Venture capital fundraising dipped 35 percent in the first quarter from a year before, raising $4.9 billion, according to Thompson Reuters and the National Venture Capital Association.
Forty-two firms raised money, a nine percent decrease from the first quarter of 2011 when 46 funds raised $7.6 billion. The leading five funding made up 75 percent of the quarter’s total fundraising.
That’s the lowest level since the third quarter of 2009, when 36 funds raised investments. Yet the agencies assured startups that these numbers were nothing to panic about as venture firms remain optimistic as the capacity for exits improves.
“While the first quarter fundraising numbers represent a slower start than last year, venture firms appear to be more optimistic about the fundraising environment in 2012, especially those who have benefited from the improving exit environment of late which has also been encouraging to our investors,” said Mark Heesen, president of the NVCA. “Many venture firms are either now officially in the market to raise a fund or will enter in 2012. For these firms, it will be ‘do or die’ – and the collective outcome of their fundraising efforts will lay the groundwork for the amount of venture capital available for investment in entrepreneurial companies the next decade.”
Thirty-one follow-on funds and 11 new funds raised money in the first quarter, a ratio of 2.8 to 1 of follow-on to new funds.
Andreessen Horowitz Fund III, L.P., based in Menlo Park, Calif., raised the largest fund at $1.5 billion, the most in the firm’s history to date. Meanwhile, Canaan Partners and Bain Capital Ventures each raised $600 million during the first quarter of 2012.
Fraser McCombs Ventures was the largest new fund, raising $16.9 million.