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VC survey: More B2B tech investing, fewer Series A rounds in 2013

-John Backus, a managing partner with New Atlantic Ventures in Reston, Va., expects cybersecurity and ed tech to be areas of increasing venture investment in 2013.

A majority of venture capitalists expect an increase in investment for business IT in 2013, while nearly half of VCs expect that Series A funding will be the hardest to come by next year.

That’s according to a survey of VCs by conducted by the National Venture Capital Association and Dow Jones VentureSource.

The survey found that 61 percent of VC respondents predicted investment increases in business IT — an area of strength for the Boston tech community. Fifty-seven percent expect an increase in health care IT in 2013.

Consumer IT, meanwhile, is only expected to increase next year by 35 percent of respondents to the survey. That’s significant, the survey noted, because consumer IT was “the sector of greatest expectations last year.”

In a quote included with the survey, Scott Maxwell of Boston’s OpenView Venture Partners offered a word of caution about business-facing tech investing in 2013. “The B2B tech private company valuation bubble will grow and then pop in October,” he said.

Survey respondents expected decreases in funding next year for cleantech (61 percent of respondents), medical devices (53 percent) and biopharmaceuticals (49 percent).
The move from seed stage to Series A stage for startups is expected to be increasingly difficult in 2013, according to the survey. Forty-five percent of VC respondents said the hardest funding round to obtain next year will be Series A.

Twenty-eight percent said Series B will be most difficult to raise, while 13 percent said seed/angel funding would be the most challenging, the survey found.
See also: 13 hot Boston tech firms I’m watching in 2013 (all of which are business-facing tech companies)

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