70% Drop in Venture Capital Deals, Funding

The number of U.S. venture capital deals and the total of venture funding both plunged about 70% in the last quarter, reflecting the economic slowdown and tougher conditions for technology firms, according to a report issued Monday.

But even after the sluggish quarter, the amount of venture investment for the full year is on track to reach $35 billion, making the year the third-best ever, according to industry newsletter VentureWire.

Third-quarter venture investments totaled $6.7 billion, down 72% from $23.9 billion in the same quarter a year earlier and down 30% from the second quarter.

The number of private firms receiving venture capital dropped to 540, down 67% from a year earlier.

The marked slowdown in deals and funding was under way well before Sept. 11, but the subsequent business disruptions slowed activity dramatically in the third quarter’s closing weeks, VentureWire said.