Archive for February 3rd, 2009

Fundraising by U.S. venture capital firms declined 21.4 percent in 2008, a new report has found, driven down by a sharp decline in the fourth quarter as the global financial crisis throttled the industry that bankrolls much of Silicon Valley’s innovation.

The report, issued Monday by the National Venture Capital Association and Thomson Reuters, found that $27.9 billion was raised in 211 funds in 2008, compared with $35.5 billion in 247 funds in 2007. Fundraising in the fourth quarter totaled $3.37 billion, down more than $5 billion from the previous quarter and nearly $8.3 billion less than the amount raised in the fourth quarter of 2007.

The news was by no means unexpected. VCs and their limited partner investors — pension funds, university endowments and other large financial institutions — have all embraced a more conservative strategy in the uncertain economy. Industry analysts expect the pace of fundraising and deal-making to remain relatively slow through at least the first half of 2009.

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