Double Take: Fourth-Quarter Private Funding Passes $2B

All right, we have a question: Wasn’t private money supposed to have dried up in the fourth quarter because of the recession? With layoffs at equity firms and reports of investors holding on to their money, all looked quite doomy and gloomy.

But the San Jose Mercury News has compiled a list of most of the venture capital activity that took place in 2008’s fourth quarter – and let’s just say, the circumstances look less shabby than we had feared. Between Oct. 1 and Dec. 31, venture capitalists pumped about $2.1 billion into apparently worthy recipients.

The biomedical, consumer goods/services and software sectors reaped the greatest benefit. The networking/telecom segment fared just OK. It pulled in $169 million, as opposed to software’s $417.8 million. Not surprisingly, in the networking and telecom group, investors were most attracted to mobility and wireless.

We don’t have an immediate apples-to-apples comparison. But to offer some context, consider that in all of 2006, telecom firms received $2.6 billion in private funds. That almost matches the fourth-quarter total for the nine sectors covered in the San Jose Mercury News chart.

Obviously telecom got nowhere near $2.6 billion in the last three months of 2008 – or even all of ’08 for that matter – but the funding seems to suggest some hope. Even though the recession is slamming American companies, investors still see promise in several fields; and they’re not abandoning their missions – they’re just being cautious like everyone else.

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