Young, emerging growth companies looking to venture capital firms as an alternative to more traditional debt financing sources may experience stiffer competition.
VC investments declined for the first time in three years, according to a recentMoneyTree Report by PricewaterhouseCoopers LLP and the National Venture Capital Association (NVCA).
Overall, venture capitalists invested $26.5 billion in 3,698 deals in 2012, a decrease of 10 percent in dollars and 6 percent in deals over the previous year. The clean technology and life sciences sectors experienced the greatest drop off. Meanwhile, the software sector remained strong in 2012, with venture funding increasing 10 percent to $8.3 billion and deals up 8 percent.
According to the report, the stage of investment also shifted from seed to early stage in 2012. Investments into seed stage companies decreased 31 percent in terms of dollars and 38 percent in deals with $725 million going into 274 companies in 2012, the lowest annual seed dollars since 2003. The trend reveals that VC firms have started engaging with companies later in their life cycle than in previous years.
The report suggests that VC firms have become more discriminating when it comes to their investments. Given the uncertain economic times, they want to make certain that the risk will pay off. Therefore, it is even more important that companies put their best foot forward in written presentations and meetings.
For more information about what venture capital firms look for in a business opportunity, please see our prior post.
If you have any questions about venture capital financing or would like to discuss how it may benefit your business, please contact me,Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
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