where does the venture money flow
Written by Maciej Bajkowski   
Monday, 16 July 2007

While it is important to have a great idea for a startup, it can also be of great advantage to be in the right place to obtain some of the much needed venture capital funding in order to get a new company off the ground. Thus, before setting out on the startup journey it might be a good idea to understand where the venture capital money is currently flowing. One good place to start in your research is the National Venture Capital Association (NVCA). As a matter of fact the NVCA just recently released a global venture investment trends survey that it undertook with sponsorship from Deloitte & Touche LLP. The survey reveals some interesting facts; for example, U.S. venture capitalists (VCs) have currently less than five percent of their capital invested overseas. This is mostly due to the fact that generally VCs seem to prefer to be near to companies they invest in – after all wouldn't you want to make sure that the money you have invested is being put to good use? Further, the report finds that countries which receive most money from U.S. VCs are China, India, Israel, and Canada. Obviously it should be of no surprise to anyone that China and India made the list given the amount of headlines that startups from these two countries have been getting. But what is more interesting is that VCs choose to invest in what is arguably a very unstable area over in Israel, while at the same time investing in Canada because of the stable conditions. The report also discusses regional investment preferences between U.S VCs and their European and Asian counterparts, takes a brief look at preferred investment strategies, and outlines some potential concerns that VCs have with regards to investing into foreign markets. Overall it is a very quick and easy read and definitely worth a look.

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