Archive for September 26th, 2012

By Russ Garland

Pickings are slim for most firms on the fundraising trail, but the path is crowded.

Dow Jones VentureSource took a look at data compiled for the October issue of Private Equity Analyst, a sister publication to VentureWire, and found 330 open U.S. venture funds looking to raise about $26 billion.

Bloomberg News

It’s safe to say that some of those funds are not being actively marketed as the dismal fundraising climate has caused firms to back off, hoping that better days will come. Plenty were looking for Facebook’s IPO to signal a new dawn–but we all know how that turned out.

Limited partners still appear skeptical of venture returns and willing to commit only to well-established firms who seem to be consistent performers. Those firms can pretty much raise what they want. The $2.6 billion fund recently closed by New Enterprise Associates is Exhibit A.

But NEA found lots of interest in venture as an asset class, perhaps a sign that the pendulum is swinging back. Despite the Facebook debacle, a healthy lineup of venture-backed companies is waiting to go public and VCs remain optimistic about investment opportunities. Also, pension funds, a traditional source of venture capital, are under pressure to generate better results.

As of July, U.S. venture fundraising stood at $13 billion, up 31% from the first six months of last year, but four funds raised just over $6 billion of that. Notable, however, was that 82 funds had held closings, up from 73 a year earlier.

Read Full Post »