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Venture Capital Drought Worst Since 2003

Few sales and IPOs mean less payoff in the business of betting on startups

By JACKSON WEST
Updated 3:30 PM PST, Wed, Jul 1, 2009

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Times are tough on Sand Hill Road. Well, not tough so much as awkward.
dmarino / Flickr

Venture-backed liquidity was down this quarter, and less than half what it was in the same quarter last year.

Venture capital firms fund companies in exchange for a stake in the business, and realize their gains when a company is sold or goes public.

While a venture-backed company did go public, ending a nine-month dry spell, acquisitions are also down.

The fall seems to correlate with lower sale prices for acquired startups.

The median price for venture-backed businesses was $22 million, compared to $41 million for the same period last year.

Photo by Flickr user dmarino.

Jackson West figures that if Twitter sells at its asking price, the gold rush is back on.

Copyright NBC Local Media
First Published: Jul 1, 2009 1:13 PM PST

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