VC first investments down 28% in 2008In 2008, 33 first investments, or 28 percent of total VC investments, were made in seed stage companies, compared to 43 percent in 2007. Proseed, a VC fund traded on the Tel Aviv Stock Exchange, made the most investments in seed companies with three deals, according to new research released by IVC Research Center. Ten first investments were made in foreign companies in 2008. Infinity’s Israel-China VC fund, with 60 percent of its managed capital designated to investments in China, made four of its five first investments in Chinese companies. In 2008, Israeli VC funds made 119 first investments in technology companies, compared to 127 investments in 2007. More telling is the dollar amount of the first investments, reflected in the findings of IVC High-Tech Quarterly Survey 2008, which slid 28 percent from the previous year. The IT & software sector attracted the largest number of first investments (26) in 2008 – 22 percent of the total number of investments. In 2007, the sector ranked fourth, with 16 percent. The life sciences sector ranked second with 25 investments or 21 percent, while in 2007 the sector managed to attract only 7 percent and ranked fifth. According to IVC CEO Koby Simana, “The reduced activity reflected the economic crisis that deepened in the fourth quarter and the difficulties confronted by Israeli VC funds in raising new capital. We expect a continued decrease in first investments in 2009.”