Times are tough right now for venture capitalists, vSpring Capital partner Patrick Bultema told biotechnology entrepreneurs recently.
Venture capital funds have little to invest now because they haven’t been able to raise much money from institutional investors recently, Bultema said Tuesday at BioSoCo,the southern Colorado chapter of the Colorado BioScience Association. Bultema is based in the Springs, but his fund is based in Utah.
Attracting investment capital has been difficult because venture funds must use financial results from funds they created in 1999-2000 as the most recent performance example, Bultema said. Those returns were devastated by the 2001 collapse of the technology industry.
As a result, investors found private equity capital and hedge funds more attractive investments in recent years and slowed venture capital fundraising, he said. The credit crisis that began last year has made those investment less attractive, which should help venture funds, he added.
Until then, most venture funds have less to invest and are being more selective about their investments, Bultema said.