Big drop in venture capital funding in Q1 2012

Venture capital funding in the first quarter 2012 really dropped. I was assuming this was because of a big decrease in later stage investing, but that’s not the case. In fact, later stage venture investing was up 11% in Q1.

peHUB has a very good guest post from a VC on the funding drop. Below is a chart showing the rise and the fall of venture fund investments in the US over the years.

The peHUB piece has a very interesting quote on seed investing:

  “End of the Great Seed Experiment” which is something I have been saying for the better part of a year – there was only $141MM invested in 53 deals in 1Q12 (admittedly I think that number is under-reported) as compared to $156MM and 90 deals in 4Q11 and strikingly to the $211MM and 86 deals in 1Q11. I have been on this thread for some time; that is, the VC industry is at risk of having created too many “me too” companies, and with less capital to invest across the board, many seed entrepreneurs will be deeply saddened when they come back to market for their Early round…

Author: Healy Jones

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