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Number Of New Investors In Venture Deals Is Dropping

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Another gloomy metric for companies looking to raise new funds. Not only has the total number of venture-capital deals shrunk, the majority of the deals that are taking place are being funded entirely by existing investors. Citing VentureSource numbers, the WSJ reports that 57 percent of venture-capital deals during the first quarter were funded by existing investors, up from 44 percent a year ago. Why does that matter? As the WSJ notes, it shows that VCs are using their capital to shore up companies already in their portfolios to help them through the downturn, rather than investing in new startups.

2 Responses to “Number Of New Investors In Venture Deals Is Dropping”

  1. Veteran (existing) venturers are really more aggressive compared to new investors. Their experiences and business knowledge help them decide, whether they will acquire other companies or not. Usefulness of the acquired (potential) company to their existing company must be taken into consideration. Otherwise, it would be very hard for them to maximize their operation as a group.

  2. Ive seen this as a common theme within our affiliate industry, i have been struggling to raise funds for a number of projects requiring venture captail. Especially with twitter related development projects.

    Tom Dealsey