The Money Tree report on VC activity in 2008 shows how the recession has hit funding for high growth deals. From that report:
The decline in investments over the prior year is spread across industries and stages of development, with some notable exceptions. Dollars invested in the Clean Technology sector grew more than 50 percent in 2008. Companies in the Seed Stage of development also received more money in 2008, reaching the highest level seen since 2000.
The increase is seed funding is probably attributable to some long term hedging on deals. With lower returns in funds it is likely that there will be more risk-taking on early stage ventures to gain higher returns in the out years of these funds.
The increase in “clean” technology is undoubtedly anticipatory economic rent seeking behavior. Investors are betting that the new administration is going to make good on its promise for massive government spending on “green” energy — and they are getting in line at the public trough.
