SAN FRANCISCO -Venture capital funds lost 23.3 percent on average during 2002, according to data released yesterday, marking the second straight year of setbacks for the once-giddy financiers of dot-com revelry.

Last year's sharp decline followed an average loss of 27.8 percent in 2001, according to statistics compiled by research firm Thomson Venture Economics for the National Venture Capital Association.

The figures reflect a massive fall from the heights of a high-tech mania that was largely fueled by venture-capital investments in start-ups aiming to cash in on the rise of the Internet. Venture capitalists poured $210 billion into start-ups during the five years ended in 2000.

The high-tech push paid off for venture capitalists for several years, with hundreds of unprofitable start-ups able to raise even more cash in initial public offerings of their stock.

Venture capitalists reaped huge rewards, highlighted by an average return of 165 percent in 1999.

Since Wall Street began to shun high-tech companies nearly three years ago, venture capitalists have been forced to close their worst-performing start-ups and recognize losses on other young companies struggling to survive.

The reckoning has lopped 59 percent from the average value of venture-backed start-ups, according to Venture Economics. The downfall left the average valuation of start-ups at $35 million at the end of 2002, down from $85.8 million at the end of 2000.

Venture capitalists are taking their cues from the tech-laden Nasdaq composite index, which dropped by 46 percent from the end of 2000 through 2002.

Last year's 23.3 percent loss for venture capitalists wasn't as bad as that for the Nasdaq index, which fell 31.6 percent - little solace for the downtrodden industry.

"Last year was the worst I have ever seen it in our business," said 22-year industry veteran Frank R. Kline, managing partner for Kline Hawkes & Co., a Los Angeles venture-capital firm.

"There were just so many broken companies out there," Kline said. "You saw companies that had already [burned] through $90 million in venture capital and still had no business prospects. It was so depressing."

Things were so bad that Kline considered it a minor triumph when his firm sold a start-up at a 69 percent loss. "At least we didn't have to write that one down to zero," he said.

Venture-capital funds typically lose money during their early years, but the trouble piling up in portfolios created from 1998 through 2000 will make it tough for them ever to become profitable, Jesse Reyes, a Venture Economics analyst, said.

By some estimates, more than 10,000 start-ups launched during the dot-com bubble are still in business. Many of them are expected to fail as their money finally runs out. In the process, many venture capitalists are expected to leave the industry.

"We are seeing a lot of shrubs and dead weeds getting cleared out," Reyes said. "Hopefully, what will be left is a good crop of companies."