The Narrowing Ambitions of Venture Capital

A Limited Scope

Historical data bear out the trend. In 1974, the fraction of venture capital investments primarily involving computers and telecommunications was only 35 percent, a share that climbed to 62 percent in 1982 (as excitement grew around computer peripherals) and finally reached 79 percent during the dot-com boom in 2000 before subsiding temporarily. The figure has rapidly climbed again, reaching 56 percent in 2011. And that may yet mask the rise of social-media investing, which fits poorly into traditional classification schemes. Even within other categories, venture funding is highly concentrated. In the energy sector, venture funds have overwhelmingly gone to renewable and

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