WASHINGTON, D.C. – U.S. venture capital spending fell 48 percent in the third quarter to a four-year low amid a lackluster stock market and sluggish corporate spending on software and communications equipment.
Venture capitalists invested $4.5 billion in closely held companies last quarter, down from $8.7 billion a year earlier and the lowest since $4.2 billion in the first quarter of 1998, according to a quarterly survey by PricewaterhouseCoopers and Venture Economics, in conjunction with the National Venture Capital Association.
Spending was down 85 percent from the second quarter 2000 peak of $29.1 billion. The stock market’s decline has meant venture capitalists, who funded a record number of new enterprises during the Internet boom, can no longer cash out quickly through public stock sales to move on to new investments.
Robert Grady, a managing director and head of U.S. venture capital at Washington-based Carlyle Group Inc., said on a conference call with reporters that VC investors assume they’re going to be working with companies and holding them as investments for five years. He said that expectation makes firms reluctant to pay up for stakes in companies initially or to make too many bets at one time, depressing industry spending.
Infinite Group loses key
government contract
WARWICK – Infinite Group said recently that the federal government has terminated its Defense Advanced Research Projects Agency (DARPA) contract for the research and development of laser technologies. The Warwick firm said the company plans to continue R&D on its own.
Infinite entered a two-year DARPA contract in February, valued at approximately $12 million. As of June 30, Infinite says it had billed the government about $2 million for its R&D efforts under the contract. Incremental billings occurred during the third quarter as well, the company said.
Clifford G. Brockmyre, Infinite Group’s chief executive officer, said the contract termination “creates challenges” for the company, which late last month reshuffled its management team. He said the company would continue to develop its laser diode technologies for commercial and military applications.
Infinite Group is a provider of laser material processing, advanced manufacturing methods, and laser and photonics technology.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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