“I honestly don’t think so.”
That’s the word from Mark Heesen, president of the National Venture Capital Association (NVCA), which, in part, tracks private investment activity in the United States.
“Twitter is a company that stands by itself,” Heesen explained. “We don’t see a huge amount of money going into the communications space as a whole. There’s more excitement and money going into life sciences and clean tech.”
The latest stats from PricewaterhouseCoopers and Thomson Reuters, compiled for the NVCA, confirm that assertion. In 2009’s second quarter, a mere 25 venture capital firms raised $1.7 billion. Never mind that the amount represents the smallest total of venture funds raised in one quarter since 1996 – none of the cash in the top 10 transactions went directly to the communications field.
“There are always a few folks who look specifically at funding communications ... but I don’t know of a ‘hot sector’ in the communications arena right now,” Heesen said.
That sets Twitter apart as a standalone success story in the industry, for a couple of key reasons. First, the telecom and Internet businesses are still suffering a hangover from the tech bust. The pain is easing; despite that, investors remain reticent about pouring money into communications deals, Heesen said. Second, those transactions are expensive. And few people feel like risking their liquidity in this economic environment.
