Top 5 Funds Raised Account For 58% of Total Capital
Percentage of First Time Funds Also Down
Thomson Reuters and the National Venture Capital Association ; 2013 annualized from 09/30/13
In Q3 2013, 56 US venture capital funds raised $4.1B, which represents a slight 2% decline in the number of funds and a 7% fall in the amount of capital raised on a rolling four quarter basis. Consequently, average fund size is also down 5% to $76MM.
The top five funds raised in Q3 2013 continued to account for more than half of the total capital raised, reaching 58% and demonstrating additional industry consolidation. The largest fund raised was Greylock XIV, LP at $1B, while Sequoia Capital US Venture Fund XIV raised $553MM.
First time funds represented 29% of the number of funds raised in Q3 2013, down from 33% in 2012. Additionally, first time funds accounted for only 11% of total capital raised, demonstrating continued consolidation in the venture market. The largest first time fund raised in Q3 2013 was Drive Capital Fund I, LP at $181MM, founded by Mark Kvamme and Chris Olsen who were formerly with Sequoia.
John Taylor, head of research for the NVCA, commented that,
The slightly larger number of firms raising money in Q3 is an indication that there’s some improvement in distributions and prospects. The gradually improving IPO market, along with better quality exits on the M&A side, are signaling to limited partners that venture funds can still yield attractive returns. Smaller fund sizes are not surprising as venture capitalists are looking to invest in less capital intensive sectors and are focused on deploying capital more efficiently.”
The views, opinions, beliefs, conclusions, and other information expressed in this material is not given, verified, or endorsed by Square 1 Financial, Inc. or any of its affiliates. Instead, this material is solely the work of the author, and represents his views, opinions, beliefs, conclusions, and other information he wishes to present, in all cases without any manner of endorsement from or verification by Square 1 Financial, Inc. or any of its affiliates.
This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that the author believes to be reliable, but which has not been independently verified by the author, Square 1 Bank, or any Square 1 affiliate, and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal, or other advice, nor is it to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to this material should be construed as a solicitation, offer, or recommendation to acquire or dispose of any investment, or to engage in any other transaction.
All material presented, unless specifically indicated otherwise, is under copyright to the author or Square 1 Financial, Inc. (or its affiliates), and is for informational purposes only. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied, or distributed to any other party, without the prior express written permission of Square 1 Financial, Inc. or the author. All trademarks, service marks, and logos used in this material are trademarks, service marks, or registered trademarks of Square 1 Financial, Inc. or one of its affiliates.
Square 1 Bank is a member of FDIC and Federal Reserve System. Square 1 Bank and the Square 1 logo are among the trademarks registered to Square 1 Financial, Inc. Square 1 Asset Management, a registered investment advisor, is a non-bank affiliate of Square 1 Bank. Products offered by Square 1 Asset Management are not FDIC insured, are not deposits or other obligations of Square 1 Bank, and may lose value.
Back To Insights