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Defining The Business Value Of Technology
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December 11, 2000 |
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VCs Find Plenty Of Cash For Tech Investments
Funding for this year is on track to more than double 1999's Total; wireless draws interest
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espite a nine-month decline in the Nasdaq stock index that resulted in a 52-week low earlier this month, venture capitalists specializing in the technology sector continue to raise and hand out cash at near-record levels.Two firms beefed up their venture investing last week. Nokia Venture Partners launched a $500 million fund targeting mobile Internet startups, and Intel boosted its $200 million communications fund to $500 million and broadened its networking and communications focus to include wireless.
Insight Capital Partners, meanwhile, is launching its fourth fund, which will be worth $750 million, according to Jerry Murdock, a co-founding partner. A spokeswoman for the firm says the fund's final closing is slated for early next year, and that it has begun deploying the funds. Details about the investments weren't disclosed.
"Clearly everybody in venture capital is cognizant of the current stock market. But we still think there's a place for early-stage investing," says John Malloy, a partner at Nokia Venture Partners, which for its second fund brought in outside investors, including Goldman Sachs. The investment bank was also a participant in the $1.3 billion fund closed by Weston Presidio Capital Management on Nov. 27.
VCs raised $52.8 billion in the first nine months of the year, on track to more than double the total raised in 1999, says Tracy Lefteroff, managing partner of private equity and venture capital at PricewaterhouseCoopers.
"Over the last nine months there's been a change in the sentiment on Wall Street, not a change in sentiment in Internet companies themselves," says Scott Russell, principal managing director of Softbank Venture Capital, which has $400 billion under management and averages roughly one investment a week. He says Softbank takes a long-term view. "We think it's an excellent time to invest. It's always better to make investments when others aren't."
One firm with a different point of view is Crosspoint Venture Partners, which postponed a $1 billion fund late last month, citing a congested market for initial public offerings and the inability to provide its limited partners with the returns they have come to expect.
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