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Start-up investing slow to come back

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BILL RADKE: While a lot of people wait for jobs, entrepreneurs are making their own by launching start-up companies -- developing new software, more efficient batteries and life-saving drugs. But investment in start-ups fell off during the recession and it's taking a while to come back.

From the Entrepreneurship Desk at Oregon Public Broadcasting, Mitchell Hartman reports.


MITCHELL HARTMAN: The National Venture Capital Association reports this morning that investment was down 30 percent from the second quarter to the third. That's partly because VCs go on vacation in August, so they don't do as many deals.
And investment's actually up substantially compared to the depths of the recession.

MICHAEL GREELEY: We were quite upbeat.

Michael Greeley is with Flybridge Capital Partners in Boston.

GREELEY: The pace of innovation continues unabated. We saw in our portfolios consistently 50 percent to 100 percent revenue growth.

And Greeley says money's now pouring into companies that are just starting out with an idea and technology in development, but often no sales or customers yet.

GREELEY: The amount of first-time financings is a great barometer for the health of the industry. That really is probably the most risky investment that venture capitalists are asked to make.

The fledgling start-ups being favored most for investment right now are in biotechnology, software, and new media.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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