A new survey says that improved returns on venture capital investments in California’s Silicon Valley may help spur more investment in startup companies, according to the San Jose Mercury News.
The survey, conducted by Fenwick and West, showed that 49 percent of venture financing deals in the first quarter of 2010 were so-called “up-rounds,” meaning that the companies’ share prices had risen since their previous rounds of financing, according to the Mercury News.
The Mercury News also says the survey also found that share prices were increasing an average of 21 percent, the third straight quarter of improved returns.
Industry analysts told the Mercury News the positive returns show that the area’s economy is recovering, and this may have the effect of loosening up more VC funding.
Barry Kramer, a Fenwick partner, told the Mercury News that the report is the “type of thing that makes VCs feel good.”
The growth of venture capitalist investment is part of a nationwide trend – encouraging news for entrepreneurs forming a company. According to the latest MoneyTree report from PricewaterhouseCoopers and the National Venture Capital Association, venture capitalists invested $4.7 billion dollars during the first quarter of 2010, nearly a 40 percent increase from 2009.
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