Venture Capital Fundraising Experiences 35 percent Downfall

Venture Capital fundraising down 35 percent

Venture Capital fundraising down 35 percent

A 35 percent drop in the U.S. venture-capital fundraising was experienced in the first quarter of 2012. Industry experts believe that the investors might just be taking a break before they begin undertaking more funds in earnest.

42 separate funds raised a $4.9 billion total pot at the end of the quarter, including ones from Bain Capital Ventures and Canaan Partners. This is 9 percent fewer participating funds than the same quarter a year earlier, which raised $7.6 billion.

National Venture Capital Assn. and Thomson Reuters’ new data shows five funds that have raised 75 percent of the cash, with Menlo Park-based Andreessen Horowitz laying claim to $1.5 billion. But the attitude isn’t too gloomy. The $4.9 billion which was raised is still the third highest amount raised ever since the end of the recession.

NVCA’s President, Mark Heesen said in a statement, “While the first quarter fundraising numbers represent a slower start than last year, venture firms appear to be more optimistic about the fundraising environment in 2012, especially those who have benefitted from the improving exit environment of late, which has also been encouraging to our investors”. Mark Heesen believes that more venture-backed companies like Facebook are going public and more funds are expected to start raising money this year. This means, many venture firms are either now officially in the market to raise a fund or will enter in 2012. These firms will face a do or die situation, and the collective outcome of their fundraising efforts will lay the groundwork for the amount of venture capital available for investment in entrepreneurial companies the next decade.

Last week, NVCA found out that California is a runaway leader in landing venture capital investment. Venture firms appear to be more optimistic about the fundraising environment. Even as venture firms downshift their investment pace from a year earlier, they’re benefiting from the best stretch of Internet initial public offerings in more than a decade.

Companies like LinkedIn Corp., Groupon Inc., Zynga Inc. went public at multibillion dollar valuations last year, followed by Yelp Inc. this year, which is worth $1.4 billion. Facebook Inc. may sell shares next month at a valuation of as much as $100 billion.

Menlo Park, California’s Andreessen Horowitz also raised the biggest single fund in the quarter, bringing in $1.5 billion from its limited partners. Canaan Partners and Bain Capital Ventures each raised $600 million in the period, while the biggest new firm to raise capital was Fraser McCombs Ventures, attracting $16.9 million.

Christy Gren
Christy Gren is an Industry Specialist Reporter at Industry Leaders Magazine she enjoys writing about Unicorns, Silicon Valley, Startups, Business Leaders and Innovators. Her articles provide an insight about the Power Players in the field of Technology, Auto, Manufacturing, and F&B.

Recent Posts

GM Offers Fans a Sneak-Peak of the New Cadillac Escalade V-Series SUV

GM Offers Fans a Sneak-Peak of the New Cadillac Escalade V-Series SUV

The running lights, too, have a classier, sporty design. Cadillac aptly captioned the video “Power has a sound – and it’s a roar.”
10 hours ago
We’re in the end of a ‘superbubble,’ says Jeremy Grantham

We’re in the end of a ‘superbubble,’ says Jeremy Grantham

The U.S. is fast approaching the end of a “superbubble” spanning across real estate, stocks, bonds, commodities, as per iconic investment guru, Jeremy Grantham.
12 hours ago
Cryptocurrency Scammers Promise Fake Amazon Tokens to Rob Buyers

Cryptocurrency Scammers Promise Fake Amazon Tokens to Rob Buyers

A report by blockchain data platform Chainalysis reveals that nearly $14 billion in cryptocurrency were sent to illicit addresses in 2021.
3 days ago
Neuralink Looks for a Clinical Trial Director to Direct Its Next Step

Neuralink Looks for a Clinical Trial Director to Direct Its Next Step

Musk had previously revealed that he hopes the company will be able to address a wide range of neurological problems – ranging from addiction to paralysis.
3 days ago
Winter Olympics 2022: The Silence of the Brands

Winter Olympics 2022: The Silence of the Brands

Brands see the Olympics as an opportunity to connect with their consumers and boost sales with limited edition products.
4 days ago
Best Fintech Stocks to Buy in 2022

Best Fintech Stocks to Buy in 2022

The biggest names on Wall Street are buying some of these best fintech stocks of the year. Now maybe a great chance to invest money in the right business.
5 days ago