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Venture Capital Still Poured In During Tech's Tough 2nd Quarter

August 03, 2000|From Associated Press

The second quarter proved to be a lot more sobering for the stock market than for venture capitalists.

Even as Wall Street took away the punch bowl for many tech start-ups, venture capitalists invested $17.2 billion during the three months ended June 30, according to a national survey by VentureOne, a San Francisco-based research firm that tracks the industry.

The second-quarter activity marked a 6% decline from the $18.2 billion that VentureOne said was invested during the first quarter.

Venture capitalists are funding start-ups far more freely than a year ago. In the second quarter of 1999, venture capitalists invested $8.1 billion nationwide, VentureOne said.

The $35.4 billion invested by venture capitalists midway through the year nearly surpassed the $37.3 billion invested in all of 1999, VentureOne said.

In the second quarter, many young tech companies, recipients of most venture capital, lost favor in the stock market. The technology-driven Nasdaq index suffered a 13% loss in the quarter.

Yet venture capitalists poured $10.1 billion into information technology companies in the second quarter, VentureOne said, even more than the $9.2 billion invested in the sector during the first three months of the year.

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