Despite stock market volatility, many investors are showing increased confidence about the outlook for the US economy with record amounts of money being made available in venture capital.
Research compiled by PricewaterhouseCoopers shows that US investors have committed a record $19.6 billion (€21.47 billion) into venture capital projects in the second quarter of 2000. This follows $17.1 billion invested in the previous quarter and is more than double the $7.7 billion invested in the first half of 1999.
PwC says the pace of investing is such that the amount of venture capital funds is set to double to around £70 billion (€88 billion) over the full 12-month period. Commenting on the figures, PwC global managing partner, Mr Tracy Lefteroff, said the money was being put to work aggressively.
"The stock market may be uncertain about the economy but venture capitalists aren't. They are betting on the future. Venture capitalists possess a combination of healthy optimism and patient money," he says.
The bulk of the investments are going into technology-based companies, including Internet-related businesses. After the Internet, investors are keen to put funds into the telecommunications sector.
In the Republic, PwC says investors still have a substantial appetite for Internet companies but, in line with global trends, the focus has shifted to building the enabling technologies.
The number of Irish companies receiving venture capital funds in the second quarter rose by 43 per cent to 1,432 compared with 999 in the same period last year. The average funding per company is also significantly ahead increasing by 78 per cent to $13.7 million.
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