03 17 09 | Excerpts from The Wall Street Journal article by Joseph Pereira

Jeans, Healthy Snacks Draws Investors

Last year, while total venture-capital investing fell 8.3% to $28.8 billion, venture investments in consumer-products companies rose a healthy 31% to $485 million, according to the VentureSource unit of Dow Jones.

The consumer companies that are attracting venture capital make everything from high-tech fabric to "green" car components and healthy snacks. Their backers say they are well-suited to the recession because consumers will cut back less on clothes, eco-friendly products and food than other purchases. Such companies typically require capital in smaller bites than the information-technology and life-sciences concerns that have dominated venture investing in recent years.

"Our research shows that there is a growing number of firms interested in nutrition and wellness products," says Ilya Nykin, a managing director of Prolog Ventures, a St. Louis-based venture capital firm.

"People still read food labels and are concerned about their health no matter how bad the economy," he says.

© 2009, The Wall Street Journal. All rights reserved. Reprinted with permission.
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