Subscribe to Entrepreneur for $5
Subscribe

Springing Back

It's not a mirage. The end to the long VC investment dry spell is within your reach.

By
This story appears in the May 2002 issue of Entrepreneur. Subscribe »

After 18 months of steadily declining venture capital investment--and ever-gloomier forecasts for the foreseeable future--entrepreneurs may finally have a good reason to hope for better times. For the first time since mid-2000, VC investment rose modestly in the fourth quarter of 2001 to $7.1 billion, according to the PricewaterhouseCoopers (PwC) "MoneyTree Survey," in partnership with VentureOne and the National Venture Capital Association (NVCA).

Overall, VC investing for 2001 was still drastically behind the previous year's capital free-for-all-down from $99.6 billion to $36.5 billion. But Kirk Walden, national director of venture capital research for PwC, says 1999 and 2000 were anomalies in VC history, representing investment levels historically unprecedented and completely unsustainable. He points out that in 1998, just before the dotcom balloon swelled to full size, VC investing had reached $19.2 billion. "If you take the Internet bubble out, you almost double the historical precedent," says Walden. "That's a healthy level of investment."

Memorial Day Subscription Sale- Unlock this subscriber exclusive article and more for 20% off today.

Access all Entrepreneur content with no ads, unlock discounts, and get exclusive advice only available to our subscribers. Plus, our magazine delivered straight to your door.

Get a year subscription today for 20% off. Just use code SAVE20 at checkout.

Entrepreneur Editors' Picks