Of course, those figures don't approach the overheated volume of a year ago. In the last three months of 1999, e-commerce and content companies captured $9.5 billion in venture capital, and all Internet-related deals took in $11.8 billion.
MORE CAUTIOUS. There are other signs of a slowdown as well. On the whole, fourth-quarter VC investments totaled $19.6 billion, down from $28.3 billion in the third quarter and the lowest level since the third quarter of 1999. At the same time, VCs grew more cautious, concentrating more than half their fourth-quarter investments in expansion-stage companies. Startups and early-stage companies, by contrast, absorbed just 23% of the cash.
One likely explanation: With the IPO markets depressed, VCs are left without a quick exit strategy. So they're concentrating most of their time and money on companies in which they've already invested. For entrepreneurs looking for first-time capital, that made the last few months of 2000 a lonely stretch. By Julie Fields in New York