Newark, N.J. -- U.S. venture capital investments and fundraising slowed dramatically in the third quarter, with only $7.7 billion being invested in 873 companies compared to $11.1 billion in 1,021 firms during Q2, said a new report issued by Venture Economics and the National Venture Capital Association.
While venture capital investments fell 31% sequentially from the second quarter, Q3 fundraising by venture funds dropped 37% to $6.2 billion from $9.9 billion in the prior quarter, the report said. Last year in the third quarter, venture funds raised $27.6 billion.
Venture capital investments in semiconductor and other related electronics companies totaled $818.23 million in the third quarter. That total was 62% lower than $2.15 billion in Q3 2000. A year ago, 92 companies in this category received venture capital investments, while 54 were funded this year in the third quarter, according to the report.
Investments in Internet specific companies plunged 82% from $11.54 billion in the third quarter of 2000 to $2.08 billion in Q3 this year, the report said. In the third quarter last year, 761 Internet companies received investments from venture capitalists while 270 were funded this year in Q3.
During the first three quarters of 2001, venture capitalists raised $34 billion, putting this year on track to be the third-highest year for VC fundraising, according to Venture Economics and the NVCA trade group. As of Sept. 30, the amount of venture capital raised by venture firms but not yet invested (called "overhang") was $45 billion, said Venture Economics and the NVCA group.
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