Number Of New Investors In Venture Deals Is Dropping

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.

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