Venture capitalism on the rise in recent months

Facebook CEO Mark Zuckerberg delivers a keynote address during the Facebook f8 conference on September 22, 2011 in San Francisco, Calif. His company could file the paperwork for an initial public offering as early as today.

Adriene Hill: New tech companies are attracting more start up money. A report out today finds venture capitalists are in a spending mood — funding rose 19 percent in the last part of 2011.

Joining us now to talk about what the spree means for the economy is Jill Schlesinger. She’s editor-at-large for CBS/MoneyWatch and joins us every Friday. Good morning.

Schlesinger: Good morning.

Hill: So what does this new investment tells us about the economy?

Schlesinger: Well it says that deep-pocketed, sophisticated investors are feeling a little more optimistic about certain parts of the economy. When you look at the numbers, it’s really directed at software, biotech, and clean energy companies, too. They’re hoping one of those bets becomes the next Facebook.

But I really wouldn’t go too crazy, because these numbers, even those the percentages are big, the actual numbers are pretty small -- and a drop in the bucket when compared to the total size of the U.S. economy.

Hill: Now could these investments pay off for us?

Schlesinger: Well, yes, eventually. Remember that these kinds of investments are usually made with a five to seven year time horizon. So we’re not talking about a this-year kind of impact on growth -- or even jobs. Right now it’s much important that the European debt crisis is resolved and the general global economic outlook improves. Those are the ingredients that are really going to boost confidence and hopefully get the economy moving quicker.  And down the line, those VC investments could add to it -- but I wouldn’t bet the farm on those investments either.

Hill: Jill Schlesinger is the editor-at-large for CBS/MoneyWatch. Thanks.

Schlesinger: Take care.

About the author

Jill Schlesinger is editor-at-large for CBS/MoneyWatch.

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