In 2011′s fourth quarter, venture capitalists spent $6.57 billion in startups, a 19 percent rise from the previous year’s $5.52 billion. The increase could be perceived as positive sign but there was also a negative found in the quarter’s activities.
According to Reuters, the quarter’s total spending came in almost $1 billion more than the $5.6 billion raised by the venture capitalists in the fourth quarter from investors such as university endowments and pension funds. With the discrepancy, it supports the trend that venture capitalists will usually spend more money every quarter than they what they raise.
Another fourth quarter stat released was venture-capital firms invested funds in 844 companies, down from the previous year’s 861. An average deal came in at $7.8 million versus 2010′s $6.4 million.
So what does the greater cash, less companies trend mean?
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