Venture capital deal volume in the healthcare industry continued its downward trend in the third quarter, according to the latest report from a venture research firm.

The number of third-quarter healthcare venture deals stood at 143, the lowest in at least five quarters, according to New York-based CB Insights. The number represented a decline of 22 percent from the year-ago quarter, but a drop of just 3 percent from the second quarter.

“With chatter about an unfriendly regulatory landscape getting louder and a generally uncertain exit environment, healthcare venture capital continued its consistent trend downwards,” the report said.

Indeed, industry complaints about regulators — never the most popular people with the business community in the first place — has only seemed to grow louder this year.

In a survey of VCs released earlier this month, nearly 40 percent of firms said they had decreased their investments in medical technology companies in the past 3 years, and they expect the slide to continue for another 3 years. The survey was sponsored by the National Venture Capitalists Association‘s Medical Innovation & Competitiveness Coalition.

In terms of dollars, healthcare firms collected $1.7 billion in venture investment during the quarter. That was a drop of 4 percent from the year-ago quarter and a decline of 11 percent from the second quarter.

Still, the report did contain some good news for the health industry, particularly early stage companies: Health investors are increasingly turning their attention to seed deals. As a percentage of overall deals, seed investment (11 percent) hit a record high in the quarter, according to CB Insights.

“The seed VC investment gives investors a relatively low-cost option on companies they invest in,” according to the report. “In essence, these investments require minimal capital outlay and allow an investor to see a business take shape (or not) and then choose to invest in the future.”

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