Venture capital transaction volume dropped about 8.5% in the first quarter over the fourth quarter of 2007, according to data released over the weekend by the MoneyTree Report from PricewaterhouseCoopers LLP, New York, and the National Venture Capital Association, Washington.
Another survey by Dow Jones VentureSource, San Francisco, pegged the deal flow decline at 7%, which the company said was the lowest level since the first quarter of 2005.
Although transaction volume generally is slow in the first quarter, the economic environment and the credit crunch have made it difficult for venture capital firms to exit their investments by taking their companies public or selling them.
Venture capital firms invested $7.1 billion in 922 deals in the first quarter vs. $7.8 billion in 1,045 deals in the fourth quarter of 2007, the MoneyTree survey revealed. Venture capital firms investment in the first quarter of 2008 was down 5% compared to the first quarter 2007, according to MoneyTree data. Dow Jones reported similar numbers, with venture capital firms investing $6.8 billion in the first quarter of this year, compared to $7.35 billion in the first quarter of 2007 and $7.5 billion in the fourth quarter of 2007.