For Immediate Release
Contact: John S. Taylor (703) 524-2549

October 28, 1999 -Venture investments reached a record $12.98 billion disbursed to 1,190 companies in the third quarter of 1999 according to Venture Economics and the National Venture Capital Association. Although much of the growth is being driven by Internet-related investment, all industry sectors are receiving increased funding, including the biotechnology and medical/health sectors.

The average round of financing a company receives has grown from $7M last year to $11.5M this quarter. Particular growth is noted in the number of companies receiving $20 million to $50 million in a financing round. In all of 1998, 119 companies received rounds in that category totaling $3.2B, whereas in the third quarter of this year alone, 148 companies received a round between $20M and $50M totaling $4.2B.

"What we are seeing is a powerful entrepreneurial surge fueled by an apparent decision on the part of capital markets that this is an area of great merit," according to Steven Lazarus of ARCH Venture Partners and Chairman of the NVCA Research Committee. "There are many factors which are converging to create this strong investment environment including high levels of recent fundraising, an active market for initial public offerings, a strong Internet sector, and an increasing number of entrepreneurs with promising ideas."

"The significant increase in financing activity by venture-backed companies is driven by time-to-market compression as well as growth in the Internet category in which companies are faced with large upfront marketing investments required to rise above the competitive noise level and establish brand identity. Additionally, higher valuations have enabled entrepreneurs to raise larger rounds with limited incremental dilution." said Christopher Schaepe, General Partner, Weiss, Peck & Greer Venture Partners.

Co-Investors
Corporate participation in traditional venture financing rounds continues to grow dramatically. This quarter, corporations and corporate venturing groups made investments in venture-backed companies nearing $2.13B in 3Q99 versus $1.1B in all of 1998. As all the world's eyes are on the US venture capital stage, it should be noted that foreign investors are playing an increasingly larger part by co-investing $400M in 3Q99 versus $358M in all of 1998.

Venture Economics Information Services (VEIS), a diversified information, research and benchmarking firm, has been tracking the venture capital and private equity industry for over 35 years. VEIS, a division of Thomson Financial Securities Data (TFSD), products and services are used widely in the U.S. and abroad by institutional investors, investment managers, consultants, venture capitalists, corporations and government agencies. For 13 years, the VEIS group has been providing private equity performance benchmarking and analysis products. Private equity managers and institutional investors alike consider VEIS' data to be the industry standard. For more information please visit www.ventureeconomics.com.