The IPO market remains weak. Source/Dow Jones

The market for initial public offerings remained stagnant in 2009 as just eight venture-backed companies went public. That compared to seven IPOs in 2008, hardly the liquidity that venture capitalists need for solid returns.

Meanwhile, the overall liquidity for venture-backed companies -- including IPOs and mergers and acquisitions -- declined by 34 percent during the past year to $17.1 billion. But the Dow Jones VentureSource report did offer a few bright spots. Deal making surged during the fourth quarter.

According to the report, 86 venture-backed companies were acquired during the fourth quarter for a total of $7.3 billion. And three companies completed IPOs, raising $220 million.

That meant 44 percent of the year's liquidity occurred during the fourth quarter, a positive sign that the M&A market may continue to gain momentum in 2010.

“The fourth quarter has set the stage for an active year in M&As in 2010,” said Jessica Canning, director of global research for Dow Jones VentureSource in a release. “As the economy improves, acquirers are gaining confidence in their own financial situation and returning to strategic acquisitions."

Amazon.com's $847 million purchase of online shoe retailer Zappos was the largest acquisition of the year. And Washington state actually saw its first venture-backed IPO in two years during the fourth quarter as Seattle biotechnology company Omeros Corp. went public on the Nasdaq.

Some venture capitalists are actually hopeful that the IPO market could improve in 2010. Currently, 25 venture-backed companies are waiting to go public.

But Mark Heesen, president of the National Venture Capital Association, recently told a group of Seattle area venture capitalists that even 30 venture-backed IPOs would be an "abysmal number.

"...Eighty to 100 IPOs is a decent year. And I am not saying we should go back to 1999 or 2000," he said. "But if you really want to see (limited partners) get checks at the end of the day, you need 100 to 140 IPOs. And that's not where we are right now by any means."

Here's a deeper look at some of the numbers from Dow Jones.

John Cook is co-founder of TechFlash. Follow on Twitter @johnhcook.