NVCA

Venture capital investments in the state fell to the lowest level in more than a decade last quarter, yet another sign that the economic meltdown is having a negative effect on the state's high-tech industry.

Venture capitalists invested $76 million in 35 deals during the fourth quarter, a drop of 82 percent over the same period last year, according to the PwC/NVCA MoneyTree Report. The last time venture investments hit that level in the state? Bill Clinton was still in office.

On a quarter-to-quarter basis, investments also took a steep slide. In the third quarter of 2008, venture capitalists invested $234 million in the state. For the year, investments came in just under $1 billion. That's the first time that has happened in two years.

All of the major tech sectors in the state -- from biotech to software to telecommunications -- took a big hit. Nationally, investments fell 26 percent on a quarter-to-quarter basis as $5.4 billion was invested in 818 deals.

"At this point, venture capitalists are doing what everyone else is doing - assessing and reassessing their capital outlays and each and every investment carefully in order to make prudent decisions on what companies have the brightest outlook for the long-term," said Tracy Lefteroff of PricewaterhouseCoopers. The silver lining is that history has proven that true innovation can surface under very challenging circumstances."

Earlier this week, we reported on a competing report from Dow Jones VentureSource that also showed a decline in investments. It reported a 35 percent decline for the year, with $906 million invested in 93 deals in the state.

The message is pretty clear to entrepreneurs. If you were hoping to raise VC cash in the near term, you might be better off hitting up that rich uncle. The tough thing is, he might not be as rich as he was six months ago.