Venture-backed liquidity fell by 57 percent in the second quarter as venture capitalists generated their lowest merger and acquisition deal total since 1999, according to Dow Jones VentureSource.
Overall venture-backed liquidity was $2.8 billion in the second quarter compared to $6.48 billion during the same period a year ago.
Also during the quarter, venture capitalists closed $2.57 billion in mergers and acquisitions of 67 portfolio companies compared to the $6.48 billion raised in 89 deals a year earlier. The median amount paid for a venture-backed company was slightly less than $22 million, a 46 percent drop from the nearly $41 million median price commanded by venture-backed companies in the second quarter of 2008.
VentureSource said the drop in valuations could be “correcting the possibly inflated figures posted in 2007.”
Three venture-backed companies hit the public market in late May and June and raised a total of $232 million. In the previous 13 months, only one other venture-backed company completed an IPO, and that was last August.
Using that small sample, VentureSouce found that companies raised 30 percent less prior to going public than they did a year ago and had taken 4.5 years to do so, rather than the median time of six years recorded in the second quarter of 2008.
