Slowdown in Venture Capital Investments since summer

In its new monthly report the Go4venture team assesses the development in 2011: “As we’ve watched 2011 unfold, we have noticed a slowdown since summer – even if we are going to finish 2011 well ahead of 2010 (currently +15% on a year-to-date basis, but it was well over +30% earlier in the year).”

But more important are the predictions for 2012. The report says ”so far the effect on funding levels is still modest, in part because the performance of portfolio companies hasn’t been impacted too badly up to now. But as companies ready their budgets for 2012, prudence is a must, which by definition will result in more modest growth next year. In short, the recessionary environment is becoming self-fulfilling. And companies which would have been financed in 2011 may bite the dust next year instead.”

But nevertheless the authors see reasons to be hopeful, at least for some companies in some industries. Investors will give priority to companies with traction led by serial entrepreneurs. Preferred industries will be internet, Software-as-a-Service, Medtech, where it saves money for healthcare systems, and of course Cleantech, where it saves money for the value chain.