Not to state the obvious, but the first quarter wasn't exactly a great time to be looking for venture capital. VCs invested only $202.3 million in companies based in Los Angeles, Orange, Riverside and San Bernardino counties. That's down 49 percent from a year earlier. Including San Diego and other areas of Southern California, venture funding totaled $672 million, down 42 percent. Regional boosters will be happy to know that despite the big drop, Socal reclaimed the nation's number two VC position from New England (Silicon Valley is in the top spot, as always). Nationwide, venture capital investment fell 7 percent.

The VC industry is typically insulated from the effects of an economic downturn, which makes sense considering that most of these investments go out several years - at which time the economy will no doubt improve. That said, the temptation is to put off any dealmaking that involves upstarts. VCers seemed more comfortable with later-stage financing as opposed to seed and first rounds. Health care was an especially weak area during the quarter, while information services (as in all things Internet) did well. Here's the release from Dow Jones VentureSource.