Friday, January 12, 2007
VC Capital Growing
"For venture capital, it is starting to look a lot like the late 90s.
According to calculations from Ernst & Young (EY), worldwide investments will top $32 billion in 2006, the highest annual total in five years.
EY estimates that venture capital activity in the United States, Europe, China and Israel reached $25.4 billion in the first three quarters of this year, and an additional $7 billion is expected in the fourth quarter.
While the activity totals less than in the peak years of the dot-com boom, it nevertheless represents a strong comeback. (Globally, VC investment reached $51.22 billion in 2002.)
Perhaps investors are still giddy (or greedy) over the news, earlier this year, that Sequoia Capital made a reported $480 million profit after less than a year by investing in YouTube, the video-sharing site sold to Google.
"The new wave of venture capital investments around the globe, particularly at the early stage, has been driven by a number of factors," said Gil Forer of EY. "First, demand for innovation in sectors such as Web 2.0, cleantech and biotechnology is increasing in both mature and emerging markets."
Despite the large amount of money in play, however, the volume of deals is expected to be less than last year, 2005, when 3,931 were completed."
"For venture capital, it is starting to look a lot like the late 90s.
According to calculations from Ernst & Young (EY), worldwide investments will top $32 billion in 2006, the highest annual total in five years.
EY estimates that venture capital activity in the United States, Europe, China and Israel reached $25.4 billion in the first three quarters of this year, and an additional $7 billion is expected in the fourth quarter.
While the activity totals less than in the peak years of the dot-com boom, it nevertheless represents a strong comeback. (Globally, VC investment reached $51.22 billion in 2002.)
Perhaps investors are still giddy (or greedy) over the news, earlier this year, that Sequoia Capital made a reported $480 million profit after less than a year by investing in YouTube, the video-sharing site sold to Google.
"The new wave of venture capital investments around the globe, particularly at the early stage, has been driven by a number of factors," said Gil Forer of EY. "First, demand for innovation in sectors such as Web 2.0, cleantech and biotechnology is increasing in both mature and emerging markets."
Despite the large amount of money in play, however, the volume of deals is expected to be less than last year, 2005, when 3,931 were completed."
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