Wilshire Park sees that Venture Capital Fundraising Activity Remains in Q3 2010

While the inclination is to assume that a contracting industry is problematic, most venture capitalists and their limited partners believe that this environment will drive future returns upward without harming innovation and job creation. End Quote

(1888PressRelease) November 15, 2010 - Forty-five US venture capital funds raised nearly $3 billion in the third quarter of 2010. This level marks a 40% increase, by dollar commitments, compared to the second quarter of 2010, which saw 51 funds raise $2.1 billion during the period. Most of this increase was attributable to a single $750 million fund closing in the quarter.

With funds sizes getting smaller and fewer firms raising money, we are experiencing a period of time in which venture capital investment is consistently outpacing fundraising, creating an industry that will be slightly smaller in the next decade.

There were 31 follow-on funds and 14 new funds raised in the third quarter of 2010, a ratio of 2.2-to-1 of follow-on to new funds. The largest new fund reporting commitments during the third quarter of 2010 was New York-based Raine Partners I, L.P., which raised $303.4 million in its inaugural fund. A "new" fund is defined as the first fund at a newly established firm, although the general partner of that firm may have previous experience investing in venture capital.

The largest funds raised during the third quarter of 2010 was Menlo Park, California-based Institutional Venture Partners XIII, L.P. which raised $750 million followed Boston, Massachusetts-based Third Rock Ventures II, L.P., which raised $426 million.

Wilshire Park sees the above as a positive result for the whole of 2010 in its economic recovery, and expects the numbers to improve even more throughout 2011.

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