Money for high-growth firms drying up

October 19th, 2009, 6:00 am · 5 Comments · posted by Jan Norman, small-business columnist

Private equity investments in U.S. companies totaled $7 billion in the third quarter 91% less than a year ago and 42% less than the second quarter, reports PitchBook Data, a private research firm that specializes in the private equity industry.

A couple of chart are worth more than long descriptions of what’s happening (click on the images for a larger view). Both are from pitchBook’s “Breakdown 4Q 2009″ report:

The next chart shows that the Southeast had the most transactions, followed closely by the West Coast and Northeast:

Click here to download PitchBook’s “Breakdown 4Q 2009″ report. It’s free but you must register.

In addition, private equity and venture capital funds had a dreadful third quarter trying to raise money for future deals, according to two reports. That will translate into less equity capital for young high-growth companies in the near future.

July through September, 72 U.S. private equity funds raised $25.2 billion, 70% less than the same period last year, according to new analysis by Dow Jones Private Equity Analyst, a leading industry newsletter.

Through the first nine months of 2009, 265 private equity funds raised $79.9 billion, down 59% from the $195 billion raised by 315 funds at the same time in 2008, Dow Jones said.

Venture capital funds also had a tough time raising money for future deals, according to Thomson Reuters and the National Venture Capital Association. In the third quarter, 17 venture capital firms raised $1.6 billion compared to 87 firms raising $8.4 billion a year earlier.

Click here to read more.

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matt says:

October 19, 2009 at 6:49 am

should someone get paid to build there own home
someone gets paid to build a home even more to sell it

what happens if you build a home and get paid but the person
who you built the home for has no real trade

sitting on a piece of papper is not a trade

“I will trade you me sitting on piles of paper for one house “

October 19, 2009 at 6:56 am

trees grow paper doesn’t

if you bury 1 dollar, fifty years from now does it turn to 1,000 dollars

should an honest trades person have to trade with some one
who tries to turn 1 dollar into 1,000 dollars just for burring 1 dollar
50 years ago

ocobserver says:

October 20, 2009 at 10:51 am

hah. Why sure! The credit markets contracted by $10 BILLION last MONTH. I didn’t see that reported in the OCR blogs though. hmmm. How could financial people miss that pesky little fact??? Folks, we are in a deflationary recession (the most dangerous kind) driven by a collapse of the credit markets. Government is desperately trying to keep the real estate market’s head above water by blowing more bubbles. Today it was reported in the real news that the IRS is investigating 100,000 fraudulent claims on the government’s $8000 housing credit for new buyers!!! hah! That’s not being reported here either. Another pesky fact. So ONE out of every THREE applications is suspected to be FRAUDULENT!!! hah! So no wonder there’s no private investment money for businesses!!! THEY’RE ALL BROKE AND COULDN’T BORROW A DIME TO SAVE THEIR LIVES!!!

Think, people. Think. It really isn’t that hard to do. Follow the bouncing ball and use your minds!!!

lido balboa says:

October 20, 2009 at 11:13 am

This woman doesn’t know sheis from shine ola!
one day it’s … Everyone’s buying companies, the next - - there’s no money.
Spoon fed drivel . . . . no education, no biz background and just plan lazy..
Other than that GREAT ORANGE COUNTY REGISTER piece.
No wonder they’re BK

Glen Naughty says:

October 23, 2009 at 10:58 am

Do we need an Amber Alert 4 Jan (askmak)

Orange County Register