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Why Investors Are Suddenly So Secretive

Why venture capitalists are increasingly choosing to keep their latest deals under wraps.

Venture capitalists used to trumpet their latest deal in a self-congratulatory press release, but not anymore. VCs have noticeably cut back on the information they release about their portfolios. Falling start-up costs among Web companies and flush VC funds are to blame. If you announce a deal too soon, you're basically begging for a quick rip-off with the same business model and plenty of available funding, explains Walter Kortschak, of the Silicon Valley office of investment firm Summit Partners.

Another factor: In January, to the horror of the private equity world, the Ohio Bureau of Workers' Compensation asked a state judge for permission to publish information on the VC firms in which it invests--including company valuations and rates of return. The move for full disclosure came in the wake of revelations that the public agency had squandered about $13 million in investments in rare coins. Though some states are moving to protect VCs from having to make such disclosures, the issue has caused investment firms to be uncharacteristically publicity-shy.

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