Post-Crisis Equity Financing for Startups

Business Week-Small Business

Entrepreneurs seeking early-stage capital must rethink strategies to suit investors’ expectations.

Venture capital returns over the past decade deserve two thumbs down. $100 invested in a venture capital fund in 2000 is worth slightly more than $98 today, once you factor in fees and expenses, according to research by Boston-based investment consulting firm Cambridge Associates. With such returns, why not buy into a lemonade stand? Not surprisingly, fundraising activity has dropped precipitously to $13.7 billion in 2009, down 66% from 2007, when the financial crisis began.

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