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Venture capital researchers say new money is stuck in old investments.  

With fewer new public offerings, known as IPOs, the venture capitalists are “getting stuck with young companies because the money continues to be tied up,” said Stephanie Tibbetts, program director for the Lester Center for Entrepreneurship and Innovation at UC Berkeley’s Haas School of Business. 

This means venture capitalists must bring the companies further along instead of cashing out once the company becomes public, she said. 

Until public offerings increase, fewer new companies will be backed.  

The number of initial public offerings crashed to 37 in 2001, compared to 226 in 2000, according to the National Venture Capital Association in Washington and Venture Economics, a New York investment and securities-tracking firm as reported in the Wall Street Journal. 

At the peak of new investment, venture capitalists put $50.9 billion in new companies in 2000 compared with $30 billion in 2001. 

Although venture capital investment took a hit with the dot-com bubble burst, venture capital firms are still investing, only not at the peak levels that were hit during 1999 and 2000.  

“Typical comparisons to the watershed years of 1999 and 2000 are unrealistic,” said Tracy Lefteroff, global managing partner of the Venture Capital Practice of PricewaterhouseCoopers, in a press release.  

She said she expected 2001 spending to reach $30 billion, which far exceeds the 1998 levels of $17.5 billion.  

Jennifer Fonstad, director of the venture capital firm, Draper Fisher Jurvetson said she expects investment to increase in three areas: nanotechnology, networking infrastructure and storage. 

Nanotechnology, often applied in microscopic robotics, uses atoms and molecules to manipulate materials.  

Fonstad said investment in data storage has been increasing as long as the Internet has been around. “The explosion of the amount of data and information being collected, analyzed and stored has contributed to the trend,” she said. 

The events of Sept. 11 played a role in the shift of some investment money being used for security. “People began investing more in security as a result of the tragedy in New York,” Fonstad said.