$5.4 bln of venture capital invested in US in Q4 2008

US VC investments in the US totaled $5.4 bln during Q4 2008, according to PriceWaterhouseCoopers, the National Venture Capital Association and Thomson Reuters. This compares to the $8.1 bln invested in Q4 2007 and is the lowest quarterly level of venture investments since Q1 2005. Fourth-quarter investments went to 818 companies, down from 1,051 in Q4 2007. Investments in software companies dropped to their lowest level in 10 years, as $1 bln was sunk into 194 companies. In Q4 2007, 245 software companies received $1.4 bln in investments.

73% of VCs think their revenues will stay the same or grow in 2009

Less than 20% of VC portfolio poised for exit in 2009 as IPO market recovery not seen for at least a year; M&A activity seen increasing as valuations drop. In polling 270 venture capitalists, corporate buyers and entrepreneurs, KPMG found that 73% of respondents expect their firm’s revenue to stay the same or increase in 2009. In fact, 52% expect revenue growth to increase, including 37% who predict revenue growth in excess of 10%. Only 26% see declining revenues in the year ahead. KPMG conducted the survey in collaboration with AlwaysOn, the venture capital new media organization. Venture capitalists expect the negative IPO trend to continue in 2009, with 88% of respondents expecting IPO activity to stay the same or to decline further. Additionally, 82% of venture capitalists surveyed indicated that they do not anticipate recovery in the IPO market for at least 12 months. The outlook on IPO activity has clearly impacted venture capital exit opportunities, and 80% of respondents said less than 20% of their portfolio is poised for exit in 2009.