The first quarter of 2010 could see a higher number of investments by venture capital firms than the fourth quarter of 2009, according to figures from new reports by the National Venture Capital Association and information and data services company ChubbyBrain.
Data from a report relased by the NVCA yesterday shows that the fourth quarter of 2009 saw a growth of $1.7 billion in venture funds over the previous quarter, similar to numbers seen from Q4 2008 to Q1 2009. Data released today by ChubbyBrain shows that following the earlier growth in venture funds, Q2 2009 saw a $1.4 billion increase in VC investments, a trend that could mean big bucks for startups in the first quarter of 2010.
As we reported last week, 2009 was a difficult year for startups and venture capital firms, with venture-backed mergers and acquisitions continuing a downward trend in 2009. Carolynn Duncan, founder and director of the startup incubator Portland Ten, says that the “pressure crunch” of 2009 caused VCs to give prospective startups more than the third degree.
“It was more like the fifth degree,” Duncan told ReadWriteWeb. “It was so intense, even for the companies showing great traction and that had bootstrapped the hell out of their project.”
Duncan believes that as the new year kicks off, VCs that raised funds at the end of 2009 will be looking at a new class of startups to invest in. When asked if 2010 would be an easier year to find funding, Duncan was hesitant, but optimistic.
“I don’t think ‘easier’ is the right word, maybe just not as demanding,” she said. “People are just glad its 2010 and not 2009 anymore.”
Photo by Flickr user borman818.
