Report: Startups caught in cash squeeze

EE Times (01/02/2009 12:45 PM EST)
 
SAN JOSE, Calif. — Established companies are tightening their purse strings when it comes to acquiring venture-based startups and the door to public offerings is essentially closed, according to a market watcher.

Venture capital startups seeking to be acquired or to go public just closed their worst year since 2003, according to statistics from Dow Jones VentureSource. U.S. venture-backed companies generated $24.1 billion through public offerings and mergers and acquisitions in 2008, the lowest totals since VentureSource began tracking the industry in 1992.

The 2008 totals were down 58 percent from the $57.6 billion in 2007, the market watcher said. Just seven companies completed public offerings in 2008 raising $551 million down from the $6.8 billion generated through the public listings of 76 companies in 2007