IT Continues to Attract Venture Capital Dollars

technology436x207According to the latest edition of The Money Tree Report, a quarterly study of venture capital investment in the US produced by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), venture capitalists invested just over $4B in software deals during the first quarter of 2014. Software deals netted out 42 percent of all dollars invested in the quarter, almost four times as much as biotechnology. IT dollars are up 33 percent over the prior quarter.

Zintro expert Jonathan Price Is the Managing Director of Business Centre Capital, the UK’s only investment banking operation specializing exclusively in the business center industry. “Venture capital investors are bound to favor software over bio-tech investments because of the issue of timing,” he explains. “Leaving aside questions of risk, which might also tend toward software investments, venture capital investors will prefer software because the profits from successful investments will be generated more quickly than with bio-tech. The reason why this is important is that VC fund managers are incentivized by performance fees based on IRR measures of return, and early profits boost IRR returns significantly.”

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