VENTURE CAPITALISTS MAINTAIN FURIOUS INVESTMENT PACE IN 2ND QUARTER.The National Venture Capital Association reports that venture capital investments increased 96% in the second quarter of 2000 to $24.5 billion up from $12.5 billion in the second quarter of 1999. Despite months of market volatility, venture capitalists Venture Capitalist An investor who provides capital to either start-up ventures or support small companies who wish to expand but do not have access to public funding. Notes: Venture capitalists usually expect higher returns for the additional risks taken. continued to invest in innovative, young companies at record levels. In fact, more companies received venture financing in Q2 than in Q1, 1,695 compared to 1,627. Although most of the second quarter investment statistics mirrored Q1 levels in terms of what was invested and where, the percentage of e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. investment followed market trends, decreasing by approximately 44%. "Venture capitalists are long-term investors Long-term investor A person who makes investments for a period of at least five years in order to finance his or her long-term goals. , whose investment strategies are not driven by short term market fluctuations. What has changed in recent months is the shift of interest from e-tailing (Electronic-reTAILING) Selling online. See e-commerce. to other technologies that will help move the new economy to the next level," clarified Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Lazarus Lazarus (lăz`ərəs) [Gr.,=Heb., Eleazar], in the New Testament. 1 Brother of Mary and Martha of Bethany who, after four days in the tomb, was brought back to life by Jesus. , NVCA NVCA National Venture Capital Association Research Chairman and Managing Director of ARCH Venture Partners. Online Specific, Communications, and Computer Software and Services continue to be the most favored industry categories. The Online Specific category fell slightly from 53% percent of total investment in Q1-2000 to 50% in Q2-2000. The percent of dollars invested in the Computer Software and Services category rose from 14.2% in Q1-2000 to 17.4% in Q2-2000. As Internet-related technologies continue to permeate permeate /per·me·ate/ (-at?) 1. to penetrate or pass through, as through a filter. 2. the constituents of a solution or suspension that pass through a filter. per·me·ate v. every aspect of society, Internet-related investments continue to attract the majority of venture capital dollars, with over 81% in Q2-2000. Interestingly, a smaller percentage of the total dollars invested in Internet-related companies went to e-commerce in Q2-2000, accounting for 14.5% versus 27.2% in Q1-2000. The Communications/Infrastructure category saw the greatest growth, with 20.1% in the first quarter of 2000 rising to 26.9% in the second quarter of 2000. The Online Software and Services category also saw significant growth, from 12.3% in the first quarter to 19.2% in the second quarter. "This trend reflects the tremendous opportunities offered by communications infrastructure companies. For the new economy to maintain its current momentum, the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. must continue to rapidly expand bandwidth and improve infrastructure rapidly," explained Jesse Jesse (jĕs`ē), in the Bible, the descendant of Rahab, the grandson of Boaz and Ruth, and the father of David. Referring to the restoration of the Davidic monarchy, the Book of Isaiah speaks of a shoot coming from the "stump of Jesse. Reyes Reyes , Point A promontory on the central California coast northwest of San Francisco. It is reported to be the windiest and foggiest place on the western coast of the continental United States, with an average of 137 foggy days a year. , Vice President of Venture Economics. While venture capital continues to be invested in all areas of the country, Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern and the Northeast continue to capture the largest percentage of investments, 36% and 21% respectively. The Southeast and Midwest experienced the highest growth when comparing Q2 1999 figures to those of Q2 2000, 122% and 121% respectively.
INVESTMENT TOTALS
QTR # of Co.s Avg. Per Co. Amt. Invest.
($Million) ($Million)
2000 -Q2 1,695 $14.50 $24,584
2000 - Q1 1,627 $15.25 $24,807
1999 - Q4 1,619 $15.55 $25,169
1999 - Q3 1,315 $10.64 $13,996
1999 - Q2 1,168 $10.74 $12,547
1999 - Q1 877 $7.68 $6,734
MAJOR INDUSTRY GROUPS
Industry Group
Q2 Amt(M) % Q1 Amt(M) %
Co.s Co.s
Online Specific 800 $12,259 50.0% 804 $13,154 53.0%
Comp. SW/Ser. 346 $4,284 17.4% 270 $3,524 14.2%
Communications 165 $3,506 14.2% 153 $3,288 13.3%
Semiconductors/
Electronics 69 $1,525 6.2% 48 $909 3.7%
Other Products 76 $800 3.2% 86 $1,202 4.8%
Medical/Health 97 $721 2.9% 117 $949 3.8%
Computer Hardw. 38 $486 2.0% 30 $344 1.4%
Industrial/Energy 18 $342 1.4% 19 $256 1.0%
Biotechnology 44 $337 1.4% 54 $594 2.4%
Consumer Related 42 $326 1.3% 46 $588 2.4%
TOTAL 1695 $24,584 100.% 1627 $24,807 100.0%
[**] Online Specific is a very narrow definition of companies that would
not exist without the Internet and that would not fit in any other industry
sector category.
The National Venture Capital Association (NVCA) represents more than 400 venture capital and private equity firms. NVCA's mission is to foster the understanding of the importance of venture capital to the vitality vi·tal·i·ty n. 1. The capacity to live, grow, or develop. 2. Physical or intellectual vigor; energy. of the U.S. and global economies, to stimulate the flow of equity capital to emerging growth companies by representing the public policy interests of the venture capital and private equity communities at all levels of government, to maintain high professional standards, facilitate networking opportunities and to provide research data and professional development for its members. |
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