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Venture Capital Exits Are Down

Published: 4/2/2008 10:44:05 AM

For a few years now the venture capital community has been buoyed by the M&A market, which has taken up the slack left by the lackluster IPO environment for venture-backed technology companies.

Preliminary data from the just-ended first quarter 2008 is showing a significant drop in M&A exits as well.  VentureDeal will be reporting on the quarter's activity in due course, but the data clearly suggests that even the technology sector is not immune from the credit crunch and resulting fallout.

How long will it last?  I don't have a crystal ball, but past real-estate driven recessions have typically lasted longer than usual, due to the longer time that it takes to process the bad loans related to real property, foreclosures and the like.

Of course, time will tell, and I'm generally impressed by the speed at which the Federal Reserve has reacted.  I'm also encouraged by Congressional rumblings to take action - perhaps we're lucky that the downturn is happening in an election year - it tends to prod our representatives into moving much more quickly.  Let's hope they make the right moves.

Don Jones

VentureDeal

 

Don Jones
CEO, VentureDeal

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