Gaining venture capital funding continues to be challenging, analysts said at the 24th annual Minnesota Venture & Finance Conference on Thursday.

VC firms are still having a tough time exiting their investments, causing their funding to be tied up in companies that are already in their portfolios, analysts said at the conference, held at the Minneapolis Convention Center on Thursday. The main exit strategy for VC firms is mergers and acquisitions, with the IPO market still weak, they said.

There were just 12 IPOs nationwide last year, compared to 86 IPOs in 2007, according to data from Thomson Reuters and the National Venture Capital Association. So far, there have been 40 IPOs this year.

"We're a far way from where they need to be," said John Taylor, vice president of research for the National Venture Capital Association.

John Barr, CEO of AGA Medical, one of three Minnesota companies to have an IPO since 2009, said companies today would probably need to have $15 million to $100 million in revenue to go public, as well as be profitable or be on a clear path to profitability. AGA Medical raised $200 million in its IPO in October 2009.

"The hurdle is relatively high compared to the past," Barr said.