Jun. 2–The bullish stock market may suggest the economy is recovering, but nobody’s told venture capitalists.
The amount of venture capital doled out to Oregon startups continued to shrink in the first quarter, according to the MoneyTree survey compiled by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.
Oregon companies received $11 million in investments in the first quarter, the lowest quarterly total since the third quarter of 1998, the survey results show. In the fourth quarter of 2002, Oregon companies received $40 million.
Since shortly after the fourth quarter of 2000, when venture capitalists invested $275 million in Oregon, the number and size of deals has steadily decreased. And the results suggest the downward spiral may not be over.
Nationally, the venture-capital picture isn’t much brighter, according to the MoneyTree survey. In the first quarter, U.S. companies received $3.8 billion, down from $4.3 billion in the previous quarter and the lowest since the third quarter of 1997.
Mohan Nair, a longtime executive in Oregon’s technology sector, said venture capitalists have become much more choosy.
“In comparison to the few years prior, which were pretty drunken years, I’d propose that venture capital is returning to the trendlines that were launched in the early ’90s,” said Nair, chief executive of Emerge, a business advisory firm. “The pendulum is swinging from a very high point to a range that I think is acceptable.”
Consumer spending declined by 0.1 percent in April, the biggest drop since January, the Commerce Department reported.
The New York-based Conference Board’s consumer confidence index rose to 83.8 in May from 81 in April, the second consecutive monthly increase.
U.S. new home sales unexpectedly rose 1.7 percent in April to 1.028 million at an annual rate, the fastest pace this year, the Commerce Department said.
Orders placed with U.S. factories for durable goods fell in April by the most in seven months, the Commerce Department reported. The 2.4 percent decrease to $168.9 billion in orders for items made to last at least three years followed an increase of 1.4 percent in March.
Gross domestic product increased at an annual rate of 1.9 percent in the January to March quarter, a slightly better showing than the 1.6 percent growth rate estimated a month ago, the Commerce Department reported.
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(c) 2003, The Oregonian, Portland, Ore. Distributed by Knight Ridder/Tribune Business News.
