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Venture capital funding plummeted more than 80 percent in the third quarter, as investors clung to their cash during the recession.

U.S. firms raised just $1.6 billion during the period, the lowest amount since the first quarter of 2003, according to a joint report by Thomson Reuters and the National Venture Capital Association on Monday.

That's an 81 percent drop from a year ago, when 63 firms raised nearly $8.5 billion. It was also a decline from the preceding quarter, when 27 funds raised almost $2 billion.

Venture capital funding plummets 81% in quarter