capital investment activity fell 12 percent in terms of dollars and 14 percent in terms of deals compared to the previous quarter, according to the latest edition of the MoneyTree Report assembled by accounting giant Pricewaterhouse Coopers (PwC) and the National Venture Capital Association (NVCA).VCs invested $6.9 billion in 876 deals during the July through September timeframe in 2011, the MoneyTree report says, a notable decline from the $7.9 billion invested in 1,015 deals during the second quarter of 2011.


To be fair, the industry is still up compared to last year. For the first three quarters of 2011, VCs invested $21.2 billion, which is 20 percent more than VCs invested in the first three quarters of 2010. And 2010 saw an even bigger drop between the second and third quarters of the year. But VC funding is not exactly predictable according to the time of year — in 2009, for instance, the third quarter of the year was stronger than the second.

The VC industry is not as predictably cyclical as others because it generally takes its cues from a fluctuating variety of places: the worldwide economy, the entrepreneurial environment, the stock market’s appetite for IPOs, and larger companies’ appetite for acquisitions. It’s a complicated mix, but at the moment, it seems venture capitalists may be nervous about the larger environment of financial unrest, and the IPO window that opened earlier this year seems to be closing.

Seed funding takes a hit

Seed funding — which has recently been the hotshot of the industry as more angel and individual investors have become active in funding the startup scene — took a major hit in the third quarter of 2011. Seed stage investments fell a whopping 56 percent in terms of dollars quarter-over-quarter, and 41 percent year-over-year, to $179 million. It’s not just the total amount of seed investment that’s fallen, it’s also the amount of money per deal: The average seed deal in the third quarter was worth $2 million, a 43 percent drop from the average seed deal in the second quarter of 2011, which was $3.3 million.

And late stage deals have started to see major declines as well. Later stage startup investments decreased 20 percent in dollars and 30 percent in deals in the third quarter compared to the second, MoneyTree reported. Middle, or expansion, stage deals were relatively robust: Expansion stage dollars increased two percent quarter-over-quarter and 43 percent year-over-year, with $2.5 billion going into 260 deals.

Software is still strong

It’s not all doom and gloom, though. The software space has held up fairly well, receiving the highest level of funding for all industries during the third quarter with $2 billion invested from venture capitalists. That’s a 23-percent increase in dollars from the second quarter, and according to MoneyTree, the highest quarterly investment in the sector in nearly a decade, since the fourth quarter of 2001.

The web industry had a relatively soft quarter, as investments in Internet-specific companies fell 33 percent quarter-over-quarter during the third quarter to $1.6 billion. But it’s not exactly time to cry for Internet startups; the third quarter had a very tough act to follow, because Internet-specific VC deals hit a 10-year high in the second quarter of 2011.

Read original post here.

Read Full Post »

Internet/Digital Media and Software Industries Silicon Valley and Seattle 2010

Posted in Board Of Intellectual Capital, Investments, Strategy, Technology, Venture Capital, tagged , , , , , , on April 8, 2011| Leave a Comment »

Article from Fenwick and West.

“In 2002, Fenwick & West began publishing its Silicon Valley Venture Capital Survey. The survey was published in response to dramatic changes in the venture capital financing environment resulting from the bursting of the “dot-com bubble”, and our belief that there was a need for an objective analysis of how the venture capital environment had changed. The survey was well received and we have continued to publish it – a copy of the most recent survey is available here.
We believe that in recent years there has been a significant change in the angel/seed financing environment primarily in the internet/digital media and software industries. We believe these changes are due to the following factors:

The nature of these industries is such that products can be developed and introduced to the market quicker and with less resources than other industries. The development of new technologies has further accelerated the speed, and reduced the resources needed, to introduce new products in these industries.

These industries have now been around for at least a decade, if not longer, and as such a generation of successful entrepreneurs having the expertise, financial resources and interest is now available to assist and finance the current generation of entrepreneurs.
Venture capital has become harder to obtain, with venture capital investment in the U.S. overall declining from $29.9 billion in 2007 to $26.2 billion in 2010, and with investment in venture funds by limited partners declining even more precipitously, with $11.6 billion invested in 2010, the lowest amount since 2003, according to Dow Jones VentureSource.

As a result of these factors we believe that there have been the following changes in the angel/seed financing environment:

  • There has been a shift in the composition of investors, from largely friends and family, wealthy individuals and a few organized groups, to a larger percentage of professional angels, seed funds and venture capital funds willing to invest smaller amounts of capital.
  • The amounts raised in angel/seed financings have increased, and can exceed $1 million. Investors in these financings also have deeper pockets with the ability to participate in later rounds.
  • The terms of these financings have become more sophisticated and arms length, as investors are more likely to be true third parties investing larger sums, with an interest in being more active in the oversight of their investment.

In light of the increasing importance of angel/seed financings, and a desire to make objective information about such financings available to the community at large, we undertook a survey of 52 internet/digital media and software industry companies that obtained angel/seed financing[1] in 2010 in the Silicon Valley and Seattle markets.”

