In India, Downturn Is Hardest On New Startups
Last year, U.S. seed-stage companies attracted more dollars than they had since 2000 and investments in U.S. early-stage companies were down by less than 10 percent. In India, however, investments in early-stage startups plunged in 2008 by 90%, even though overall venture investment was down by *just* 63%, from $22 billion to $8.1 billion (according to the India Venture Capital & Private Equity Report 2009 by Thillai Rajan and Ashish Deshmukh at IIT in Madras). Young companies in India have trouble getting money anyway -- between 2004 and 2008, they attracted only 9% of deals -- but in a recession, "venture capitalists play it safe and hardly venture in funding early stage startups," according to Arun Prabhudesai, author of the Indian business blog Trak.in.
