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ENTREPRENEURIAL INVESTMENT REBOUNDS IN 1992: FUNDING OF HEALTHCARE AND SOFTWARE COMPANIES GROWS MOST RAPIDLY

 SAN FRANCISCO, May 24 /PRNewswire/ -- Venture capital funding of entrepreneurial companies increased 14 percent to $3.2 billion last year, according to the 1992 Entrepreneurial Investment Report released today by VentureOne, a San Francisco-based research firm. Reversing a previous trend, startup investment rebounded to $808 million in 1992, a 50-percent increase over the $534 million invested in 1991.
 "Like the American economy, it appears that venture capital disbursements hit bottom in 1991," said David Gleba, president of VentureOne. "While a recovery appears to be in progress, the venture capital industry, however, is still much smaller that it was in the 1980s. Today, venture capitalists are only able to fund the most qualified entrepreneurs pursuing the largest market opportunities."
 Investor interest in entrepreneurial healthcare and software companies grew most rapidly in 1992, according to the VentureOne report. Medical companies received $1.2 billion in funding, up 26 percent from the $965 million invested in 1991. Software companies received $466 million last year, a 25-percent increase over the $373 million invested during 1991. Conversely, investments in electronics and computer hardware continued to decline, from $401 million in 1991, to $315 million last year. "As many hardware markets turn into commodity businesses, investor interest has shifted to software companies with unique products," observed VentureOne's Gleba.
 Despite the rebound in startups, later-stage investing still comprised the bulk of 1992's entrepreneurial investment. Second and later-stage financing accounted for $2.1 billion last year, a modest 11-percent increase over the 1991 total of $1.9 billion. "The record initial public offering market of 1992 fueled the startup resurgence by making funds previously reserved available for investment in new portfolio companies," explained Gleba.
 "Venture capital funds are increasingly concentrated in the hands of fewer, more experienced managers," commented Gleba. "Venture capital is returning to its traditional emphasis on early-stage, technology- oriented investments."
 -0- 5/24/93
 /NOTE TO EDITORS: The complete 10-page Entrepreneurial Investment Report is available from Venture One./
 /CONTACT: David Gleba or Christina Kramlich of VentureOne, 415-621-1200/


CO: VentureOne ST: California IN: SU: ECO

TM-GT -- SF003 -- 1499 05/24/93 07:50 EDT
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Date:May 24, 1993
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