Liz Gannes

Recent Posts by Liz Gannes

2012 VC Investments Off 10 Percent, Dragged Down by Biotech and Cleantech

The rental prices in San Francisco and the traffic on 101 might give you the feeling the tech industry is in a bubble period, yet again.

bubbleBut not everything in tech is healthy. U.S. venture capital just had a down year, for one thing. That’s in large part because dollars dedicated to new funding in biotech and cleantech fell significantly in 2012.

Overall, VCs put $26.5 billion in 3,698 U.S. deals in 2012, a decrease of 10 percent, according to the new MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association (NVCA).

Biotech investment dollars dropped 15 percent in 2012; cleantech investments, 28 percent. There were fewer first-time fundings for biotech and medical device startups than any year since 1995.

Still, venture capital was flowing quite normally to software companies. Not only was that the single largest investment sector in 2012, investments grew 10 percent to $8.3 billion, an 11-year high.

If you slice all the categories, including those above, to look at companies whose businesses are on the Internet (that’s 25 percent of total U.S. venture capital dollars), investments were down 5 percent to $6.7 billion.

Still, 2011 had been a record year for Internet funding, so that’s the second-highest total since 2001.


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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work