Venture Capital Funding Hits Record High

Venture capital firms invested a record $10.1 billion in 1996 as funding of small start-up companies soared 52% from record 1995 levels, according to a study by Coopers & Lybrand. The accounting firm said its Money Tree Survey found venture capital firms participated in 2,163 deals in 1996, 40% more than were funded in the previous year. The average size of deals financed rose to $4.7 million last year from $4.3 million in 1995. California accounted for the major portion of venture funding commitments in 1996, with deals worth $3.2 billion, up 49% from the prior year. Technology-based companies received about 60% of total venture capital investment in 1996, with software companies alone accounting for 16% of the total value invested, a rise of 112% from 1995 levels. Communications companies were nearly even with software, rising 50% to $1.6 billion. Health-care investments rose 104% to $1.1 billion.