Climate shift: VC funding is drying up.(Brief Article)

Massachusetts' private equity firms couldn't escape the national slump besetting venture and buyout funds, according to a report by Venture Economics.

Bay State firms continued to raise money, but found they couldn't match the stratospheric funding levels achieved as recently as the fourth quarter of 2000, as institutional investors, shaken by stock market and economic turmoil, proved less willing to turn their capital over to the turbulent private equity sector.

"It's a tough fund-raising environment," said Jesse Reyes, vice president of global product management for Newark, N.J. based research firm Venture Economics.

What does this mean for capital-famished …