Q4 Fund-Raising Blues

Venture capital firms raised less fund capital in Q4 2006 than in any other quarter since Q1 2004, according to new data released today by Thomson Financial and the National Venture Capital Association. The results are particularly surprising because fund-raising usually spikes in fourth quarters, as limited partners work to finish off their annual allocations. For example, VC firms raised $5.6 billion in Q3 2005 but $9.2 billion the following quarter. Ditto for 2004, with $5.5 billion raised in Q3 and nearly $7 billion raised the subsequent quarter.

Just 37 U.S.-based firms raised $2.83 billion during Q4 2006 (excluding funds-of-funds). The biggest winner was Menlo Park, Calif.-based Benchmark Capital with $550 million for its third European fund.

Overall, VCs raised more fund capital in 2006 than in any other year since 2001. The press release with data charts can be downloaded here: FundRaising_Release.doc