Venture Capital On The Rise

"Venture capital investment has picked up amid rising corporate profits and an uptick in mergers and acquisitions -- developments that help VCs exit their positions with healthy returns in their pockets. "

"These days, VCs are insisting that young companies show they have a dependable client base and a steady revenue stream before funders hand over their money, experts said. "

""There's a larger and larger supply of capital to be invested that's been sitting on the sidelines for many years," said Mark Cannice, associate professor of entrepreneurship at the University of San Francisco and director of the school's entrepreneurship program. "At the same time, there isn't jubilation like there may have been five years ago, but instead a very sober confidence." "

"Meanwhile, the maturation of the information-technology sector has changed the playing field forever. "

""I think this is a broader story that many Silicon Valley companies have to learn," said Alexander Slusky, co-founder and managing partner of Vector Capital, a San Francisco private-equity firm. "We still see mature companies making projections wholly unsupported by the market realities." "

"Popular magnets for funding now include companies that offer adaptable Web-hosted business services and technologies for smart phones and other portable devices. "

""We're looking for companies that are, first and foremost, customer-rich, " Slusky said. On Wednesday, Vector announced a new $350 million fund for technology buyouts, spin-offs and recapitalizations. "

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