And demand is not abating for the technologies that enable the high-speed communications and electronic commerce that characterize and create modern business efficiency. The surge of investments reflects growth in the equipment, software and infrastructure sectors. This number represents a 25.7 percent increase from the previous quarter and a 44.3 percent increase from one year ago. The Changing Relationship Between Venture Capital and Telecommunications New technologies, lower transaction costs, the global trend toward deregulation and several years of unprecedented growth have all changed both business and investment strategies. These factors have led to the proliferation of companies turning to the private equity market for funding, as well as venture capitalists eager to invest in new companies.
Venture capital is a relatively new market.
It has served to make capital available to many more companies. Before the venture capital markets reached critical mass in the late seventies or earlier eighties, companies themselves took on the costs of developing a new product from the inception phase to launch. This model led to innovation occurring almost entirely within established companies with internal capital at their disposal. Venture capital opened the way for an entirely new model for innovation. And in turn, venture capital has become a fundamental part of the equity market.