A tough year for U.S. venture capital fundraising

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You know it’s a bad time to be a start-up if even the guys who give money to start-ups are short on cash. And 2009 was one of those times.

New information out today from Dow Jones LP Source indicates that venture capital fund-raising hit a six-year low in 2009. Firms raised just $13 billion last year, less than half of the $28.7 billion they raised in 2008. In the fourth quarter of 2009, firms raised $4.4 billion, a 56% drop from the same period in 2008.

Analysts warned this drop-off might be part of a long-term trend.

‘The venture industry is unique in the private equity landscape because it has fallen victim to both the economic downturn and questions about whether the current industry model works,’ said Jennifer Rossa, managing editor of Dow Jones Private Equity Analyst.

Late-stage funds saw the steepest decline in fundraising. Eight late-stage funds raised $781 million in 2009, a 78% decrease from 2008.

-- Alana Semuels