SAN FRANCISCO (Reuters) - Investments in start-ups fell 5 percent to $7.1 billion during the first three months of 2008 compared to the year-ago quarter, signaling that venture capitalists may be less willing to open their wallets during a U.S. economic downturn.

Venture capitalists invested $7.5 billion in last year’s first quarter, according to data released on Saturday by the National Venture Capital Association, PriceWaterhouseCoopers and Thomson Reuters.

Despite the decline, the 2008 first quarter saw the fifth-highest level of investment for the period since 2001.

Venture capitalists invested in 922 deals in the latest quarter, compared to 861 deals in the year-ago period.

“We do not expect to see significant declines in investment levels in the coming year,” said NVCA President Mark Heesen.

But he added that more venture capital dollars could go into late-stage companies if the market for initial public offerings remains weak.

Venture capitalists usually invest in companies at an early stage of development and profit by taking them public or selling them to a bigger company.

But with the ongoing stock market uncertainty, IPOs of VC-backed companies fell dramatically in the first quarter, with only five such companies going public compared to 18 in the year-ago quarter.

If the public markets remain daunting, venture capitalists may have to put more money to sustain mature companies that they cannot take public.