20 March 2008

A Question Of Scale

According to NPR this morning, the entire venture capital industry for 2007 was $30 billion and helped fund about 4,000 companies, the highest levels since the tech bust. This also happens to be the amount of the money that the Federal Reserve lent to bond brokerage Bear Sterns, prior to a takeover by J.P. Morgan Chase, earlier this month, secured by securitized mortgage collateral that no one else would accept.

VC firms are bearish about 2008.

While venture capital firms are widely believed to play a central place in our economy, the amount of money involved is stunningly small compared to the scale of the larger capital markets.

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