The first quarter of 2009 wasn’t just a dry one for venture-backed exits, very little money went into the coffers of VC funds as well. According to data released today by the National Venture Capital Association, only 40 funds raised new money during the quarter, down from 71 the year before (1Q08) and 47 the previous quarter (4Q08). Out of the 40 funds, only three were brand new.
In dollar terms, the total raised was $4.3 billion, down 39 percent from the year before (1Q08), but up 23 percent from the fourth quarter when it dipped to a low of $3.5 billion. At least the sequential comparisons are up. The largest capital raising was for August Capital’s $650 million fund. Bain Capital raised a $475 million fund, and Charles River Ventures raised a new $320 million fund.
Here are the stats (Source Thomson Reuters/ NCVA):
Number of U.S. Venture Funds Raising New Capital
1Q09: 40
4Q08: 47
3Q08: 62
2Q08: 78
1Q08: 71
4Q07: 85
3Q07: 77
2Q07: 85
1Q07: 81
Dollar Amount of New Funds Raised By U.S. Venture Capital Firms (in billions)
1Q09: $4.3B
4Q08: $3.5B
3Q08: $8.4B
2Q08: $9.3B
1Q08: $7.2B
1Q09: $4.3B
4Q07: $11.9B
3Q07: $8.6B
2Q07: $8.7B
1Q07: $6.5B
(Photo by MrVJTod)
I call it pruning and it was bound to happen.
My son came home and said Ycombinator asked him to bring back Lemons, sugar, water and a business plan.
In exchange, Ycombinator will “mentor” the kids while they mix the ingrediants, drink half of it, and charge them 25 cents.
Great deal, huh?
Here is a scientific project done on the effect of the crisis on venture capital: http://papers.s...ract_id=1373723 – Rather interesting!!
So now china is the new USA?
there were also significantly less number of vc’s trying to raise funds knowing that lp’s are in a crunch.
so it’s a bit of a chicken & egg issue. once the outlook improves, i think more vc’s will hit the pavement…
Best Meta Search Engine of the World…
Check http://search.m...p;sa=Search#925 and let konw the feedback
Try http://search.m...;sa=Search#1055
Great!
More money to fund a bunch of unprofitable business models and companies solely dependent on advertising.
Hopefully Google, Cisco or Microsoft will buy them all and we’ll be RICH!
I don’t think necessarily most funds want to go out and raise from already stressed LPs at this point in time. Its not the best time for relationship building and to be eeking out already tapped resources (esp. from large institutions).
I believe most investors (even from a VC fund side) are waiting to weather the storm, focus on their portfolio companies and help them grow in a turbulent time. These numbers will surely go up for those funds who are able to do this in the latter half of 2009.
Better get your spouting out today cause it’s end of line VC
In parallel to the decline of funds raised, DLA Piper advised the Silicon Valley NewTech meetup on April 7th that the deal flow (number of entrepreneurs presenting working treatments for their business plans to attorneys in their office) has zoomed to record highs. It’s the classical market far from equilibrium.
This is my comment.
IMHO, 2000-2010 is a decade of innovation desert
There is no innovation with big impact coming out of this decade. Only “innovation” we can talk about is Facebook, Twitter, Youtube, etc. These are laughable comparing to
– Internet & Cell Phone in (1990-2000),
– PC (1980-1990)
– Integrated Circuit (1970-1980),
– Semiconductor( 1960-1970) .
This lack of fundamental tech breakthrough partially explains
– why US economy is in trouble,
– why Silicon valley is in deep trouble,
– Why it has been a very difficult decade for startups
(We could not name a few successful startups for the decade.).
I wish that 2010-2020 will be better.
(Note: Google and VmWare went IPO this decade, but they were innovation of (1990-2000)) .
From:
Silicon Valley China Entrepreneurship Forum(SVCEF)
http://www.svcef.org
well said
So true…lack of “real” innovation is a big problem.
There is potential though. Cleantech, nanotech, biotech, quantum computing all might offer some compelling opportunities. Most likely however, innovation will start originating overseas. Although the silicon valley culture will be hard to replicate elsewhere, the wheels are already in motion
There is really no breakthrough for VCs to invest. All the web 2.0 stuff (other than FB, twitter) have no business model, and are “me-too” duplicates and “not IPOable”. Even FB with high burn rates could be running out of cash and not able to raise new cash. Over past several years, VCs have invested in a lot of startups that have no clear exit strategy. IPO exit has been minimal. There are no enough “GOOGs” for M&A activities. So these VC-funded starups are stucked in a zoombie state.
F…book has a business-model? That’s news.
From the Sleepy Sonsini Kid at NEA to Ski Sweater McAdoo at Sequoia, to Hairpiece Paul Graham.
You don’t need these lazy Susans.
Come up with an idea that generates revenue and is of value.
Do it part-time until you generate enough revenue to jump full time.
Hire your own staff. Grow as your earnings increase.
Go to industry meetings. Phone calls. Meet people. Like the pioneers did.
You don’t need these bloated, trustfund Timmies to get your product in the market.
You’re welcome, Pinheads.
At the juncture where Venture Capital Industry Leaders are expressing the optimizam on the revival of VC actitivites. I want to know from the experts about the future situation of VC industry as I am trying to go for advance course in VC keeping in the mind to shift my carreer line from current line of Business Adminstration to VC consultancy line.
r kumar v