A total of 235 U.S.-based venture firms raised $34.7 billion for new funds last year, marking the highest level of activity since 2001 when 318 firms raised $38.8 billion, according to a report by Thomson Financial (publisher of PE Week) and the
The number of funds raising money in 2007 was just six (or 2.6%) more than a year earlier. However, the dollar value of those funds rose 9.4%, up from $31.7 billion in 2006. Last year marked the fourth straight year of increases in both the number of funds and the dollars raised.
But there’s no need to worry about a fund-raising bubble, NVCA President Mark Heesen said in the report. Heesen said that the growth in fund-raising reflects the trend of more and more VCs investing in such capital-intensive industries as life sciences and cleantech, “where the dollars required and time spent with the companies are both very high.”
For example, in May,
“As firms deploy capital faster they will have to go back out to the market sooner or raise larger funds,” Heesen said. “Still, we are nowhere near the unsustainable fund-raising levels of the 1999 to 2001 period when the industry raised more than $200 billion.”
The top fund-raiser of the year was