During the third quarter of 2000, $25.9 billion was invested in 1,774 companies according to Venture Economics and the National Venture Capital Association. That was slightly lower than the $27.8 billion and $27.8 billion recorded for the prior two quarters of 2000.
Of the third quarter totals, Internet related companies continued to attract a significant 44.55% of the funding, roughly the same as the 45.18% a year ago, despite a $4.4 billion drop-off in funding for the category. On the other hand, communications companies drew 18% of the quarter’s funding, up 25.7% from the second quarter, and over 44% higher than a year ago.
Lower returns and less demand for initial public offerings (IPOs) are reportedly contributing to the slackening level of investment. Venture returns fell to 3.9% in the second quarter – lowest since 1991, while the $26 billion raised in IPOs during the quarter was the first time below $30 billion in a year.
– Nevin Adams email@example.com