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The article discusses the latest MoneyTree report from PriceWaterhouseCoopers and the National Venture Capital Association which found that venture capital (VC) funding dropped 31 percent in the third quarter of 2010. Based on data from Thomson Reuters, VCs invested 4.8 billion U.S. dollars in 780 deals. Early stage companies received the bulk of first time investments.

The article reports on a 31 percent decline in venture funding during the third quarter of 2010. Venture capital which invested 6.9 billion U.S. dollars in 962 deals during the second quarter, invested only 4.8 billion U.S. dollars in 780 deals during the third quarter. The decline was attributed largely to a drop in cleantech deals, which experienced soaring rates during the second quarter of 2010.

The article reports on the decision of the U.S. House of Representatives to approve the American Jobs and Closing Tax Loopholes Act of 2010, which will raise taxes on venture and private equity firms. Taxation on profits gained from investments known as carried interest will be increased under the bill. The legislation proposes to treat 75% of carrier interest as income tax. A group of academic institutions and researchers claimed that the bill would have adverse impact on employment.

The article reports on mergers and acquisitions (M&A) in the U.S. as of April 2010. It notes that the first quarter recorded the highest number of venture-backed companies sold since 1975. Data show that 111 venture-backed companies have been sold in M&A transactions for the quarter ended March 31, marking an increase from the 64 deals posted in the previous year. The information technology (IT) sector leads in terms of M&A deals with 81 transactions for a combined worth of 2.3 billion dollars.

The article presents information on Index Ventures, a venture capital investment firm based in Geneva, Switzerland. The company recently launched two funds, the first fund is worth 500 million U.S. dollars from limited partnerships (LPs) and the other is worth 600 million U.S. dollars. It is noted that Index Ventures is considered the European fund that have the best lineup of LPs and can easily attract entrepreneurs.

The article offers information on a ranking of the best performing venture capital firms by the magazine. The firms are ranked based on quantitative and qualitative measures. A total of 200 venture capital firms worldwide are screened from which the top 100 are selected. A method used in ranking the firms is a multi-criterion, weighted-average model.

The article offers information on the Red Herring Global Top 100 Venture Capital firms. The "Red Herring" magazine has expanded internationally to evaluate the best startups from five continents. It emphasized that although venture capitalists live on retiree's money or college alumni donations, they acknowledge the fact that stakeholders would know about their state of affairs on a quarterly basis. In selecting the top 100 venture capitalists, "Red Herring" considered financial performance, global footprint and intangibles. For 2009, the list includes Advent Ventures, Balderton Capital Management and Kenneth Capital, among others.

The article offers a look at the status of venture capital in the U.S. The criteria that must be met for a startup to file for an initial public offering (IPO) are cited, which include four training quarters of profitability, stable management team, and a fraction of international sales. The author notes that the prevalence of cash flowing into venture capital firms resulted to too many deals, higher valuations and lower returns on investments. An assessment of the relationship between cash infusion abundance, decrease of returns and investors' withdrawal from overcapitalized sector is also offered.

The article focuses on a set of recommendations issued by the National Venture Capital Association (NVCA) designed to assist the venture capital industry during the tough financial times. The recommendations cover the venture capital industry, investment banking, accounting professions, law firms, stock exchanges and the government. They include the establishment of a greater collaboration within the U.S. financial system, improvement on how stock is sold and distributed in initial public offerings (IPO) and keeping taxes for firms at capital gains rate.

The article reports on the challenges faced by venture capital funds in raising new money. According to a report from the National Venture Capital Association (NVCA) and Thomson Reuters, 40 venture capital funds raised $4.3 billion in the first quarter of 2009, a 39% decline from the $7.1 billion raised by 71 funds in 2008. NVCA President Mark Heesen claims many venture capital firms have either already raised funding or are waiting until market conditions improve.

The article reports on a survey by Zero2IPO Research Center which reveals that Chinese venture capitalists are affected by the economic downturn along with their Silicon Valley counterparts. The Chinese Venture Capitalist Confidence Index plunged to a 3.25-point reading on a 5-point scale in the third quarter of 2008. The survey found that 20 venture capital funds raised $492.2 million in the third quarter, an 83.7 percent decline from the $3 billion raised by 40 funds in the record-setting prior quarter.

The article unveils the plan of Lehman Brothers to sell its $1 billion venture capital unit in an effort to increase its balance sheet and keep the firm afloat. According to industry sources, Lehman plans to include the venture capital unit in an auction of 55 percent of its wealth management and leveraged-buyout businesses. In related news, Lehman also plans to sell its British mortgages and spin off its commercial real estate holdings.

The article reports on the decision of Safeguard Scientifics, the publicly traded venture capital fund, to sell stakes in six companies for about $100 million to Saints Capital. The deal is in line with the strategy of Safeguard Scientific to cut down a portfolio that once stood at more than 40 companies. Safeguard expects to gain about $16 million from the sale. Under the deal, Saints will also take over debt guarantees totaling $31.5 million that Safeguard made on behalf of the companies.