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Number of Venture Capital Funds Hits 16-Year Low
Though they're smaller in number, the amount of funds they raised increased by 28 percent to $2.7 billion.
Posted 7/ 14 11 at 6:30 PM | News, Money, Financial Services
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Despite the recent spate of startups scoring millions and even hundreds of millions in venture capital, the number of U.S. funds raising venture capital totaled only 37 in the second quarter of 2011, a 23 percent decrease from the second quarter of 2010, according to data from Thomson Reuters and the National Venture Capital Association (NVCA). This marks the lowest number of VC funds since the first half of 1995.They may be smaller in number, but the amounts these VC funds are raising continue to climb. The 37 funds raised $2.7 billion in the second quarter of 2011, a 28 percent increase from the same period in 2010.
About half that total was raised by Palo Alto-Calif.-based Accel Partners, which gained a reputation as an industry leader for its 2005 investment in Facebook and 2009 investment in Groupon.
"The fact that the number of firms raising money successfully remains at such low levels confirms an ongoing contraction of the venture capital industry, which will serve well those funds that can obtain commitments -- but that group is becoming more and more narrow," Mark Heesen, president of the NVCA, said in a statement. "While a smaller venture industry will intuitively produce higher returns, it is critical that the mix of funds remain geographically diverse and cover a broad base of industries if we expect to contribute to economic growth and innovation at the levels we have historically. For that reason, we would like to see more funds raise money in the second half of the year."
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Comments (Page 1 of 1)
As if this is some sort of deep mystery. Anyone paying even the slightest bit of attention sees a Federal Government hell bent on wrecking not only our economy but our entire system and guess what? Like we said in the country, it does roll down hill.
Obama, Democrats, Unions all want to TAX THE RICH ! Does this have anything to do with decline in VC activity > ?
If I were Rich I think I would want to go where the Government did not
Hate My Work and disparage my DREAMS !
Venture capitalization has taken the same path downward as college degrees. You pay more but the product is worth less. Until that trend reverses there wil be limited interest in adding money to products that can't prove thier value.
The answer is the "uncertainty" which the whitehouse and Congress presents. This is what you get when you want to tax the rich greater than you tax the Croneys who are also rich. Take GE for example. Fourteen billion in profit and zero in taxes. Immelt is Obama;s buddy. That is croneyism at its worst. Or take Monsanto and Congress. That's croneyism. While the rest of us wonder just what the hell the President is going to do next The big Corneys are cashing in. GM, Chrysler, UAW, AFL-CIO, SEIU et cetera. You get the picture. No investor in his right mind is going to invest in anything in America as long as we fact the threat of outrageous taxes on profits and ordinary income. Capital Gains is the very best income right now with the lowest tax. If you take that away then there will be no dollars from private investors. They will go off shore.