Start-up investments plummet as VCs struggle for cash

Investments in fledgling companies plunged 65 per cent in the US during 2001, as venture capitalists (VCs) tightened their belts.

Research conducted by VentureOne indicates that only $32.1bn was invested last year compared with $91.6bn in 2000.

Sliding stock markets meant virtually no start-up firms were able to float, reducing income for VCs and hence forcing them to cut back on further investments.

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