The third-quarter data on venture fundraising is arguably old already, given all that's happened with the economy since the beginning of October, but for what it's worth, the latest data points to a trend of fewer venture funds raising larger amounts of capital.
That's according to a
report from Thomson Reuters and the National Venture Capital Association, which shows that some 55 venture funds raised $8.1 billion in the third quarter of 2008, compared with 83 funds raising $8.6 billion in the third quarter of 2007.
While venture fundraising levels will probably be impacted by the ongoing financial crisis, something else may be at work in the shift from last year. As the industry continues to invest in more capital intensive sectors such as biotechnology and clean technology, many of the companies in these sectors have larger cash requirements.
"Many firms with proven track records will be raising funds in excess of $500 million to invest in longer-term, capital-intensive industries such as life sciences and clean technology," NVCA president Mark Heesen said, adding optimistically that "top tier venture firms will continue to be successful in their fundraising endeavors as their remains a strong pool of innovative companies looking for funding."
One telling sign of how much the world has changed more than the data -- which was gathered through Sept. 30 -- might suggest is the fact that the largest fund raised in the third quarter was Sequoia Capital's U.S. Growth Fund LP. Sequoia, as we all know, recently put together the now notorious PowerPoint presentation outlining its
new frugal ways.
- Andrea Orr
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