2004 E&Y -- 2004 Global Venture Capital Insights Report

Looking back on the last year, we can see now that 2003 was an important turning point for the global venture community.
We entered the year with declining investment in the all the major venture capital markets, scarce exit opportunities
and the Nasdaq in the neighborhood of 1,300. Doubt and uncertainty accompanied this low point.
By the end of the year, the situation—and the mood—had changed. NASDAQ ended the year at just over 2,000, and
European stock markets were beginning to post significant gains as well. Venture capital investment stabilized over the
course of the year and even showed an increase in the last quarter of 2003. IPOs for venture-backed companies became
possible again. A renewed energy and optimism can be felt among investors and entrepreneurs going into 2004.
The last year also represented a period of transition in the operating framework for venture capital funds as the industry
worked through various issues such as valuations, transparency, disclosure, regulatory changes and the relationship
between limited partners and general partners. While the hard work is not over, increasing stability in the ground
rules means that investors can focus their energy on making bets on the future.