More on Funding and M&A and IPO Exits

written by David A. Broadwin

With reference to IPOs and exits, TechCrunch had the following to say: 

So far the downward spiral of credit and financial markets seems to have left venture capital firms and startups relatively unharmed. Even though the IPO market closed completely in the second quarter (and opened again only slightly in the third), venture capital firms continue to raise money and invest in startups at a healthy pace. During the first half of the year, venture capital firms raised about $16 billion in 141 funds and invested about $15 billion in nearly 2,000 deals.

and this:

On top of that, the exit environment for existing startups is not looking any better. A new MoneyTree report by PricewaterhouseCoopers that is out today notes that both the number of IPOs and M&A exits for startups declined precipitously:

While I agree completely with the conclusions on the number of M&A and IPO exits, our research is not consistent with what TechCrunch (and PWC/MoneyTree -- which is where TechCrunch gets its data) has to say about the pace of investment in startups. 

A more focused look at numbers shows a different picture. Based upon searches of the Dow Jones VentureSource focused on Series A financings and Series B and later round financings in New England and the country as a whole, there appears to be a decline in venture investing in 2008 compared to 2007 (see EEC Perspectives).