Startup valuations not hit bottom yet
Median valuations for venture-backed start-ups fell [reports the San Jose Mercury News] to $10.6 million in the first half of 2002, which is about where they were in 1996, according to VentureOne, a venture capital research firm. That's much lower than the peak of $29.9 million in the first quarter of 2000.
...But if you look at start-ups funded after the crash, the median ``seed-round'' deal was $3.2 million. That's much lower than the peak of $5 million in 2000, but still higher than 1995's median of $1.8 million. So we're not rock bottom yet.
...But the bigger firms are now returning to their roots, and investing smaller amounts too. Charles River Ventures' Ted Dintersmith says his firm made six investments of about $250,000 over the past year. Vinod Khosla, of Kleiner Perkins Caufield & Byers, says his investments are averaging about $1 million.
True, many ``angel'' investors -- who specialized in giving budding entrepreneurs $1 million or less -- have fled the scene...But other angels are still anointing start-ups at the same old rate: Ram Shriram, who runs Saratoga angel group Sherpalo, helped seed Internet search engine Google in 1998. He's made two new investments this year, or around the same pace he has in the past.