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Ray of Hope?

VCs are optimistic about the coming year but are still holding on to their purse strings.

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This story appears in the May 2003 issue of Entrepreneur. Subscribe »

Could it be? Is the light at the end of the long, dark venture capital tunnel finally flickering? It's hard to say, given that VC experts have optimistically speculated, with each quarter's decline in investing, that the industry had finally hit bottom. Unfortunately, the loud thud was never quite heard.

But recent numbers offer more fodder for those taking the optimistic view. After nine quarters of decline, venture investing in the fourth quarter of 2002 finished nearly flat from the prior quarter, according to the latest MoneyTree survey from PricewaterhouseCoopers (PwC), Venture Economics and the National Venture Capital Association. The dollars invested declined from last quarter by only $300 million to $4.2 billion, while the number of entrepreneurs funded--692--was up from 671.

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