Venture capital increases with fewer funds

Journal Record, The (Oklahoma City), Apr 14, 2009

Just 40 venture capital funds nationwide raised $4.3 billion in the first quarter of 2009, according to Thomson Reuters and the National Venture Capital Association.

That was the smallest number of venture funds raising money in a single quarter since the third quarter of 2003. The amount of the commitments, however, reflected a slight increase over the previous quarter when $3.5 billion was raised.

"The first-quarter fundraising data suggests two distinct dynamics currently taking place during the economic downturn," said Mark Heesen, president of the NVCA.

"First, the majority of venture firms are not actively fundraising at this time because they have either recently raised a fund and are investing those dollars or are waiting until market conditions improve.

"Second, despite the recession, venture firms with solid track records continue to be able to secure sizable commitments from limited partners as there remains a great deal of promise for future returns from the venture capital asset class."