Venture Capital Investment Shrivels To A 12 Year Low

PriceWaterhouseCoopers, the National Venture Capital Association and Thomson Reuters, released bleak first quarter data on venture capital investment. Investment activity is down 61% from a year ago, with $3 billion spent to fund 549 deals this year versus, $7.7 billion spent on 997 deal in Q1 08.

This is a twelve year low for venture capital investment, with every major industry sector seeing double digit declines. Software received the most money with $614 million in funding, though that was a 53% drop from the year prior. Cleantech was hit hard with investment falling a jaw dropping 86% year over year from $1.141 billion in Q108 to $154 million in Q109.

Even from the quarter prior, things look atrocious. Software experienced a 42% drop from Q408 to Q109, Clean Tech had a 84% drop from the previous quarter. Internet specific investment dropped 31% from a quarter prior to $556 million.

“Venture capitalists have slowed their investment pace in order to work with existing companies that are not able to exit the venture portfolio due to the shuttered IPO window and the weakening acquisitions market,” says Mark Heesen, president of the NVCA , via the release. As depressing as this all looks, Heesen thinks he smells a bottom, saying “We would expect a mild and steady increase in investment throughout the rest of the year, particularly if the exit pipeline is allowed to clear.”


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