Confirming fears that the U.S. economic slowdown is harming the venture capital industry, a new study has found that venture capital-backed initial public offerings declined "significantly" in the first quarter of 2008 to their lowest level since 2003.

Only five venture capital-backed I.P.O.'s totaling a relatively paltry $282.7 million were issued in the first quarter of 2008, according to a new report by Thomson Financial and the National Venture Capital Association.

The study also found that the venture-backed mergers and acquisitions market saw only 56 deals in the first quarter, representing one of the lowest quarterly levels in the past decade.

"U.S. economic uncertainty clearly impacted the venture-backed I.P.O. market in the first quarter," said Mark Heesen, president of the N.V.C.A. "It was not a great start to the year by any measure and we will need to see a significant increase in volume in the remaining three quarters to salvage the rest of the year."

"This is not an April Fools' Day joke," Heesen added in an interview with Portfolio.com. "I wish it was, but it's not. This is reality."

The bleak industry numbers confirm fears that the nation's slumping economy is pouring cold water on a venture capital and I.P.O. market that was red hot as recently as last quarter.

In a January interview with Portfolio.com, Fred Wilson, general partner of Union Square Ventures, a top internet startup incubator, predicted that the softening economy could hammer the I.P.O. market - and by extension, the venture capital industry writ large.

"There has been a real 'de-risking' of the market, which will certainly affect the I.P.O. market," Wilson said at the time. "That will impact the late-stage venture market, because the I.P.O. market drives the late-stage venture market. And that will slowly impact the early-stage venture market."

Wilson, whose investments include Twitter and Tumblr, said that if the U.S. falls into a recession "it will be less attractive to sell our companies, so we may choose not to do that, and we may choose to continue to finance them and grow them and develop them some more."

"It may mean that we finance our companies differently," he added. "We may finance them for longer periods of time, and take a more conservative approach to how we do the financing rounds."

Heesen confirmed that trend.

"Companies are taking longer before going public, which means that venture capitalists need to spend more money and resources on them, and not new startups," Heesen said. "So the pipeline is getting backed up."