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U.S. venture capital firms raised $4.9 billion from 48 funds during the fourth quarter of 2013, an increase of 12 percent compared to the level of dollar commitments raised during the third quarter of 2013, but a 21 decrease by number of funds, according to Thomson Reuters and the National Venture Capital Association (NVCA). The dollar commitments raised during the fourth quarter of 2013 is a 53 percent increase from the levels raised during the comparable period in 2012 and marks the strongest quarter for venture capital fundraising, by dollars, since the third quarter of 2012. Venture capital firms raised $16.7 billion from 185 funds during full year 2013, a 15 percent decline by dollar commitments compared to full year 2012 and the slowest annual period for fundraising since 2010.
“Venture capital fundraising in 2013 ended much in the way it began - with continued concentration within the larger funds and a sense of optimism for the coming year,” said Bobby Franklin, president and CEO, National Venture Capital Association. “The difference today is that there is hard evidence of an improving exit market, which will actually help realize some of this positive momentum as limited partners again include venture as a vital component of their portfolio. If the IPO market continues to strengthen and receive quality offerings, we can expect more VCs involved in those exits to raise money in 2014, which will bode well for a new crop of startups looking to raise capital,” Franklin added.
There were 34 follow-on funds and 14 new funds raised during the fourth quarter of 2013, a 2.4 to-1 ratio of follow-on to new funds. The number of new funds raised during the fourth quarter marks a 22 percent decrease from the number of first-time funds raised during the third quarter of this year. During full year 2013, 53 new venture capital funds raised $1.5 billion, an 11 percent decline by dollar commitments and 25 percent decline by number of new funds.
The largest new fund reporting commitments during the fourth quarter of 2013 was from Minnesota-based TTCP Fund I, L.P. which raised $132.0 million for the firm’s inaugural fund. A “new” fund is defined as the first fund at a newly established firm, although the general partners of that firm may have previous experience investing in venture capital.
Fourth quarter 2013 venture capital fundraising was lead by New York-based OrbiMed Private Investments V, L.P. which raised $699.5 million, and Massachusetts-based General Catalyst Group VII, L.P. which raised $675.0 million. The largest venture capital fund raised during full year 2013 was from Greylock XIV, L.P., which raised $1.0 billion during the year.
Methodology
The Thomson Reuters/National Venture Capital Association sample includes U.S.-based venture capital funds. Classifications are based on the headquarter location of the fund, not the location of venture capital firm. The sample excludes fund of funds.
Effective November 1, 2010, Thomson Reuters venture capital fund data has been updated in order to provide more consistent and relevant categories for searching and reporting. As a result of these changes, there may be shifts in historical fundraising statistics as a result of movements of funds between primary market & nation samples and/or between fund stage categories.
