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Start-ups face venture capital drought

By   /   Monday, January 4th, 2010  /   Comments Off on Start-ups face venture capital drought

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In the world of technology start-ups, 2010 may mark the beginning of a new normal, with fewer, saner deals and a tight focus on getting profitable ideas to market without burning through a lot of cash.

In 2009, venture capital investment in the Southern California region was down 62 percent to $643 million, according to data from PricewaterhouseCoopers. Observers say investment levels may rise a little next year but won’t climb back to mid-2000s level for another three to five years and probably won’t ever reach late 1990s tech boom levels again.

In some ways, 2010 represents the final shakeout of the dot-com bubble. Venture funds are often put together with a 10-year timeframe, so this year will be the last year in business for funds that jumped in at the last minute of the tech boom in 2000.

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