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Venture Fundraising In First Quarter Strongest Since 2008

As peHUB reported last week, venture fundraising was strong in the first quarter. Thirty-six US venture capital funds raised more than $7 billion, according to Thomson Reuters, publisher of this blog, and the National Venture Capital Association (NVCA).  This is a 76  percent increase compared to the first quarter of 2010 and the strongest quarter for venture fundraising since the third quarter of 2008. It also is the best annual start for fundraising in the US since 2001.

PRESS RELEASE

VENTURE CAPITAL INDUSTRY RAISES $7.1 BILLION IN Q1 2011

Strongest Annual Start for Fundraising Dollars Since 2001

New York, April 11, 2011 – Thirty-six US venture capital funds raised more than $7 billion

in the first quarter of 2011, according to Thomson  Reuters and the National Venture

Capital Association (NVCA).  This level marks a 76  percent increase, by dollar

commitments, compared to the first quarter of 2011, which saw 44 funds raise $4.0 billion

during the period.  The first quarter marks the strongest quarter for US venture capital

fundraising since the third quarter of 2008 and the best annual start for fundraising in the

US since 2001.

“This year will be a defining one as many venture capital firms will be fundraising, some of

whom have been waiting for the investor climate to improve before going out,” said Mark

Heesen, president of the NVCA.  “While it is encouraging to see the increase in dollars this

quarter, much of that was driven by several larger, established funds.  We would like to see

a similar increase in the number of firms successfully closing funds as the year

progresses.”

There were 25 follow-on funds and 11 new funds raised in the first quarter of 2011, a ratio

of 2.3-to-1 of follow-on to new funds. The largest new fund reporting commitments during

the first quarter of 2011 was Tempe, Arizona-based  True North Venture Partners, L.P.,

which raised $192 million in its inaugural fund.  A “new” fund is defined as the first fund at a

newly established firm, although the general partner of that firm may have previous

experience investing in venture capital.

VC Funds: New vs. Follow-On

The first quarter of 2011 saw three multi-billion dollar fundraising commitments, led by

Bessemer Venture Partners VIII which raised $1.6 billion during the quarter.  Sequoia

Capital 2010, L.P. raised $1.3 billion and J.P. Morgan Digital Growth Fund, L.P. raised $1.2

billion.   The $1.6 billion commitment for Bessemer Venture Partners VIII marks the largest

US venture capital fund commitment since New Enterprise Associates 13, L.P. raised $2.2

billion during the second quarter of 2009.  Page 3 of 3

April 11, 2011

Methodology

The Thomson Reuters/National Venture Capital Association sample includes U.S.-based

venture capital funds.  Classifications are based on the headquarter location of the fund,

not the location of venture capital firm.   The sample excludes fund of funds.

Effective November 1, 2010, Thomson Reuters venture capital fund data has been

updated in order to provide more consistent and relevant categories for searching and

reporting.  As a result of these changes, there may be shifts in historical fundraising

statistics as a result of movements of funds between primary market & nation samples

and/or between fund stage categories.

About Thomson Reuters

Thomson Reuters is the world’s leading source of intelligent information for businesses and

professionals.  We combine industry expertise with innovative technology to deliver critical

information to leading decision makers in the financial, legal, tax and accounting,

healthcare and science and media markets, powered by the world’s most trusted news

organization.  With headquarters in New York and major operations in London and Eagan,

Minnesota, Thomson Reuters employs 55,000 people and operates in over 100 countries.

For more information, go to www.thomsonreuters.com.

About National Venture Capital Association

Venture capitalists are committed to funding America’s most innovative entrepreneurs,

working closely with them to transform breakthrough ideas into emerging growth

companies that drive U.S. job creation and economic growth. According to a 2009 Global

Insight study, venture-backed companies accounted for 12.1 million jobs and $2.9 trillion in

revenue in the United States in 2008. As the voice of the U.S. venture capital community,

the National Venture Capital Association (NVCA) empowers its members and the

entrepreneurs they fund by advocating for policies that encourage innovation and reward

long-term investment. As the venture community’s preeminent trade association, NVCA

serves as the definitive resource for venture capital data and unites its 400 plus members

through a full range of professional services.