Venture capital investment in Los Angeles was sluggish in the past quarter, according to a pair of reports released last week, but experts say there is reason to be hopeful that the sector can make a comeback.

There were 33 venture investments made in L.A.-area companies in the second quarter, up from 32 in the first quarter and 32 in the second quarter of last year, according to data from Dow Jones VentureSource. However, the amount invested, $206 million, was off by 19 percent from the previous quarter and 38 percent from a year ago.

A separate report issued by PricewaterhouseCoopers LLP and the National Venture Capital Association found 37 local investments for $223 million.

Los Angeles ran counter to national trends. There were 776 deals nationwide totaling $8 billion, both up from the first quarter, according to the Dow Jones data.

Still, Jeff Grabow, the western region venture capital leader for Ernst & Young, noted that the L.A. market had some bright spots, including rising interest in consumer services startups, such as online retailers and new-media companies.

The quarter’s largest investment came in the sector after Santa Monica’s ShoeDazzle.com, an online shoe retailer co-founded by celebrity Kim Kardashian, received $40 million in May from Menlo Park venture firm Andreessen Horowitz.

In total, venture capital firms invested $116 million in L.A. consumer services companies during the quarter, a sharp increase from the previous quarter and previous year.

Grabow said a pickup in public stock offerings could drive a recovery in the venture market. Initial public offerings are the most common exit strategy for venture capital investors, and freeing up that capital will allow investors to fund new startups, he said. Among the companies now looking to go public is visual effects company Digital Domain Media Group Inc.

“There’s a lot of IPO activity going on right now,” Grabow said. “That’s going to drive a lot of investor confidence and it’s going to help the bigger ecosystem.”

Scaling Back

Nara Bancorp Inc., which had planned to raise as much as $150 million in new capital, said last week that it may raise substantially less.

The Koreatown bank holding company had planned a stock offering in connection with a pending merger with local competitor Center Financial Corp. that is expected to close later this year. Executives said the new capital could be used for a variety of purposes including padding loan loss reserves and retiring warrants under the Troubled Asset Relief Program.

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