1. VC Funding is Shrinking

    Venture Capital funding is now contracting rapidly, and the trend isn’t going to stop anytime soon.  VCs are now sitting on the sidelines while the SEC drums up new rules for emerging growth companies and crowdfunding, as required under the JOBS Act.  That’s at least nine months away!  Thus, the short term impact of the JOBS Act appears to be continued down pressure on early-stage startups, particularly those who are in desperate need to refuel with another round of VC financing.  

    Venture capitalists, who provide money to entrepreneurs in exchange for a portion of their company, invested $5.8 billion in 758 deals in the first quarter of 2012, the MoneyTree Report found. The report, from PricewaterhouseCoopers and the National Venture Capital Association, is calculated based on data from Thomson Reuters.

    Compared to the fourth quarter of 2011, that represents a 19 percent drop from $7.1 billion that was invested and a 15 percent drop off from the 889 deals signed in the last three months of 2011. And the first three months of this year represents a 28% drop from the $8 billion venture capitalists invested in the April-to-June quarter of last year and a 27% drop from the 1,041 deals done. Venture Capital: Fewer Deals, Fewer Dollars