Silicon Valley Sparks Renewed Interest From VCs - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Business & Finance
News
1/28/2005
02:40 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Silicon Valley Sparks Renewed Interest From VCs

Technology companies are regaining their pre-eminence with venture-capital firms, promising a continuing flow of innovation and enhancements for the IT infrastructure, according to several venture-capital reports last week.

Not only did national IT investment tick upward, but the technology cradle of the Silicon Valley saw a marked improvement. Instead of continuing a steep decline from the peak of $35 billion in 2000, investment in San Francisco Bay area technology companies regained its forward momentum in 2004. Although the Silicon Valley has experienced a decline in technology jobs, startups are being financed at a rapid clip.

VCs earmarked most of the money for Silicon Valley software, semiconductor, networking, and hardware companies, increasing their investments last year by 15% to $7.1 billion, says Doug Henton, president of Collaborative Economics, an economics consulting firm. Henton is a preparer of the Silicon Valley Index, produced for 10 years by Joint Venture, a not-for-profit organization.

On The Comeback Trail Chart

"We're back to the preboom levels," Henton says. He doesn't expect venture funding in Silicon Valley to experience another colossal spike like the one that occurred in 2000. Yet, companies receiving funds are technology innovators that have undergone a thorough review. "Instead of handing money hand over foot," he says, "we're getting better business plans."

Silicon Valley is attracting a higher proportion of venture capital today than it a decade ago. In 1995, the region represented 14% of the total; today it represents 35%.

New sources of capital for Silicon Valley ventures are coming from Washington--including NASA and the departments of Defense and Homeland Security--as federal agencies seek out advanced technologies. Henton says government IT investments reached $3.4 billion in 2003, the latest year for which figures are available, up from a little over $1 billion a year earlier.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

Commentary
New Storage Trends Promise to Help Enterprises Handle a Data Avalanche
John Edwards, Technology Journalist & Author,  4/1/2021
Slideshows
11 Things IT Professionals Wish They Knew Earlier in Their Careers
Lisa Morgan, Freelance Writer,  4/6/2021
Commentary
How to Submit a Column to InformationWeek
InformationWeek Staff 4/9/2021
Register for InformationWeek Newsletters
Video
Current Issue
Successful Strategies for Digital Transformation
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll