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A Tough Quarter for Venture Capitalists

Mark Marich

The latest data from the National Venture Capital Association show that venture capitalists have had a tough 2009 so far.

Forty VC funds raised only $4.3 billion in the first quarter of 2009, representing one of the slowest quarters in recent years. Even worse news comes from a look at exit activity. No venture-backed initial public offerings (IPO) occurred in the first quarter, marking the first time on record when the industry has faced two consecutive quarters without an IPO. Mergers and acquisitions (M&A) activity was also slow, with only fifty six deals completed this year. This is the lowest level of activity (in terms of deal volume) for many years.

Mostly, the decline hit industries across the board.The only industry sector to experience an increase in both dollars and deals in the first quarter? Financial Services. This sector garnered $108 million into 17 deals, an increase of 26 percent and 21 percent in dollars and deals respectively. Opportunities abound.

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