About 70 venture-backed startups collapsed during the first half of this year, compared with 292 in all of 2001.

On the other hand, less are springing up. Only 40 startups were launched between January and June, compared with 160 in the whole year 2001, according to Dolev & Abramovitch Hi-tech Information.

The drop in the numbers of collapsing companies is not because of an upswing in the venture capital industry, says D&A co-managing partner Gilai Dolev. It is because there are simply less companies around, to make it or close.

On the paucity of startup launches this year, venture capital funds are leery of getting into new companies, Dolev explained. Several funds are encountering liquidity problems, and others are grappling with trying to guess what the next "killer app" will be.

Meanwhile, would-be entrepreneurs are reluctant to leave safe jobs to set up a risky startup, he added.