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When it comes to venture capital, there’s bad news for entrepreneurs and then there’s worse news.

Let’s start with the bad news. According to a new report from the National Venture Capital Association, startups in the U.S. raised $15 billion in venture capital during the third quarter ending September, down 28.6 percent from $21 billion for the same period one year ago.

It’s also a big drop from the $22 billion invested second quarter of 2016, ending in June, according to the report known as “PitchBook-NVCA Venture Monitor.”

Okay, the worse news. There was a steeper drop in the number of companies raising money. In the third quarter, 1,800 companies raised funds, down 30 percent from the same period a year ago.

“As companies have secured massive amounts of capital over the last few years, investors have looked to utilize a more targeted approach to how they invest, which encompasses making fewer but larger bets,” says the report. “The third quarter marked the fifth straight quarterly decline in completed financings and the lowest number recorded by PitchBook since 4Q 2010, signaling that investors are writing bigger checks for fewer deals.”

So, if you’re just at the starting line, things are getting tighter.

Now, here’s a bit of a silver lining: 2015 was a massive year for venture capital investing. If things continue at the current pace, according to NVCA, 2016 would be on track to see $74 billion in VC investment, as much as we saw in 2014.

Also worth noting: This slowdown hasn’t impacted the raising of new venture funds. According to the NVCA, $32.4 billion has been raised by 201 funds so far in 2016, which could lead to a new record this year. So the question may be whether those growing war chests are primarily going to target late-stage companies, or whether some more of that bounty may eventually trickle out to fresh startups.

“While venture investment activity is moderating a bit, venture investors remain very active supporting the growth of great companies that will define the future of our economy,” Bobby Franklin, President and CEO of NVCA, said in a statement.

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