Yesterday The 451 Group published Open to Investment, the latest CAOS research report, which examines the past, present and future of venture capital investment in open source-related vendors.

The report contains analysis of the history of venture funding in open-source-related firms between 1997 and 2008, based on The 451 Group’s database of more than 370 funding deals.

It also contains results from a survey of investors from private investment firms, assessing their sentiment toward open source and the likely impact of economic conditions on investment in these vendors.

Among the key findings:

• Since the first venture investment in an open source vendor in 1997, $3.2bn has been raised by 163 open source vendors through 378 separate funding deals.

• The report identifies 57 vendors that are most likely to be considering further funding in the next two years based on the length of time since their last funding round and the total raised to date.

• Private investors anticipate that current global financial conditions will accelerate the adoption of open source software in 2009 and 2010 and, given that, they are more inclined to make investments in 2009.

• However, a 100% open source software-licensing strategy is incompatible with the demands and requirements of private investors.

Depending on your perspective that last finding will likely seem blindingly obvious or highly controversial. What we found is that while the investors we spoke to were much more likely to invest in open source-related vendors than proprietary vendors in the current climate, they preferred vendors that take a hybrid approach to software development and licensing.

We also asked investors to choose from between five different licensing strategies for an imaginary startup (hybrid open source/proprietary, hybrid open source/SaaS, hybrid proprietary/SaaS, 100% proprietary, and 100% open source). Not one investor was more likely to invest in a vendor with 100% open source licensing.

The report also covers:

• The likely impact of economic conditions on open source adoption.

• The prospects for M&A involving open source vendors in 2009.

• The seven vendors we think might be best positioned for a run at an IPO in the 12-24 months after the downturn ends.

• A high level view of investment trends between 1997 and 2008.

• The primary benefits of open source, from the perspective of investors.

• The major risks of open source, from the perspective of investors.

• Why private investment isn’t always the answer.

• Detailed analysis of investment in each year between 1997 and 2008.

• Exit strategies: the history of IPOs, M&A and failed businesses.

• The most prolific investors.

• The biggest fundraisers.

The report is expected to form the basis of an annual repeatable service from The 451 Group designed to examine the levels of investment in open source vendors and to identify the changing attitudes among private investors. We will also continue to offer quarterly updates based on preliminary figures on 451 CAOS Theory.

Also look out for details of the a forthcoming webinar, during which we will discuss the findings and research report in more detail.