| Venture capital decline abates
in 4Q 2002
State Science and Technology Institute
January 31, 2003
The steady decline of venture capital abated in the fourth quarter of
2002 with total investments of $4.2 billion, essentially flat from the
prior quarter of $4.5 billion, according to the PricewaterhouseCoopers/Venture
Economics/National Venture Capital Association MoneyTree Survey. A total
of 692 companies received funding in the fourth quarter compared to 671
companies in the third quarter.
Venture capital investing has continued to decline since the run-up that
peaked in 2000. For all of 2002, venture investing totaled $21.2 billion,
approximately half of 2001's $41.3 billion. Investment levels in 2002 were
similar to 1998, when $21.6 billion went to entrepreneurs.
As it was for all of 2002, the life sciences sector remained the bright
spot for the fourth quarter, increasing 15 percent over the prior quarter
with $960 million in investments. Life sciences totaled $4.7 billion for
all of 2002, accounting for 22 percent of all venture capital investing.
The biotechnology and medical devices industries attracted $2.8 billion
and $1.9 billion, respectively, in 2002.
All other major industries experienced declines for the quarter and the
year. Software, perennially the leading industry category, maintained its
ranking in 2002 with 799 deals attracting $4.3 billion, or 20 percent of
all venture investing. Telecommunications followed with 335 deals accounting
for $2.9 billion, or 14 percent of the annual total.
The State
Science and Technology Institute (SSTI) has prepared a state-by-state
table that presents the MoneyTree™ results
for 2002. The table reveals that five Maine companies received a total
of $11.9 million in 2002. Two of the deals totaling $500,000 occurred in
the 4th quarter, while two deals occurred in the second quarter and one
deal occurred in the first quarter.
Thanks go
to Cindy Cieluch of Porter Novelli Austin for supplying SSTI with the
data found
in the table. The fourth quarter MoneyTree™ survey
results will be available on February 14, 2003 at three Web sites: PricewaterhouseCoopers,
National Venture Capital Association,
and Venture Economics. | 
