Now that 2008 is over, we can officially declare it the worst year for U.S. venture liquidity since 2003 (when the industry was still feeling the effects of the bursting tech bubble). This year, venture-backed companies generated $24.1 billion through initial public offerings (IPOs) and mergers and acquisitions (M&As), down 58 percent from $57.6 billion in 2007, according to Dow Jones VentureSource.

That drop is particularly worrying when you consider that most of the deals happened before the financial industry’s collapse in September and the resulting stock market plummet, so you can expect early 2009 to be even worse. A better indicator of the months ahead is the fourth quarter alone, when there were no IPOs, and M&As only generated $3.9 billion — the lowest amount in a single quarter since 1999. Meanwhile, the $551 million earned from IPOs during all of 2008 marks a drop of more than 90 percent from 2007, and is the lowest total since VentureSource started tracking this data in 1992.

Venture firms aren’t just making less money, either; they also have to wait longer for their investments to pay off. The median time to exit via M&A was 6.5 years, and the median time to IPO was 8.3 years — both numbers setting new records for length.

So there’s got to be some good news on the horizon, right? Well … it depends on how far out you’re looking. The venture capitalists surveyed recently by the National Venture Capital Association said the IPO market won’t open until 2010. We’ve also predicted that tech IPOs will be scarce for all of this year.

Here are the year’s top M&As, according to VentureSource:

And here are the top IPOs: