Stories such as Andreessen Horowitz making $78 million off an early $250,000 investment in Instagram capture the public imagination.
However, venture capital grew for young IT companies in the first quarter, especially those working on enterprise software, while it declined for flashy Web startups, Computerworld reports. In a quarterly survey by Dow Jones VentureSource, $2 billion was invested in 257 deals with young IT companies, a 14 percent increase in dollars and a 2 percent increase in the number of deals over the same period a year ago. Enterprise software companies made 196 deals for a total of $1.3 billion, a rise of 6 percent in deals and 61 percent more money than a year earlier. The bulk of that investment was aimed at application development, which I read to mean jobs for developers and project managers.
Meanwhile, Internet companies attracted $375 million in 88 deals, a decline of 76 percent in money and 17 percent fewer deals. The report found that investment overall fell 18 percent from last year, totaling $6.3 billion for all business sectors.
Meanwhile, an infographic released last week on U.S. startup hubs by Venture 51, an early-stage venture fund based in Scottsdale, Ariz., shows the Midwest far outpacing the rest of the country in growth, as Silicon Prairie News touts, but it's based on 2005-2010 data and the graphic notes that almost all regions except New York City have seen a drop in new deals.
Those Silicon Valley startups continue to raise money, though, which means hiring. A Wall Street Journal article points to these in particular: