Venture capitalists cut their investment fund-raising in half during the third quarter as they continued to digest the glut of money shoveled into the industry during the Internet feeding frenzy of a few years ago.
Nineteen venture capital funds raised $1.4 billion during the three months ended in September, a 51 percent drop from $2.9 billion at the same time last year, according to figures released Monday by Thomson Venture Economics and the National Venture Capital Association.
The decline continued a trend that began after venture capitalists collected investment commitments totaling $167 billion in 1999 and 2000.
The fund-raising spree left venture capitalists with more money than they could profitably invest, particularly after the dot-com meltdown resulted in huge losses that continue to haunt the industry.
With the economy gaining steam and tech stocks rallying, many venture capitalists believe the worst is over. Nevertheless, the industry still has little need to raise more money, with an estimated $84 billion in previously committed venture capital still sitting on the sidelines.
About half of that $84 billion is reserved for investments in previously funded startups trying to survive, according to Thomson Venture Economics.
