Drop by drop, first quarter venture statistics keep coming in, with each delivering more bad news for the venture capital industry and companies in need of funding. But while disappointing news on exits and cleantech results can be written off as water under the bridge, the latest figures on capital raised for future investment does not bode well for a speedy turnaround.
New funding for venture capital funds was down 31% from the first quarter of 2007, with 57 firms raising $6.3 billion,
according to Thomson Financial and the National Venture Capital Association. But the news is not as bad as it could be, as the dollar volume raised was flat compared to 2007.
That means that limited partners retain a certain level of confidence in the asset class, but that established firms are dominating the market.
NVCA president Mark Heesen (pictured) attributed the imbalance to greater interest in capital intensive industries such as life sciences and clean technologies, and predicted the trend to continue. He also said many of the large firms took advantage of the relatively strong fundraising market in the last few years, which will likely mean less fundraising this year.
Most dramatically, the results for the quarter show that only one new fund debuted for every 10 follow-on funds, compared to the roughly 3-to-1 ratio in the first quarter of 2007. -- Clifford Carlsen
See April 15 press release from the National Venture Capital Association
See April 9 post on cleantech funding from VCRatings
See April 1 post on VC exits from VCRatings
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