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Friday, April 30, 2004
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Entrepreneurs Make Money Last Longer
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According to a quarterly MoneyTree Survey for the first quarter of 2004, average time between venture capital rounds for late-stage companies increased to 15.7 months compared to 11.9 months for the same period in 2002. Expansion-stage companies extended their average funding interval to 15.5 months. Two years ago it stood at 12.2 months.
Early-stage companies seemed to buck the trend. Their average time between rounds fell to 11.9 months from an earlier 12.4. However, this was a 4% decrease compared to the 31% increase for late-stage and 27% increase for expansion-stage companies.
What a change from the glory -- or should we say gory -- days of the dotcom boom, when startups would brag about their incendiary burn rate.
Venture capital investments in the first quarter of 2004 totaled $4.6 billion. This was below the $5.2 billion in Q4 of 2003 but above the $4.2 billion invested in Q1 of that year. Over the past seven quarters venture capital investments have fluctuated between $4.2 and $5.2 billion.
Highlights of the Venture Capital Report, put together by PricewaterhouseCoopers, Thomson Venture Economics, and the National Venture Capital Association, can be found on the MoneyTree site.
This report tells us that venture capital is flowing at a steady rate. While we'd all like to see it on a steady increase, the good news is that it's not dropping. More apparent good news seems to lie in the fact that, in general, startups are making their investments last longer. However hidden in that fact is a question the report leaves unanswered. Are they making investments go further because they're being smarter with money, or are they having to stretch dollars at the expense of progress because additional funding isn't available?
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By Anonymous | Permalink |
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More news... more trends... more insight... |
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