New York, N.Y. – Fundraising by venture capital firms totaled $1.7 billion in the third quarter this year, down 53 percent from the same period last year, according to newly released statistics from the National Venture Capital Association (NVCA).

A recent lack of successful initial public offerings explains the sheer drop in fundraising activity, according to Mark Heesen, president of the NVCA.

“Economic instability continues to impact the ability of venture-backed companies to go public which, in turn, has prevented many venture firms from delivering solid returns to their investors,” Heesen said in an announcement. “Until we begin to see a steady and sustainable flow of quality IPOs which return cash, limited partners will remain on the sidelines and the venture industry will continue to contract.”

There were 33 follow-on funds and 19 new funds raised in the third quarter, according to NVCA. Fundraising was led by Shasta Ventures Management and Longitude Capital Management, both based in Menlo Park, Calif., which raised $265 million and $159 million respectively.

This article was also published in New England Tech Wire.

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