Venture capital firms raised $11 billion in the fourth quarter, bringing the total to $34.7 billion for 2007, the strongest year since the $38.8 billion raised in 2001, according to a survey released Monday.

Thomson Financial and the National Venture Capital Association reported that 235 venture funds raised money in 2007, a 2.6 percent increase from 2006. The amount of money raised climbed 9.4 percent year over year.

In a statement, Mark Heesen, president of the NVCA, said that clean technology and life science businesses, in particular, require substantial capital investment. Heesen said the industry is "nowhere near the unsustainable fundraising levels" of 1999 to 2001, when more than $200 billion gushed into VC funds.

But one VC warned that the limited partners' free-spending ways could come back to haunt the venture industry.

"The market is getting unbalanced again because there's too much money in the system and not sufficient liquidity options," Todd Dagres of Spark Capital said in an e-mail. "This will cause a surplus of companies competing with each other and will bring down returns…How many social network, mobile widget, online video and community search sites do consumers really need?"

In 2007, VCs raised about three times as many follow-on funds as new funds. That compares to a four-to-one ratio in 2006.

Venture fundraising has steadily gained momentum since the bust year of 2002, when 179 funds raised $3.9 billion. In 2003, limited partners doubled their venture investing to $10.6 billion and 2004 saw another sharp increase to $19.1 billion.

The $11 billion raised in the fourth quarter was the biggest haul since $14.2 billion flowed to venture firms in the second quarter of 2006.