Young, emerging growth companies looking to venture capital firms as an alternative to more traditional debt financing sources may experience stiffer competition.
VC investments declined for the first time in three years, according to a recentMoneyTree Report by PricewaterhouseCoopers LLP and the National Venture Capital Association (NVCA).
Overall, venture capitalists invested $26.5 billion in 3,698 deals in 2012, a decrease of 10 percent in dollars and 6 percent in deals over the previous year. The clean technology and life sciences sectors experienced the greatest drop off. Meanwhile, the software sector remained strong in 2012, with venture funding increasing 10 percent to $8.3 billion and deals up 8 percent.
According to the report, the stage of investment also shifted from seed to early stage in 2012. Investments into seed stage companies decreased 31 percent in terms of dollars and 38 percent in deals with $725 million going into 274 companies in 2012, the lowest annual seed dollars since 2003. The trend reveals that VC firms have started engaging with companies later in their life cycle than in previous years.
The report suggests that VC firms have become more discriminating when it comes to their investments. Given the uncertain economic times, they want to make certain that the risk will pay off. Therefore, it is even more important that companies put their best foot forward in written presentations and meetings.
For more information about what venture capital firms look for in a business opportunity, please see our prior post.
If you have any questions about venture capital financing or would like to discuss how it may benefit your business, please contact me,Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Drop in Venture Capital Means More Competition for Start-Ups Seeking Funding
Author: Dan Brecher
Young, emerging growth companies looking to venture capital firms as an alternative to more traditional debt financing sources may experience stiffer competition.
VC investments declined for the first time in three years, according to a recentMoneyTree Report by PricewaterhouseCoopers LLP and the National Venture Capital Association (NVCA).
Overall, venture capitalists invested $26.5 billion in 3,698 deals in 2012, a decrease of 10 percent in dollars and 6 percent in deals over the previous year. The clean technology and life sciences sectors experienced the greatest drop off. Meanwhile, the software sector remained strong in 2012, with venture funding increasing 10 percent to $8.3 billion and deals up 8 percent.
According to the report, the stage of investment also shifted from seed to early stage in 2012. Investments into seed stage companies decreased 31 percent in terms of dollars and 38 percent in deals with $725 million going into 274 companies in 2012, the lowest annual seed dollars since 2003. The trend reveals that VC firms have started engaging with companies later in their life cycle than in previous years.
The report suggests that VC firms have become more discriminating when it comes to their investments. Given the uncertain economic times, they want to make certain that the risk will pay off. Therefore, it is even more important that companies put their best foot forward in written presentations and meetings.
For more information about what venture capital firms look for in a business opportunity, please see our prior post.
If you have any questions about venture capital financing or would like to discuss how it may benefit your business, please contact me,Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
