In the fourth quarter of last year, the average return of all venture capital funds was a negative 10 percent, according to Venture Economics, a research firm.

"Large companies have had terrible luck in acquiring leading technology concerns because you just can't buy entrepreneurial brains," said Mark Radtke, president of Venture Economics.

Mr. Walker's group is the second-largest manager of private equity in the country after Prudential Financial, according to Venture Economics, a research group.

Pension funds have accounted for 40 percent of the $26 billion that venture funds have raised over the last 10 years, according to Venture Economics.

From 1980 to 2000, the number of venture firms in the country skyrocketed from 87 to 693, according to Venture Economics, a firm that tracks the industry.

In 1975, only $10 million in new money flowed into the field, according to Venture Economics.

"We're definitely seeing a growth in services - if not across the board, then very predominantly," said George Moriarty, chief editor of Venture Economics, a trade publication.

For example, venture-capital investment fell from roughly $4 billion in 1987 to under $1.4 billion last year, according to Venture Economics, a research group.

About $22 billion was earmarked for start-up financing in 2000, less than one-fourth the $92.3 billion raised by American funds, according to Venture Economics.

"The faucet has been turned down a bit," said Jesse Reyes, vice president for global product management for Venture Economics.