For local startups hunting for venture capital, times haven't been this tough since 1996.

Venture capitalists pumped $399.00 million into Philadelphia area startups in 2012, according to the latest MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association (NVCA), based on data from Thomson Reuters.

It was the first time in over 15 years that Greater Philadelphia failed to top $400 million in investment.

 

Data: PricewaterhouseCoopers/National Venture Capital Association Money Tree Report.

We reported back in July that 2012 was on pace to be historically slow. Well, now it's official.

"It is not surprising," said Dean Miller, managing partner at Wayne, Pa.-based Novitas Partners and CEO of the Greater Philadelphia Alliance for Capital and Technologies.

The poor showing post-recession reflects a "flight to safety" by big-time investors, Miller says. They're skipping over Philly for more established tech markets.

Nationwide, venture capital investment in 2012 dipped 10 percent in dollars and 6 percent in number of deals over to the prior year.

Regionally, investment fell nearly $60 million compared to 2011.

It wasn't all bad news, however. Area deal-making remained flat in 2012. Local firms sealed 119 pledges, exactly the same number as in 2011.

So what?

Well, the TL;DR version is that smart money may be looking elsewhere. Whether that means there's few growth-stage companies worth investing in or that the region is a hidden gem depends on your point of view. (Really, it probably means there's not many venture capital firms around here.)

That leaves plenty of questions. What of these startups you hear so much about? Without VC will they struggle to grow? Will they flee for greener pastures? Will the next generation of entrepreneurs just skip Philly altogether and start their Next Big Thing closer to the money?

I don't know. But those are the questions. If startups are being billed as the job-creation engines of the new economy, then they're also the questions worth asking. 

Especially with a new round of public funding about to enter the equation.