It’s that time of year when young analysts turn to thoughts of venture investments won and lost. We’ve got the early returns, and more details will shake out in coming weeks, so get a head start now.

—It was the best of times, it was the worst of times. Venture investments in cleantech startups nationwide fell by 38 percent in the fourth quarter that ended Dec. 31, compared to the third quarter of 2009, according to ChubbyBrain, a New York firm that tracks data on high-growth private startups. Yet investments in Internet startups soared during the quarter. The overall amount of fourth-quarter venture capital investments declined to $5.5 billion nationwide, compared with $5.9 billion during the fourth quarter of 2008, but ChubbyBrain counted 687 fourth-quarter deals nationwide, the highest number in five quarters.

—On another front, funds flowing into U.S. venture firms by college endowments, wealthy individuals, and other limited partner investors fell by almost 55 percent in 2009, compared to 2008, according to Dow Jones LP Source. In San Diego, the private equity firm Capital Creek Partners of suburban Rancho Santa Fe raised $50.7 million in the sole funding that showed up last year.

—SAIC (NYSE: SAI), the Virginia-based government contractor that was founded in San Diego, agreed to acquire cybersecurity firm CloudShield Technologies of Sunnyvale, CA. Since its founding in 2000, CloudShield reportedly had raised about $75 million from investors that include D.C.-based Paladin Capital Group; Foundation Capital of Menlo Park, CA; Fuse Capital of Palo Alto and Los Angeles; TPG Ventures of Fort Worth, TX, and San Francisco; and Tektronix of Beaverton, OR. The companies did not disclose financial terms of their deal.

—San Diego-based OpenCandy, which was founded by six ex-DivX employees in 2007, is growing fast and might consider raising a secondary round of venture capital later this year, according to CEO Darrius Thompson. OpenCandy, which now has 20 employees and is still hiring, raised $3.5 million in Series A funding in late 2008 from Bessemer Venture Partners, O’Reilly AlphaTech Ventures, and some prominent individual investors. The company’s website helps to connect free software publishers and advertisers.

—UCSD’s Rady School of Management has formed a new source of startup capital for San Diego entrepreneurs. The new Rady Venture Fund plans to make investments that range between $75,000 and $100,000 in a program that’s primarily intended to help MBA students at Rady learn the ropes of venture capital.

—MeLLmo, the Del Mar, CA-based startup that created a mobile business intelligence application for Apple’s iPhone, said South Africa’s Vodacom has selected its Roambi app to provide real-time, critical business information to its workforce.

—SG Biofuels said it has formed a strategic alliance with Life Technologies (NASDAQ: LIFE), the Carlsbad, CA-based maker of genetic diagnostic equipment, laboratory instruments, and other biotech supplies. Using Life Technologies’ genetic analysis tools, SG Biofuels said it will be able to produce improved cultivars of Jatropha, a bushy crop the company is developing as a potential source of biofuels.

Comments | Reprints | Share:          

More gloomy forecasts from private investors in high-tech sectors. U.S. venture capitalists see a cooling trend in the investment climate for the year ahead. One of the only bright spots I saw in the National Venture Capital Association (NVCA) Predictions Survey is that a majority of VCs are optimistic that the market for initial public offerings will begin to recover in 2010. So I hope venture capitalists like the companies in their portfolios, because a majority of those surveyed believe exits will be hard to come by in 2009.

The report mostly validates what we’ve heard VCs saying for several months now: dig in for a rocky 2009, and better make sure your best portfolio companies are ready to leap to an IPO or M&A exit when the markets rebound. The NVCA says its third annual predictions survey included 400 venture investors from across the U.S.

The survey predicts there will be more “green” flowing toward green technologies next year, with 48 percent of venture investors believing cleantech investments will increase next year. That contrasts with the green meanies—the 32 percent who predict investments will decrease in firms that develop solar and other alternative energy technologies or environmentally friendly products and services. Cleantech is the only sector in the survey—which included all IT and life sciences sectors—in which a majority of VCs predict more investment activity rather than less.

Media and semiconductors are in for the worst year in 2009, according to the survey. A full 71 percent of VCs surveyed see a decrease in media investments next year, while only 11 percent believe media investments will increase. Even worse, 79 percent predicted semiconductor investments will fall in 2009—with a scant 3 percent forecasting an increase.In perhaps the broadest measure of VC investment outlook for 2009, 92 percent of those surveyed believe venture investments will be less than the estimated $29 billion invested in 2008. How much less? About 61 percent think it will be under $27 billion.

I hate using canned quotes from these studies, but I thought Bob Pavey, general partner at Morgenthaler Ventures, made a good point in this one: “2008 feels like 1974 to me. Naysayers in 1974 were saying entrepreneurs and venture capitalists were obsolete and small company IPOs were a thing of the past. They were obviously wrong. The only good news I can offer today is that the forecasters don’t have any better insight into the future than the rest of us.”

Comments (3) | Reprints | Share: