FUDBusters: VC Investment in High Tech Still Slow

A few venture capitalists made some bold statements about the networking industry in September, but it doesn't look like a boom is on the horizon.

September 16, 2005

1 Min Read
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FUDFactor: The networking industry is back. Bolstered by new opportunities in China and Eastern Europe, as well as higher valuations of top-tier high-tech companies, venture capitalists are preparing to sink a new batch of money into tech start-ups and emerging technologies.

FUDBust: It's good to hear that VCs are taking an interest in technology companies again, but as far as we can tell, there's no boom on the horizon. In fact, VCs invested less than $1 billion in 114 communications start-ups during the first half of 2005, according to a recent PricewaterhouseCoopers survey. That's only a little bit more than was invested during the same period last year, and it's hardly a blip compared with the $105 billion VCs invested in high-tech firms in 2000. No matter how much we may hear from an enthusiastic few, the truth is that slow, consistent growth is the most we can hope for in the days ahead.

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