Looking back on what became a tough end to a tough year for the retail sector, the one bright spot was the online sector. Shoppers whipped out their plastic at a record rate on Black Friday, a trend that continued throughout the season.

The Amazon (AMZN) Kindle killed the competition, reinforcing the status of the online channel as the future of the retail business. Social media, in particular, had its first real test this year, as many companies -- including Best Buy (BBY), JCPenney (JCP) and Target (TGT) -- used the likes of Twitter and Facebook to engage customers, publicize sales and generally increase revenue. The next stage in the evolution, of course, is to use shopping behavior to trigger viral results.

The private equity market was hit hard by the financial crisis last year, but it's already on the road to recovery, according to a new report by Preqin (pdf).

From the first quarter to the second, this year, increasing returns and valuations have given investors a reason to hope, even though the industry's average return is down 24.1% for the 12-month period ending June 30, 2009. The negative return still outpaced the S&P 500, MSCI Europe and MSCI Emerging Markets indexes, the alternative investment research firm says, which returned -26.2%, -34.1% and -27.8%, respectively -- and the 12-month average improved from -30% for the year-long period ending March 31, 2009.

The amount of investable assets available to venture capital funds has basically been a growth story since 2003. Dry powder slipped 7% in 2004 and 10% in 2008, but increased in every other year over this period.

Now, the dry powder number sits at $155 billion, according to alternative investment research firm Preqin, just off its December 2007 peak of $160 billion. The big number, however, masks a wide range of market situations for venture capital funds. Dry powder levels vary by strategy and region. To get a sense of what's going on behind the scenes, check out the five facts below about venture capital dry powder.

Venture capital funds found 612 companies in which to invest $3.67 billion in Q2. Of this, $1.5 billion (41%) was first-time financing, according to a report by PricewaterhouseCoopers and the National Venture Capital Association. This is only slightly ahead of the action in Q1, in which 141 transactions were first-time, and far behind the pace we enjoyed earlier this decade.

The biotech sector was the big winner in a shrinking market, with funding up 54% to $888 million over 85 deals. The software business was flat quarter-over-quarter at 4644 million over 135 transactions. Investments in internet companies fell 15% to $524 million via 124 deals. Clean technology showed considerable growth, up 15% to $274 million, with 42 transactions closed.

Several months ago, I talked to a VC, who was kind of glum. He said: "M&A as an exit is OK for our investments. But the big returns come from IPOs. And, if things don't comeback on that front, it will be trouble for the VC industry."

Well, according to a recent piece in SiliconValley.com, there may be hope.

For example, there have been a variety of strong tech IPOs recently. Examples include: Riverbed Technologies, eHealth, and Acme Packet.

In fact, this week, we saw strong performances from Isilon Systems and IPG Photonics.

Interestingly enough, the bad-times may have meant stronger VC-backed companies. That is, they had to focus on building strong business models.

So, while the IPO market is starting to comeback, investors are getting quality deals.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.