Venture Capital Investment Taking A Beating From Recession

Economists find that VC investment is down 31 percent from 2007 to 2008.


Everyone is talking about consumer spending and bank lending being down, but venture capital investment might be the greatest casualty of the recession thus far. Economists Susan Woodward and Robert Hall tally up the damage:

In the fourth quarter of 2007, $8.1 billion was invested in 850 venture deals.  In the fourth quarter of 2008, $5.6 billion was invested in 790 deals. The number of deals is not abnormally small—over the last five years, the fourth quarter has seen 750 deals on average, but the total invested is down a lot from last year.

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