VC Funds Caught Between a Rock and a Hard Place

Venture Capital firms continued to struggle to return cash to investors raising concerns about the long-term prospects of obtaining funding from limited partners. The 10-year return, the best gauge for success, fell to -4.2 percent, down from 14.3 percent a year ago, according to the NVCA.

IPO, M&A Boosting Venture Capital Fortunes

Venture capital industry is seeing a return of the good times thanks to growing number number of exits, according to data from NVCA, during Q3 2010, there were 104 mergers and 14 IPOs of venture backed companies. And the trend will continue through 2010.

Seed-Stage Investments Jump Sharply in Q2 2010

New data from National Venture Capital Association shows a sharp increase in seed- and early-stage companies. 429 such deals accounted for $2.3 billion in new investments during the quarter, up 32 percent from 325 deals in the first quarter of 2010.

Come See the Incredible, Shrinking VC Industry!

New data just released by National Venture Capital Association (NVCA) and Thomson Reuters shows that the VC industry is starting to shrink with some rapidity. In Q2 of 2010, new money committed to venture funds plunged 49 percent from Q1.

What You Should Be Reading Today

Every weekend, I try to collate some of the best posts and articles I’ve read on the web and share them with all of you, but for the past few weeks I’ve been remiss in my duties. Here are some links that are worth reading.

Hiring Picks Up at Venture-backed Startups

Hiring at venture-backed startups picked up speed in the first quarter, according to figures released by the National Venture Capital Association and job board A total of 13,314 jobs were posted by startups in the first quarter, up 16 percent since the end of 2009.

Let’s Create a New Tech Startup Myth

The NVCA today released data that confirms what we’ve known for a while: without 1999’s fat exits, venture industry returns are suffering. As a result, capital will become scarce, which could make it the perfect time to change how we view technology startups.

As VC Industry Shrinks, First-Time Investments Plummet

It’s been suggested that the venture capital industry needs to shrink to as little as half its former size, and new data from the National Venture Capital Association shows that it’s almost there — with some evidence suggesting that further contraction is in order.

Are VCs Divorced From Reality?

The NVCA today released predictions for the coming year that appear to embody the kind of cognitive dissonance one sees in a person with Stockholm Syndrome. The surveyed members of the NVCA predict a smaller industry but remain unusually optimistic about investment dollars and staffing levels.

Dwindling Tech IPOs Could Spell Bad News for Cleantech Exits

Industry watchers have been predicting – and companies have been eagerly awaiting – the return of tech IPOs for months. A123Systems’ successful IPO last week set off a new flurry of those forecasts, with many seeing it as a sign of more offerings to come, and a new break through for cleantech IPOs. But at the Renewable Energy Finance Forum West on Wednesday, Pascal Levensohn, founder of Levensohn Venture Partners and a National Venture Capitalist Association board member, called those predictions “wishful thinking.”

While he’s glad to see a few IPOs emerging, they amount to “drops of water in the desert” and are “not relevant to the majority of companies out there,” he said. “I disagree with predictions that U.S. IPOs are about to come back in a meaningful manner. Underwriters are only willing to accommodate a small number of companies.”
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