Statistics released this week from the National Venture Capital Association (NVCA) and Thomson Financial show that VC fund raising in the United States have reached their highest level since 2001. During 2007, 235 venture capital firms raised in excess of $34.7 billion. This was divided across the range of VC investment, early stage funds raised $9.7 bn, balanced stage $10.6 bn, later stage $7.2 bn and expansion funds raised $4.8 bn. The three largest funds created over the year included:

• Technology Crossover Ventures VII, L.P. (later stage; $3.0 billion)
• Bessemer Venture Partners VII, L.P. (balanced stage, $1.3 billion)
• Vector Capital IV, L.P. (expansion stage; $1.2 billion)

(Amounts in $USD)

Source: National Venture Capital Association and Thomson Financial

The venture capital sector has not been so cashed up since 2001. Excess cash at the end of the ‘tech bubble’ resulted in negative IRRs and capital being returned to investors. There is expectation that excess cash from the past few years of fund raising, alongside the predicted economic slowdown may cause a rough time for VC firms in the US.

Source:

• National Venture Capital Association and Thomson Financial
• NVCA Press Release - 2007 Venture Fundraising Reaches Highest Level Since 2001