Effectively, the other shoe has dropped. Monday, the figures released by industry publication VentureWire confirmed those suspicions. These types of companies carry the greatest investment risk, because they often have a concept but no revenue. Historically, venture investments sequentially dip in the first quarter and then ramp in the second, before slowing during the seasonally weak third quarter.
Investments typically regain strength in the fourth quarter.
The pace has changed in the first quarter. It'll be interesting to see what happens in the next month or so. However, Andersen does not see the situation as dire. That would be a nice increase to 1999, if you throw away 2000 as an anomaly. A strong rally in the markets, a stunning IPO and the billion-dollar funds that venture firms are raising can all serve as catalysts for venture investments, Andersen said.