The FINANCIAL — Thirty-eight U.S. venture capital funds raised $5.9 billion in the second quarter of 2012, according to Thomson Reuters and the National Venture Capital Association (NVCA).
This level marks a 12 percent increase by dollar commitments and a 22 percent decline by number of funds compared to the first quarter of 2012, which saw 49 funds raise $5.3 billion during the period. The top five funds accounted for nearly 80 percent of total fundraising this quarter as the number of funds raising money during the quarter fell to its lowest levels since the third quarter of 2009, when 38 venture capital funds also saw new capital commitments. Venture Capital fundraising for the first half of 2012 totaled $11.2 billion, a 10 percent increase by dollar commitments compared to the first half of 2011 ($10.2 billion) and an 8 percent decline by number of funds.
“As the number of venture capital firms continues to contract, we are beginning to see a clear bar bell forming with several large funds weighing in heavily on one side of the spectrum and a multitude of smaller funds on the other side,” said Mark Heesen, president of the NVCA. “This polarity translates into a heavier concentration of dollars in the hands of fewer large firms, narrowing the overall field of venture funds from which to choose for entrepreneurs and limited partners alike. As the venture industry bifurcates further, successful LPs and portfolio CEOs are going to have to search for quality firms on both sides of the barbell.”
There were 28 follow-on funds and 10 new funds raised in the second quarter of 2012, a ratio of 2.8-to-1 of follow-on to new funds. The largest new fund reporting commitments during the second quarter of 2012 was from San Francisco, California-based Mithril, L.P. which raised $402.0 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. The 10 new funds raised during the second quarter of 2012 mark the slowest three-month period for capital raising from new funds since the first quarter of 2009, when 10 new funds were raised.
As Thomson Reuters reported, second quarter 2012 venture capital fundraising was lead by Menlo Park, California-based New Enterprise Associated 14, L.P. which raised nearly $2.1 billion Institutional Venture Partners XIV, L.P. which raised $1.0 billion during the quarter.
Discussion about this post