Useful Stats: 4th Quarter VC Data by State

The steady decline of venture capital abated in the fourth quarter of 2002 with total investments of $4.2 billion, essentially flat from the prior quarter of $4.5 billion, according to the PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTree Survey. A total of 692 companies received funding in the fourth quarter compared to 671 companies in the third quarter.

Venture capital investing has continued to decline since the run-up that peaked in 2000. For all of 2002, venture investing totaled $21.2 billion, approximately half of 2001's $41.3 billion. Investment levels in 2002 were similar to 1998, when $21.6 billion went to entrepreneurs.

As it was for all of 2002, the life sciences sector remained the bright spot for the fourth quarter, increasing 15 percent over the prior quarter with $960 million in investments. Life sciences totaled $4.7 billion for all of 2002, accounting for 22 percent of all venture capital investing. The biotechnology and medical devices industries attracted $2.8 billion and $1.9 billion, respectively, in 2002.

All other major industries experienced declines for the quarter and the year. Software, perennially the leading industry category, maintained its ranking in 2002 with 799 deals attracting $4.3 billion, or 20 percent of all venture investing. Telecommunications followed with 335 deals accounting for $2.9 billion, or 14 percent of the annual total.

SSTI has prepared a state-by-state table <http://www.ssti.org/Digest/Tables/013103t.htm> to present the MoneyTree™ results for 2002. Data for the number of deals and the total amount invested per quarter, as well as aggregate totals, are included in the table.

Thanks go to Cindy Cieluch of Porter Novelli Austin for supplying SSTI with the data found in the table. The fourth quarter MoneyTree™ survey results will be available on February 14, 2003 at three websites:

http://www.pwcmoneytree.com, http://www.nvca.org, and http://www.ventureeconomics.com.