Venture-capital investors, apparently spooked by declining returns over the past ten years, raised less money for investment in early- and mid-stage startups in 2010 and flocked to late-stage startups.
Funding available for startups was down 14 percent in 2010, to $11.6 billion, from $13.5 billion in 2009, according to a report by Dow Jones. 119 funds raised money for investing in startups last year, compared to 133 funds in 2009.
Despite some positive activity in the exit market, it looks like investors are still less willing to take significant risks on early- and mid-stage startups that haven’t found some significant traction yet. Exit activity was up 25 percent in 2010 when compared to 2009, but the average size of each exit was lower than what was paid out before the recession began in earnest in 2008.
To read the full, original article click on this link: Who’s afraid of young startups? An increasing number of venture capitalists | VentureBeat
Author: Matthew Lynley
