Private Equity Fund Raising Tanks in 2009

According to Dow Jones LP Source, private equity fund raising took a brutal beating between 2008 and 2009. This is bad news for the high tech industry because it means there will be that much less money available to put into companies and deals, and investors are likely to be trying to bank on a sure thing rather than pay attention to what might be seen as more marginal opportunities. In other words, if they don't know you already, they may not want to.

A combination of 331 funds raised $95.8 billion, down a full 68 percent from the $299.9 billion that 508 funds brought in the previous year. And it's not as if 2008 had been a banner time for bringing in money. In the fourth quarter, the sum was down 80 percent between 2008 and 2009, which suggests that the money flow is slowing even more. Here are some of the drops by investment sector:

The secondary market was the only one showing a gain, but that was largely due to a big year for a few large funds. Even though venture capital companies fell significantly in their fund raising, they still did relatively well compared to most of the industry. Start-ups that are moving beyond the introductory stage and looking to raise additional money to keep going may not be happy to hear that mezzanine funds raised only $3.3 billion, down 92 percent from 2008's $43.1 billion. That is going to put the breaks on a lot of young companies that will end up broke without additional funding.