First-quarter total of $507.6 million is the lowest amount raised since the second quarter of 2009 and underscores the venture-capital industry’s struggles nationwide.
By Walter Hamilton, Los Angeles Times
April 19, 2013
Southern California is a hotbed of young and innovative companies, but you wouldn’t know it by following the money.
Venture capital funding, the lifeblood of start-ups, has fallen sharply in the region this year, according to a report released Thursday.
Southern California companies raised $507.6 million from venture-capital investors in the first three months of the year, a 42% decline from the nearly $880 million in the first quarter of 2012. The data were compiled by Dow Jones VentureSource.
It’s the lowest total for any period since the $507 million registered in the second quarter of 2009, just as the stock market was bottoming out from the global financial crisis.
The numbers are a microcosm of the venture capital industry’s struggles nationwide, but many experts said they paint an overly downbeat picture of Southern California.
In the red-hot technology sector, for example, funding for Southland companies jumped 35% to $161.7 million, according to the report.
“I don’t think it’s as gloomy as [the report] suggests,” said Jeff Grabow head of West Coast venture capital for Ernst & Young.
To read entire story, click here.