Venture capitalists raised less money and spent less money in 2008 than they did the previous year according to the MoneyTree report, a survey of venture-capital activity released on 24 January.

But not everyone emerged a loser. Investment in the fashionable clean-technology sector — encompassing everything from renewable energy to cleaner building materials — swelled by 52% last year to US$4.1 billion. "We believe that regardless of how poor the economy is, you're going to see a very strong interest in the 'cleantech' sector over the next several years," says Mark Heesen, president of the National Venture Capital Association (NVCA), based in Arlington, Virginia, which produced the report with consultants PricewaterhouseCooper.

Biotechnology did not fare as well. Investment in the industry dropped by 14% to $4.5 billion, close to the level of investment it received in 2006. In the fourth quarter — probably a better indication of how the industry will fare in 2009 — investment was 23% lower than in the fourth quarter of 2007.

Venture capitalists raised $28.0 billion for their investment funds in 2008, 21.4% less than in the previous year, and the number of mergers and acquisitions of venture-backed companies declined from 360 to 260. Only 6 venture-backed companies went public via an initial public offering, compared with 86 in 2007.

This trend may have actually helped young companies, says David Brophy of the Stephen M. Ross School of Business at the University of Michigan in Ann Arbor, because venture capitalists may turn to earlier-stage deals in the hope that the market will have recovered by the time the companies mature. Last year, the youngest of companies — 'seed' companies — received a 19% boost against the backdrop of an 8% decrease in total venture-capital investment.

Brophy says that the venture-capital community will probably experience a bigger hit in the coming year. But for some, 2008 was not as painful as expected. "Most were thinking it was going to be a bloodbath, but we didn't see that," says Heesen.

And by today's standards 'not a bloodbath' sounds refreshingly optimistic.