VCs are feeling the heat from the recession. Money, both outgoing and incoming, isn’t drying up completely, but the numbers keep going down. In terms of exits, during the first quarter of 2009 there were zero venture-backed IPOs and only 56 M&A transactions, according to the National Venture Capital Association, down from five IPOs and 106 M&A exits in the first quarter of 2008. The disclosed value of those M&A deals in the first quarter of 2009 was $645 million, down from $4.5 billion a year ago.
And money going into venture funds from limited partners has also plummeted over the past year. Only 40 funds raised new money during the quarter, down from 71 the year before (1Q08) and 47 the previous quarter (4Q08). In dollar terms, the total raised in the first quarter was $4.3 billion, down 39 percent from the year before (1Q08).
And now we are waiting to find out how much money VCs put into startups during the first quarter. Mind you that VC investing for the fourth quarter of 2008 already hit a low, with the total dollar amount invested in venture financings at $5.4 billion, down 33 percent from the fourth quarter of 2007 (when it was $8.09 billion). That number was also down 26 percent from the third quarter of 2008 (when it was $7.3 billion). We’re not too confident that the report card for the first quarter of 2009 will be any better. Considering the continued drops in exits and fund inflows from LPs, the number might not be pretty. So how bad will it be? Take your guess in the poll below.