Has the European venture capital industry graduated to a new phase in its development, wonders VC Ratings?
A new study from VentureOne and Ernst & Young European shows European venture capitalists are putting more money into fewer companies – moving away from the risk averse trap of putting a small amount into many companies leaving a multitude of start-ups unable to grow and compete on a substantial scale.
With €2.97bn invested in the first three quarters of 2006, venture capital investment is poised to surpass last year’s total. But the number of deals at 631 is 26 per cent lower last year, indicating investors are backing fewer companies with larger sums.
In fact, this year so far the median size of a seed-investment and a first-round financing deal are at record levels, €650,000 and €2.4m respectively.