Expect to toil
Chilled by economic woe, fundraising efforts by US venture capitalists fell 71% in 4Q08, reports Forbes.
Startups court venture capital (VC) funding in order to raise large amounts of money quickly enough to jump-start a new business. In exchange for the cash, VCs take a stake of the business itself, expecting to profit once the firm goes public or is sold.
In the quarter ending December 31, 2008, only $3.4 billion was raised from venture capitalist investors, compared to $11.7 billion during the same period in 2007, however.
US-based venture capital firms drew less than $28 billion, down 21.4% from the $35.5 billion raised the year prior, for all of 2008. It is likely that what funds get spent in '09 will go to the health and tech industries.
In 2007, funding for the so-called "web 2.0" industry leaped 88%, with funds to social network Facebook accounting for 22% of that. Even then, deal growth had begun to slow.
