The window of opportunity for Initial Public Offerings (IPOs) is almost closed according to a report released by the National Venture Capital Association (NVCA) in conjunction with Thomson Reuters. The report points out that the third quarter of 2011 was the weakest quarter since the end of 2009. Here are some salient numbers:

• Q3 2011 saw five venture-backed IPOs valued at $442.9 million, down 92 percent in dollar value compared to the second quarter of 2011 and a 65 percent drop in dollar value from Q3 2010.
• Four of the five IPOs were from the information technology (IT) sector versus 14 of the 21 IPO during Q2 2011.
• Of the four IT IPOs, there were two Internet companies, one hardware and one software company. Among the notable IPOs during the quarter: Zillow.
• Four of the five IPOs of the quarter were based in the United States, while Tudou.com is from China.
• For the third quarter, 101 venture-backed M&A deals were reported, 35 had an aggregate deal value of $6.3 billion.

It is not a surprise Kayak delayed its offering and the Groupon deal is on shaky ground. The broader economic troubles are slowing demand for all kinds of stocks and IPOs are no different.

In case you were wondering: what was the impact on startups? Nothing in the near term, especially for companies that are relatively small and are still in the early stages of their life.

In addition, the companies that are being accorded jaw-dropping billion dollar plus valuations also have their work cut out. The troubles with the Groupon IPO are indication that there are no quick exits, despite what you might read, and companies need to grow into their valuations.

From the M&A perspective, 2011 is turning out to be softer than 2010, though in pure deal numbers. So far 310 deals have been announced in 2011 versus a total of 431 deals last year. It shouldn’t surprise anyone if we see a rapid escalation in M&A activity, especially if the IPO window continues to be shut.