Technology Leads VC Investments Past $4B Mark

As Wall Street waited for the Dow to top 10,000, venture capital investments were also reaching a new high, according to the latest PricewaterhouseCoopers Money Tree Survey. Venture-backed investments rose to a record $4.286 billion during the first quarter of 1999, a 41 percent increase over the first quarter of 1998. The survey's previous record of $3.77 billion was set during the third quarter of last year.

The survey results for the first quarter of 1999 reflect venture capital investors' growing concentration on technology-based companies. Technology firms -- defined as companies involved in biotechnology, communications, computers & peripherals, electronics, environment, medical devices, semiconductors, software and information -- and Internet-based firms captured 84 percent of the first quarter's total venture capital investments and rose 63 percent over the technology sector's results for the first quarter of last year. Investments in non-technology decreased by 18 percent compared to 12 months ago.

The $1.84 billion invested in Internet-related companies, which cut across all industrial sectors, was more than triple the first quarter 1998 total. The number of Internet firms receiving investments more than doubled to 236.

In all, 462 venture capitalists responded to the survey, funding 722 companies during the first quarter of 1999, up 7 percent from a year ago.

Silicon Valley's dominance of the nation's venture capital market grew as $1.73 billion poured into companies in that region. The New England region reported investments of $554 million. Only three other regions-- New York Metro, Los Angeles/Orange County, and the Pacific Northwest-- had investments totaling more than $250 million. Projects with Internet-based companies represented 75 percent of the total for the New York Metro region, two-thirds of the venture capital activity reported in Texas, and one-half of the investments for the Pacific Northwest.

The accompanying table reflects the survey results by state. Details of the Pricewaterhouse-Coopers Money Tree survey and the individual venture capital investments reported can be found on the company's website at http://204.198.129.80 

State No. of Deals Dollars Invested (millions) California 280 2,173 Silicon Valley 212 1,727 Los Angeles/Orange Co. 43 283 San Diego 21 137 Sacramento/Northern CA 4 26 Massachusetts 88 477 New York 29 277 Washington (state) 33 225 Texas 37 174 Pennsylvania 20 116 Florida 17 101 New Jersey 17 100 Colorado 17 85 North Carolina 14 77 Virginia 17 60 New Hampshire 10 48 Illinois 11 42 Georgia 16 42 Minnesota 15 41 Connecticut 11 37 Oregon 4 33 Ohio 10 29 Utah 10 21 Maryland 9 19 Missouri 5 17 Tennessee 6 16 Arizona 5 11 Vermont 2 11 Kentucky 5 10 Washington, DC 2 10 Arkansas 2 7 South Carolina 1 6 Louisiana 2 5 Mississippi 1 3 Indiana 4 3 Michigan 7 2 Nebraska 1 2 Alabama 3 2 Delaware 2 2 Nevada 2 2 New Mexico 1 1 Hawaii 1 0.5 Wisconsin 3 0.5 Oklahoma 1 0.3 Montana 1 0.2 Total 722 4,286