The investments, down 12 per cent from $1.6 billion from the third quarter, were in line with the 8.0 per cent decline at national level, showed the survey released by Ernst & Young and VentureOne, a venture capital research group.
Venture capital investments in all US companies slipped to $4.5 billion in the last quarter of 2004.
However, industry experts cautioned against reading too much into quarterly data, saying trends over several quarters are more reliable. On an annual basis, venture capital investments in 2004 rose to $20.4 billion, after three years of steady decline.
In 2003, venture capitalists invested $18.9 billion, the San Jose Mercury News reported on Saturday.
The paper said that investments into so-called "early-stage" companies were up, with 153 companies nationwide receiving their first round of venture capital during the quarter - compared with 145 during the third quarter.
The drop came in hard-hit areas, such as communications sector, where investments for the quarter were $ 469 mn, lower than any time in at least seven years.
Also, the number of large later-stage investments in biopharmaceutical companies declined to 13, from 23 the previous quarter.
One reason was that investor appetite for initial public offerings of biotech companies returned in 2003, and many companies sought venture investments before going public.
But others argue that start-ups are staying in stealth longer, having learned there are few benefits of talking about their funding, the paper said.