Led by the IT sector, 31 venture-backed companies raised over $3 billion in initial public offerings in the fourth quarter, the highest quarterly volume in seven years, according to the National Venture Capital Association.

For the year, a total of 86 companies went public for $10.3 billion, compared to 57 companies for $5.1 billion in 2006, the report said.

At the same time, the number of mergers and acquisitions of venture-backed firms dropped to 304 from 363, with a combined disclosed value of $23.7 billion.

As of last week, 58 percent of venture-back companies that went public in 2007 were trading at or above their offering price, the report said.

"The past year was marked by improving quality of both venture-backed IPOs and M&A transactions," Mark Heesen, the trade group's president, said in a statement.

Heesen said he would like to see more than 100 venture-backed IPOs and 350 or more acquisitions in the year ahead. "But we don't want to sacrifice quality to hit that threshold," he added.