'That's Not What I Want to Invest In': Venture Capitalists Withheld Billions From Startups Last Year — and Neglected One Urgent Category In ParticularU.S. investors financed just over 3,000 startup funding deals last quarter, a significant drop over the year prior.

Venture capitalcan be critical for a company'sgrowthacross many different stages — but the funds aren't flowing as freely as they once did.

U.S.investorsbacked 3,011 startup funding deals last quarter, about a third fewer than they did during the same quarter last year, and gave $39.8 billion in cash — almost half as much compared to the same period last year, according to Pitchbook data reported byBloomberg.

Related:3 Alternatives to Venture Capital Funding for Startups | Entrepreneur

Angeland seed deals, funding for startups in their very early days, were hit especially hard, seeing half as many funding deals as there were the year before. But Pitchbook analyst Kyle Stanford attributes that in part to excess financing amid the pandemic, where "probably too many" startups raised money.

Worldwide, startup funding dipped nearly 60% — down from $152.9 billion to $87.4 billion year over year, per the data. Some of that dip can be attributed to higher interest rates,Reutersreported.

Even as public tech companies have started to recover, those in the private sector continue to struggle amid few significant initial public offerings and large acquisitions, perBloomberg. The value of those types of deals fell to just $5.5 billion in the U.S., according to the data.

Related:5 Ways Shunning Venture Capital Made Me a Better Leader

According to Stanford, theeconomic climateis causing investors to pull back on previously aggressive growth strategies. "Investors are looking at that saying, 'That's not what I want to invest in,'" he said, perBloomberg. "They're saying, 'I want to invest in a company that has some semblance of a path to profitability.'"