Two interesting reports on venture capital last week. The first shows venture capital returns hitting their highest point since 1999, and the second says venture capital investment fell last quarter for the first time in years.

The good news comes from Don Dodge in Venture Capital Returns in 2007 best since 1999, which he posted on his blog at Microsoft Startup Zone. Here are his numbers:

Investments

Returns

Year

VCs

M&A

IPO

2001

$32.1

$16.8

$3.5

2002

$22.1

$7.9

$2.1

2003

$19.6

$7.7

$2.0

2004

$22.4

$15.4

$11.0

2005

$23.7

$16.0

$4.5

2006

$25.5

$17.1

$5.1

2007

$29.4

$25.4

$10.3

Totals

$174.8

$106.3

$38.5

He concludes:

There is a popular refrain heard around Silicon Valley “Party like its 1999”. From an investment return perspective it is a lot like 1999. The difference, I hope, is that the stock market is not in a similar bubble condition.

The bad news is from Dow Jones Venturesource. I picked it up from Sunday’s San Francisco Chronicle, in a story by Deborah Gage: Venture capitalists cut back 7 percent nationally last quarter. She also highlighted the good news for the local coverage, which was a 10 percent increase in investments in the San Francisco Bay area.

The actual numbers were $6.84 billion invested last quarter, compared with $7.35 billion in the same period of 2007. That was on 603 deals this year, 628 deals last year.

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Tim BerryTim Berry
Tim Berry

Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.