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1st Quarter VC Figures Released; 4th Quarter 2000 State Stats Available

May 04, 2001
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Venture capital (VC) investments for the first quarter of 2001 totaled $10.1 billion, a staggering 40 percent less than the previous quarter, according to the latest Moneytree™ survey prepared by PricewaterhouseCoopers in partnership with VentureOne. Although VC investment now has declined steadily in each of the four quarters since the peak in the first quarter of 2000, the latest results mark the greatest quarter-to-quarter decrease in absolute dollar terms since the survey started.

While the figures of a separate survey released this week by the National Venture Capital Association (NVCA) and Venture Economics reported higher totals for the two most recent quarters, the decline between quarters of 42 percent is consistent with the Moneytree™ results. NVCA reported first quarter 2001 venture capital activity totaled $11.7 billion compared to $20.5 billion for the final quarter of 2000.

According to the PricewaterhouseCooper’s website, seed and first round financings were hit hardest: both deal flow and the amount raised were at approximately half the level of fourth quarter 2000.

Seed and angel investments are areas most often targeted by public programs and investment tax incentives. The need for such public programs in regions less successful in attracting VC may be increasing as seed and first round investment represented only 24 percent of the venture capital dollars invested during the most recent quarter.

Virtually all industries experienced a decline in the Moneytree™ survey results, with sectors such as Consumer & Business Services, Electronics & Computer Hardware and Semiconductors falling 50 percent or more. Even the Communications and Biopharmaceuticals segments-which had maintained fairly steady levels of venture investment throughout the past year-were not immune to the quarter's malaise. They saw losses of 38 percent and 37 percent, respectively, in equity investment.

Statistics from the Moneytree™ survey for the fourth quarter of 2000 are now available on the PricewaterhouseCooper website. The quarter’s total of $16.7 billion includes a $600 million “correction” as PricewaterhouseCoopers and VentureOne consolidated their files.

As a service to Digest readers, SSTI has prepared the accompanying summary table presenting the information by state. No investments were reported in states omitted from the table. For ease of comparison and use, links to previous summary tables for 1997-2000 are also provided on the webpage containing the 2001 table: http://www.ssti.org/Digest/Tables/050301t.htm

 

Statistics from the survey of first quarter 2001 VC activity will be posted on the PricewaterhouseCooper’s website in early June. Once available, the SSTI Weekly Digest will produce a state-by-state table.

More information on the Moneytree™ survey can be found at: http://204.198.129.80/index.asp

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