Read more here.

Read Full Post »

Facebook raises $1.5 billion in investments so far

Posted in boic, Business models, tagged , , , , , on January 23, 2011| Leave a Comment »

Article from SFGate.

“In the company’s most revealing disclosure of its financial plans to date, Facebook Inc. said Friday that it has raised $1.5 billion in investments and planned to start reporting its finances publicly by April 2012.

The Palo Alto social networking powerhouse remains private, but a news release issued 15 minutes after the close of the stock markets signals that Facebook is moving closer to an initial public offering.

Facebook officials had previously remained mum on published reports that surfaced as the new year dawned about a deal that would bring a $450 million investment from New York’s Goldman Sachs Group Inc. and an additional $50 million from Digital Sky Technologies Inc. of Russia.

But the news release was Facebook’s first public statement on those reports, and it confirmed the investments were based on a company valuation of $50 billion.

Facebook also said it had the option to accept between $375 million and $1.5 billion from Goldman Sachs, which planned to raise that money by selling shares of a special Facebook fund to select clients.”

Read more here. 

Read Full Post »

VCs Opened Their Wallets Wider In 2Q, But It’s All Relative

Posted in Board Of Intellectual Capital, tagged , , , , on July 20, 2010| Leave a Comment »

Here is an atricle from WSJ´s VC blog.

“Riding solid gains in life sciences, venture investors opened their wallets a bit wider in the second quarter, increasing their investment pace after a dismal first quarter.

Overall, venture capitalists invested in 744 companies in the second quarter, up from 656 in the year-ago period and 602 deals in the first quarter of 2010. That amounted to $7.75 billion in the second quarter, up from $6.11 billion in the year-ago period and $4.66 billion in the first quarter of 2010. The new data come from VentureSource, which like VentureWire and The Wall Street Journal is owned by Dow Jones & Co., a division of News Corp.

But the improvement was mostly relative – the $12.41 billion raised altogether in the first half was an improvement on the $10.43 billion raised in the first half a year ago but still less than the first-half figures posted in the years 2006-2008.

At the same time, the macro-economic climate has improved, providing more confidence for investors who last year were more concerned about their existing companies than finding new ones. The economic improvement also gives confidence that exits will eventually materialize.

“Things have loosened up substantially,” said Dave Hills, general partner at KPG Ventures. “When nobody was sure what would happen, people were very concerned about follow-on investments they had to make with companies in their portfolios. Those have stabilized and now it makes sense to look for newer deals to put more money to work.”

Continuing a trend begun in 2009, when health care outpaced information technology for the first time in a decade, medical investment topped IT for the second quarter and for the half.

VCs pumped $2.72 billion into 201 health-care financings last quarter, a 14.7% leap from the $2.37 billion deployed in 189 rounds in the same time last year. The second-quarter total more than doubled the $1.23 billion invested in 151 rounds in this year’s first quarter, which had been the worst period for investment since the first quarter of 2003, when firms committed $1.14 billion to 118 financings.

Meanwhile, information technology was up to 231 deals in the second quarter, from 208 in the year-ago period and 186 in the first quarter of 2010. That represented $1.92 billion invested in the second quarter, up from $1.55 billion in the year-ago period and $1.48 billion in the first quarter of 2010.

While almost one-third of second quarter financings were seed or first rounds, there has still been caution in later stage deals, because of volatility in the public markets that has made both large IPOs and M&A deals hard to come by.”

Read the full article here.

Read Full Post »

Venture Capital Clean Tech Love Affair Is Maturing

Posted in Board Of Intellectual Capital, tagged , , , , , , , on February 9, 2010| Leave a Comment »

Here is some interresting pointer around Cleantech and Investments from Techpulse 360.

“U.S. venture firms are taking a more circumspect view of clean-tech investing. Less flash, more focus on profits.

That could lead to more start-ups trying to build businesses with less money.

According to a recent survey, substantial sums of money continue to flow into the industry. Ernst & Young reported Monday that $2.6 billion went into clean-tech start-ups last year, a noticeably more optimistic assessment than last month’s MoneyTree survey, which posted a figure of $1.9 billion. The higher sum suggests VCs were significantly more active last year than may have been thought.

The E&Y work also uncovered a second detail that didn’t show up in the MoneyTree study – which was conducted by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters.  While investment dollars fell 45 percent in the fourth quarter, the number of deals were up – 21 percent to 62. More deals, smaller sums of money per company, more room for profits.

The MoneyTree work found that the number of deals in the quarter fell to 47 and that overall dollars declined 58 percent.

It is hard to know which of the surveys is more accurate. But the prospect of venture capitalists funding more companies at lower dollar values is interesting to contemplate. It suggests funds are seeing clean-tech investing more like they see information-technology investing: put a little money in, expect a lot back.  This prospect may encourage more VCs to take part.”

Read the full article here.

Read Full Post »

« Newer Posts - Older Posts »