VENTURE CAPITAL FUNDS RAISED $20.6 BILLION DURING 2012
VC Industry Continues to Bifurcate Into Large and Small Funds
New York, January 7, 2013 - U.S. venture capital firms raised $20.6 billion from
182 funds during full year 2012, a 10 percent increase by dollar commitments
compared to full year 2011, and a three percent decline by number of funds,
according to Thomson Reuters and the National Venture Capital Association
(NVCA). Â During the fourth quarter of 2012, 42 U.S. venture capital funds raised
$3.3 billion. Â This level marks a 35 percent decrease by dollar commitments and
a 25 percent decrease by number of funds compared to the third quarter of 2012,
which saw 56 funds raise $5.1 billion during the period. Â The top five venture
capital funds accounted for 55 percent of total fundraising this quarter, on par
with the third quarter of 2012.
+--------------+-----------------+----------------------+
| Year/Quarter | Number of Funds | Venture Capital ($M) |
+--------------+-----------------+----------------------+
| 2008 | 215 | 25,577.2 |
+--------------+-----------------+----------------------+
| 2009 | 162 | 16,187.9 |
+--------------+-----------------+----------------------+
| 2010 | 176 | 13,669.8 |
+--------------+-----------------+----------------------+
| 2011 | 187 | 18,745.7 |
+--------------+-----------------+----------------------+
| 2012 | 182 | 20,569.9 |
+--------------+-----------------+----------------------+
| 4Q'10 | 50 | 3,712.2 |
+--------------+-----------------+----------------------+
| 1Q'11 | 49 | 7,699.5 |
+--------------+-----------------+----------------------+
| 2Q'11 | 48 | 2,713.3 |
+--------------+-----------------+----------------------+
| 3Q'11 | 66 | 2,116.0 |
+--------------+-----------------+----------------------+
| 4Q'11 | 54 | 6,217.0 |
+--------------+-----------------+----------------------+
| 1Q'12 | 54 | 5,987.4 |
+--------------+-----------------+----------------------+
| 2Q'12 | 46 | 6,203.7 |
+--------------+-----------------+----------------------+
| 3Q'12 | 56 | 5,088.0 |
+--------------+-----------------+----------------------+
| 4Q'12 42 3,290.8 |
+-------------------------------------------------------+
Source: Thomson Reuters and National Venture Capital Association
"The venture capital fundraising environment has settled into a 'new normal'
which is characterized by a barbell structure of larger funds which are stage
and industry agnostic on one end, and smaller, early stage, industry or region
specific funds on the other," said Mark Heesen, president of NVCA. Â "It is on
these two ends of the spectrum where capital is concentrating and successful
firms are raising follow-on funds. Simultaneously, new funds continue to enter
the asset class, almost exclusively at the smaller end of the spectrum. This
structure, coupled with increasingly discerning limited partners, has kept the
overall size of the venture industry below $25 billion each year since 2009, a
size that many believe to be optimal for successful investing and maximizing
returns."
There were 127 follow-on funds and 55 new funds raised during the full year
2012, a ratio of 2.3-to-1 of follow-on to new funds. During the fourth quarter
of 2012, 25 follow-on funds and 17 new funds were raised, a ration of 1.5-to-1.
 The largest new fund reporting commitments during the fourth quarter of 2012
was from Raleigh, North Carolina-based Novaquest Pharma Opportunities Fund III,
L.P. which raised $244.1 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.
+-------+------------+------------------+-------+
| Â | No. of New | No. of Follow-on | Total |
+-------+------------+------------------+-------+
| 2008 | 49 | 166 | 215 |
+-------+------------+------------------+-------+
| 2009 | 42 | 120 | 162 |
+-------+------------+------------------+-------+
| 2010 | 61 | 115 | 176 |
+-------+------------+------------------+-------+
| 2011 | 59 | 128 | 187 |
+-------+------------+------------------+-------+
| 2012 | 55 | 127 | 182 |
+-------+------------+------------------+-------+
| 4Q'10 | 21 | 29 | 50 |
+-------+------------+------------------+-------+
| 1Q'11 | 15 | 34 | 49 |
+-------+------------+------------------+-------+
| 2Q'11 | 17 | 31 | 48 |
+-------+------------+------------------+-------+
| 3Q'11 | 21 | 45 | 66 |
+-------+------------+------------------+-------+
| 4Q'11 | 15 | 39 | 54 |
+-------+------------+------------------+-------+
| 1Q'12 | 15 | 39 | 54 |
+-------+------------+------------------+-------+
| 2Q'12 | 14 | 32 | 46 |
+-------+------------+------------------+-------+
| 3Q'12 | 17 | 39 | 56 |
+-------+------------+------------------+-------+
| 4Q'12 17 | 25 | 42 |
+--------------------+------------------+-------+
Source: Thomson Reuters and National Venture Capital Association
Fourth quarter 2012 venture capital fundraising was led by Menlo Park,
California-based Sequoia Capital Global Growth Fund, L.P., which raised $700
million and Portola Valley, California-based Venture Lending & Leasing VII LLC,
which raised $373.1 million.
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. Â 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.
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About National Venture Capital Association
Venture capitalists are committed to funding America's most innovative
entrepreneurs, working closely with them to transform breakthrough ideas into
emerging growth companies that drive U.S. job creation and economic growth.
According to a 2011 Global Insight study, venture-backed companies accounted for
12 million jobs and $3.1 trillion in revenue in the United States in 2010. As
the voice of the U.S. venture capital community, the National Venture Capital
Association (NVCA) empowers its members and the entrepreneurs they fund by
advocating for policies that encourage innovation and reward long-term
investment. As the venture community's preeminent trade association, NVCA serves
as the definitive resource for venture capital data and unites its nearly 400
members through a full range of professional services. For more information
about the NVCA, please visit www.nvca.org.
CONTACTS
Emily Mendell
NVCA
1.610.565.3904
emendell@nvca.org
Lauren Herman
Thomson Reuters
1.646.223.5985
lauren.herman@thomsonreuters.com
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