Amount of Capital Raised and Average Fund Size Down Significantly
Top 5 Funds Still Account for Greater than 50% of Dollars Raised
Percentage of First Time Funds Remains Down
Thomson Reuters and the National Venture Capital Association ; 2013 annualized from 06/30/13
In Q2 2013, 44 US venture capital funds raised $2.9B, which was a 4% decrease in number of funds and an 18% fall in capital raised on a rolling four quarter basis. Consequently, average fund size also fell 15% to just $82MM.
Continuing the trend of industry consolidation, the top five funds raised in Q2 2013 accounted for 55% of the total capital raised. The top three funds were Matrix Partners X, LP at $450MM, Scale Venture Partners IV, LP at $300MM, and Foundation Capital VII, LP at $282MM. Furthering the industry consolidation, first time funds as a percentage of total capital raised averaged only 25% year to date, as compared to averaging 30% in 2012.
Mark Heesen, president of the NVCA, noted,
“The second quarter reflects not just the consolidation of the venture capital industry, but also the overall contraction of fund size. Many long-standing, pedigree venture firms are heeding the guidance from limited partners and raising smaller, more agile funds. Consequently, dollar values of capital under management are declining from historical levels. Counterbalancing this trend is the recent uptick in the venture backed IPO market which, if sustainable, may very well draw more dollars into the asset class in the coming year.”
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