SAN FRANCISCO - Venture capitalists are bracing for their toughest year since the dot-com bust as they try to survive the bursting of an even bigger investment bubble.

The bleak outlook that emerged in a survey released Wednesday isn't a surprise, given the economic havoc wrought by a credit crisis that began with a reckless home lending spree on the heels of the last U.S. recession in 2001-2002.

That last downturn was triggered, in part, by venture capitalists' ill-advised investments in unprofitable Internet companies, a splurge that also reeled in stock market investors before eventually collapsing. The fallout saddled venture capitalists with huge losses, prompting them to decrease their investments in 2002 and 2003.

This time around, venture capitalists are caught up in an even larger mess that had far less to do with their investment choices. "Today's issues are systemic, with broader, deeper reach and a longer duration," said Roger Novak, a general partner with Novak Biddle Venture Partners in Bethesda, Maryland.

To cope, most venture capitalists are planning to curtail their investments in startups while remaining on the lookout for possible bargains.

If the recession worsens, companies that already have gotten funding from venture capitalists might be under pressure to sell at a discount if they aren't already making money on their own.

And there should be opportunistic buyers lining up, reasoned Rory O'Driscoll, managing partner for Scale Venture Partners in Foster City, California.

"Unlike 2001, these are companies with viable and efficient business models that are cheap — not because they are broken but because the world is broken," O'Driscoll said. "Once the world heals, they will bounce back strongly."

But a rebound isn't likely next year, based on the survey of 400 venture capitalists polled in the United States from Nov. 12 through Dec. 12 by the National Venture Capital Association, the industry's main trade group.

Fifty-six percent of the VCs predicted the economy would worsen next year while another 25 percent expect the dreary conditions to remain the same. Only 19 percent forecast better times by the end of 2009.

The tough atmosphere will depress investments, according to 92 percent of the surveyed venture capitalists. Those findings echo another poll of venture capitalists released this month by KPMG LLP.

Venture capital investments have been on the upswing since 2003, although there could be a slight dip when this year's final numbers are added up.

Extending recent trends, 48 percent of venture capitalists expect money to continue to pour into "clean technology" — alternative energy and other projects aimed at causing less pollution. Twenty-five percent of the polled venture capitalists believe biotechnology investments will rise next year.

"There is no recession on innovation and great ideas will get funded," said Mark Heeson, president of the National Venture Capital Association.

But entrepreneurs involved in semiconductors, media, entertainment and telecommunications will likely have a particularly hard time raising money next year. The vast majority of venture capitalists said investments in those niches will fall next year.

Venture capitalists themselves expect to have a hard time raising money, with 96 percent of the survey respondents predicting their investment partners will be reluctant to contribute to funds next year. Some pension funds and college endowments may even try to sell their existing venture capital stakes to adhere to asset-allocation requirements dictating how much exposure they can have in higher risk investments.

The stock market's turbulence is expected to close another important financial avenue for venture capitalists. To realize a return on their investments, venture capitalists typically groom their portfolio companies for initial public offerings of stock.

Just one venture-backed company, Rackspace Hosting Inc., has gone public in the past nine months. Nearly three-fourths of the polled venture capitalists expect the IPO drought to extend through 2009.

Venture capitalists like Venky Ganesan of Globespan Capital are betting the economy will be on the mend in 2010. "We will need to take strong medicine now and if we do, I am very optimistic for the future," he said.