Fewer VCs To Go Around

"The number of U.S. venture capital firms fell 21 percent in 2004, according to a study by Ernst & Young."

"The number of venture-backed startups worldwide fell as well. Portfolios shrunk 14.6 percent between 2003 and 2004 as venture consolidated companies and gave up on losing bets, the study said."

"Although the total number of startups declined, the number of new investments increased 4 percent. This suggests VCs are starting to accelerate spending to replenish portfolios as they exit from older companies. “The post-bubble clean-up is still under way,” said Ernst & Young’s Gil Forer."

"Despite the falling number of portfolio companies, VC spending has rebounded. Last year, venture-backed companies pulled in investments worth $20.4 billion, according to VentureOne. That’s up from $18.9 billion in 2003."

"A total of 257 venture-backed startups went out of business last year, about 5 percent of all the companies in VC portfolios. That was down from 2003, when 10 percent of venture-backed companies folded."

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