After the drought.

The author reports that the venture capital industry is starting to rebound, and asks whether the industry can avoid the excesses of the 1990's. It like only yesterday that start-up companies, preferably doing something internet-related, and the sleek-suited venture capitalists who funded them, were all the rage. They make their money by investing in start-ups and very young companies and then selling these investments on, either to other firms through so-called "trade sales" or to other investors through a stockmarket flotation.The downturn has been more intensely felt because the venture-capital (VC) industry enjoyed an extraordinary period of easy money during the bubble. Now, however, there are signs of revival. That is reassuring investors, for whom the allure of venture capital is the good long-term returns that should come from betting on a portfolio of young, mostly technology-related, companies. While technology investing is becoming fashionable again, VCs never lost their fondness for health-care start-ups. The lure of biotechnology and drug development has always proved irresistible, even though returns, so far, have been disappointing. Like American venture capitalists, European firms are returning to better days, although they never suffered as big a bust. But the real question facing the VC industry is whether, in better times, it can maintain discipline.