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Second study: VC-backed exits on the downslide

In the first three months of 2008, liquidity generated by mergers and acquisitions and initial public offerings of venture-backed U.S. companies drops to $8.2 billion, the lowest quarterly total since the fourth quarter of 2005.

A new study piles on the dour news for venture capital-backed exits.

A day after the National Venture Capital Association reported that VC-backed IPOs and merger deals have fallen to near-quarterly lows of recent years, another study came out to say the same thing.

In the first three months of 2008, liquidity generated by mergers and acquisitions and initial public offerings of venture-backed U.S. companies dropped to $8.2 billion, the lowest quarterly total since the fourth quarter of 2005, according to a study released Wednesday by Dow Jones VentureSource.

The first quarter saw 80 mergers and acquisitions worth about $7.8 billion in liquidity, down from 105 deals worth about $10.2 billion in the comparable period of 2007. IPOs for the period were in a slump, too. It reported that only six U.S. venture-backed companies went public in the first quarter, raising about $392 million, a 67 percent decline from the same period a year ago.

"The first place that venture capital investors will feel effects from the broader financial markets is in the liquidity market, and we're certainly seeing the turbulence and economic uncertainty constrain exit opportunities for private companies right now," Jessica Canning, global research director for Dow Jones VentureSource, said in a statement.