Canada's venture capital investments dropped 59 per cent in the third quarter compared to activity in the second quarter.

After a very active second quarter, Canadian and foreign investors are now pulling back and creating a decline, according to market figures released today by Canada's Venture Capital and Private Equity Association and its research partner, Thomson Macdonald.

"Third quarter activity levels are disappointing, however, there are often substantial variations in investment volume across quarters in any given year," says Rick Nathan, CVCA president and managing director of Goodmans Venture Group.

Total venture investment in the third quarter was $261 million, down 59 per cent from the $635 million invested in the second quarter of 2005. This drop resulted in year-to-date activity slightly below that of comparable periods in 2004.

In the year-to-date, venture capital investments in Canada amount to $1.23 billion, down approximately 10 per cent from the $1.36 billion invested at the end of the third quarter in 2004. At the present time, a total of 551 firms have received venture capital funding in Canada, which is almost identical to the 560 firms funded in the same period of 2004.