Seed money drying up for new startups
Following on the heels of an Ernst & Young and VentureOne survey, here is the latest bad news from PricewaterhouseCoopers famed MoneyTree survey that confirms the worst fears, according to this San Jose Mercury News story:
Investments into the newest start-ups, or in companies receiving their first round of venture capital, dropping to six-year lows, according to the MoneyTree survey released Monday by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association.
The data suggests entrepreneurs starting new companies are having a harder time raising money than executives at companies a couple of years old, with a working product, and who are searching for so-called ``follow-on'' capital.
Companies receiving their first round of capital got $1.03 billion, down from $1.22 billion in the second quarter, and the lowest level since 1996. The number of such companies dropped from 214 to 159, the lowest in eight years.
The Bay Area mirrored the national trend, with only 36 companies receiving a total of $327 million in venture capital in their first rounds.