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Funding For Business Startups Declines

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(CBS)

(CBS)

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SAN JOSE (CBS/AP) — A new study shows that funding for business startups declined in 2012, the first time that’s happened in three years, as venture capitalists spent less money on fewer deals.

Capital intense sectors like clean technology and life sciences were among the hardest hit, according to the MoneyTree study released Friday. The study was conducted by PriceWaterHouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters.

The decline could have a broad impact on Silicon Valley startups, which depend heavily on venture capital to get off the ground.

Startup investments fell 28 percent to $3.28 billion, compared with $4.57 billion a year earlier. There were 267 deals in all, a decline of more than 23 percent.

The trailing investments and declining number of deals continued into the final quarter.

San Francisco’s SquareTrade Inc., which provides electronics warranties, snatched the biggest round of funding in 2012 — $238 million.

(Copyright 2013 by CBS San Francisco. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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