The once quick growing FirstHand Funds is now shrinking along with the Nasdaq. On Friday the firm made its second formal round of layoffs, downsizing its staff to 33, reports TheStreet.com. Those cuts included three analysts.

The firm made its first cut on September 24 when it let go of 15 of 65 workers employed at the time. Both cuts were made in response market conditions, explained Steven Witt, managing director.

The challenges at the firm are not surprising since it has ridden the Nasdaq's coattails in both good times and bad. The firm last hits its nadir in the Fall of 1997 during the Long-term Capital Management inspired meltdown. FirstHand saw its assets dwindle to roughly $250 million from a $1 billion. The firm's asset base more than bounced back with the market, growing to nearly $6 billion by the time of the Nasdaq peak in April of 2000.

The fund firm is a prototypical Silicon Valley success story. Kevin Landis and Ken Kam founded the firm as Interactive Funds in the early nineties after they successfully managed money for friends. The firm used the last leg of the bull market and its growing asset base to professionalize. Kam left the firm in 1998.

To lead sales and marketing, FirstHand added Phil Mosakowski to head marketing and most recently David Dittmore to head sales. It also quickly expanded its ranks of investment analysts.

Although it had added a number of funds to its burgeoning family, all of those offerings were technology-related sector funds and have failed to create more stable asset flows for the firm.  

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