Never mind the apocalyptic drop in funding for VCs, what would have really killed off the industry would have been financial regulations.   According to the Wall Street Journal, looks like these have been stopped by Barney Frank.

As a rule, VCs carry no debt, don’t use derivatives and don’t trade in the public markets. Since they had nothing to do with the credit meltdown, it remains a mystery why Treasury Secretary Timothy Geithner urged Congress to force them to register with the SEC as investment advisers, subject to staggering compliance burdens.Mr. Frank’s planned stay of regulatory execution will have a positive economic impact disproportionate to the small size of the VC industry. Venture-backed companies are responsible for supporting firms that now generate more than 20% of U.S. GDP and are needed more than ever to ignite a rebound in private-sector jobs.

From the Wall Street Journal

Hopefully this will lead to a revival of fortunes in VC land, although it’s probably false hope until the other end of the equation (SarbOx) is also dealt with…