An investment slump in the US venture capital market, which has fallen to its lowest level in four years, heralds a continued slowdown in early-stage private equity investment across Europe and the rest of the world.

A total of $3.9bn (€4bn) was invested in the US in the third quarter of 2002 - roughly half the volume invested this time last year. More than $14.6bn has been invested so far this year, compared to $34.6bn for the whole of 2001. Deal flow has also declined by a third, according to the Ernst & Young and VentureOne research.