Reference no: EM132732565

Recent research has revealed that companies in the USA that rely on venture capital investment to expand their businesses and hire employees struggled to raise capital in 2012. Firms in the US arranged $6.9 billion in venture capital deals during the third quarter of 2012, a 32% drop in value compared with the same period in 2011, according to a Dow Jones VentureSource report. It is likely that changes. Venture capital investors in the US reduced lending and share purchase as a result of the recession and the slow recovery from it. The recession had made high risk companies even more risky and this has encouraged venture capitalists to be more cautious than in the past. Although venture capital funds were relatively scarce in the United States in 2012, the position is slowly improving and funds are more available than in the 'dark days' of recession during 2009 and 2010.

- Discuss the other factors that may have led to the decline in the amount of money lent by venture capitalists in the thirds quarter of 2012