Venture Capital Drying Up Amid Financial Squeeze
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As it becomes increasingly difficult to cash out of their previous investments, venture capitalists are gradually closing their financial spigots in what could be the start of a long, dry spell for entrepreneurs.
Although a drought hasn't set in yet, it's looking inevitable as the ripple effects of a worldwide financial crisis rattle venture capitalists.
The trepidation was evident in the third quarter when the venture capital flowing to startups totaled $7.1 billion. That's a 9% decline from the same time last year, according to data being released Saturday by Thomson Reuters, PricewaterhouseCoopers and the National Venture Capital Association.
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It marked the largest decrease since the spring of 2003, when the industry was still recovering from losses sustained in the dot-com bust.