I.T. Gets Same Slice Of Smaller VC Pie

Tech companies are getting about the same percentage of venture capital this year as in the past, despite a 46% decline in U.S. tech funding compared with last year.

U.S. technology companies are on track to collect about $10.4 billion in venture financing this year, compared with $19.2 billion last year, according to the Ernst & Young/VentureOne Venture Capital survey released last week. Tech companies are expected to garner about 60% of all U.S. venture capital this year, about the same as in recent years.

"People are still able to get money for good ideas,'' says Bryan Pearce, a partner at Ernst & Young. Hot areas for investment include computer security, data-center management, and business-appli- cation software.

Ernst & Young projects venture capitalists will invest about $17.5 billion in all sectors this year, a decline of 41% from last year, when they invested $29.5 billion. In 2000, VCs invested $75.8 billion, the highest amount ever.