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WSJ: VCs to Resume Funding Startups in 2010

In an article published today (After Dry Year, Start-Ups Are Poised to Get Cash), the Wall Street Journal reported that venture capitalists will resume funding startups in 2010.

The major reasons for this development:

  • During much of 2009, VCs were hoarding cash to protect their existing companies. With the economy and the stock market stabilizing, VCs are returning to investment mode.
  • Whereas initial public offerings were almost nonexistent this year, investment bankers see IPOs returning in 2010.

Some additional points made in the article:

  • During 2009, the vast majority of the (modest) VC investment that did occur was in information technology or health care.
  • For 2010, VCs are looking for opportunities in social networking, mobile technology, health-care technology, and clean technology.

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Financing