New Enterprise Associates has pumped more than $200 million of its $2.3 billion fund into 18 companies this year. In two deals, DataCore Software and a wireless play called Megisto Systems, NEA had to turn away other firms keen on getting in. In the dot-com craze newcomers like investment banks and new-money angels drove up the prices of equity stakes; now the rookies have retreated. "We like to say that the tourists have all gone home," says Peter Barris, NEA's managing general partner.

Today's typical first round totals only $10 million or so; a year ago it could have gone as high as $40 million. A mere $5 million investment can now buy a hefty stake of 20% or 30%. "Plus, the money now goes twice as far," says Robert Roeper of Venture Investment Management in Boston. "Talent is cheap, real estate is cheap, equipment is cheap--everything is cheap."

Though some 1,300 VCfirms operate in the U.S., fully half of the $45 billion in idle cash is held by only 35 huge funds, says Jesse Reyes of Venture Economics. The big guys--such heavyweights as Bain Capital and Warburg Pincus, managing billion-dollar war chests--often make large investments in late stages but now are holding back; that makes the venture business look as if it's at a standstill when it isn't. The smaller players are bankrolling this new surge in investment.

"Our job is to buy low and sell high," Doll says. "In the last five years we could sell high, but we couldn't buy low." Times are better now--at least for the VCs.