The fund-raising climate for start-ups in Europe just keeps getting worse. According to new figures from market research group Venture One and accountants Ernst & Young, only €1.2 billion of venture capital money was invested in Europe in the first quarter of 2002.

That represents a fall of 76% from the same period in 2001, and down 32% from the fourth quarter of 2001."I'm surprised at how miserable it was," admits Stuart Watson, head of Ernst & Young's UK VC advisory group. Ireland, he says, fared particularly badly in the last quarter with VC investments plunging 87% to just €12 million.

There seems little hope of a quick upturn. But Watson advises those start-ups in need of cash to knock on the doors of Europe's largest VCs, such as UK firm 3i. "It was the top player in Europe, notching up 26 deals in the first quarter of this year," he purrs.