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Venture capitalists are the latest addition to the long list of interest groups feeling the sting of the down economy.
Venture capital firms raised $1.7 billion in the second quarter of 2009, hitting a six-year, according to a report by Thomson Reuters and the National Venture Capital Association.
Venture capital firms are typically made up of institutional investors -- such as banks, universities or endowments -- or high net-worth individuals, who seek to invest in small companies with a potential to take off.
The news comes at a time when some lawmakers on Capitol Hill are hoping to make the federal Small Business Administration friendlier to venture capital interests.
This past quarter's total of $1.7 billion was just one-fifth of what was earned during the second quarter of 2008, and less than half of what was raised during the first quarter of 2009.
"The slower venture fundraising activity is no surprise given the current environment," Mark Heesen, president of the NVCA, said in a statement. "The final manifestations of the bubble burst combined with a troubled exit market make it a very difficult time to raise money. We believe that many venture firms are waiting until 2010 and beyond to go out to their limited partners who, in an improved market, will look more favorably upon the asset class vis-a-vis other alternatives."
While the $1.7 billion represented the lowest amount of dollars raised since the first quarter of 2003, the number of venture-capital funds -- 25 -- hit a 13-year low.
There was some good news. The number of new funds (eight) versus follow-on funds (17) reached a four-quarter high.
