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Early Stage Funding Poised to Rebound from Q1 Dip

Venture capitalists were prudent and calculated with their investments in the first quarter of 2012. A MoneyTree Report released this morning by PricewaterhouseCoopers, the National Venture Capital Association(NVCA), and Thomson Reuters, shows declines in investments made to younger companies and an increase in money given to those in later stages. Moving forward, however, we could see this trend turn completely around.

According to the report, the total amount of money that venture capitalists spent on seed and early stage investments dropped 9 percent and 31 percent respectively.

Meanwhile “investments into companies in the Later stage of development experienced an increase, rising 11 percent and accounting for 40 percent of total dollars invested during the first quarter of 2012.”

Companies seeking capital for the first time were the hardest hit by the hesitant venture capital atmosphere. “First-time financing [...] dollars decreased 22 percent to $783 million in Q1, the third lowest level in survey history.”

Tracy Lefterhoff, global managing partner of PwC’s venture capital arm in the US, attributes these drops to “a lackluster fourth quarter in the public markets.” But she offers hope to younger companies who sought funding in Q1. “Given that we saw an improvement in the public markets during the first quarter, we could see VCs return to placing their bets on seed stage companies in the coming quarters.”

So, if your startup struggled to collect venture capital funding these past few months, don’t stop trying.  There are greener pastures ahead.

[image via andrewchenblog]

from BostInno http://bostinno.com/2012/04/20/early-stage-funding-poised-to-rebound-from-q1-...