U.S. Firms Raise Nearly $7.5 Billion
New York, July 9, 2014 – U.S. venture capital firms raised $7.4 billion in new commitments from 78 funds during the second quarter of 2014, a 24 percent increase compared to the number of funds raised during the first quarter of 2014 and a 19 percent decline by dollar commitments, according to Thomson Reuters and the National Venture Capital Association (NVCA). The number of funds raised during the second quarter of 2014 increased 42 percent compared to the second quarter of last year and marks the strongest quarter for venture capital fundraising, by number of funds, since the fourth quarter of 2007 when 83 funds were raised for venture capital investments.
“Although it moderated slightly from the first quarter, the second quarter fundraising environment for U.S. venture capital firms was very strong compared to recent years,” said Bobby Franklin, President and CEO of NVCA. “Driven by the strong performance of venture-backed companies in the public markets, we believe the solid distributions made to limited partners in recent quarters are resulting in new commitments to venture capital funds that can then be invested in American entrepreneurs. This reinvestment cycle is not only good for the venture firms and their limited partners, but for the next crop of American innovators that want to take their businesses to the next level.”
Commitments were received by 58 follow-on funds and 20 new funds during the second quarter with 92 percent of new capital committed going to follow-on funds. The number of new funds raised during the second quarter marks a slight increase from the number of first-time funds raised during the first quarter of last year and the number of follow-on funds raised during the second quarter of this year registered a 61 percent increase from the first quarter.
The largest new fund reporting commitments during the second quarter of 2014 was from Boston, Massachusetts-based Lightstone Ventures, L.P. which raised $172.0 million for the firm’s inaugural fund. A “new” fund is defined as the first fund at a newly established firm, although the general partners of that firm may have previous experience investing in venture capital.
Second quarter 2014 commitments were led by Palo Alto-based Norwest Venture Partners XII, L.P. which raised $1.2 billion, and Boston-based Bain Capital Venture Fund 2014, L.P. which raised $650.0 million. The five largest venture capital funds raised during the second quarter of 2014 accounted for 43 percent of new commitments, a sharp decline from the first quarter of this year when the top five venture capital funds accounted for 60 percent of overall commitments.
The Thomson Reuters/National Venture Capital Association sample includes U.S.-based venture capital funds. Classifications are based on the headquarter location of the fund, not the location of venture capital firm. The sample excludes fund of funds.
Effective November 1, 2010, Thomson Reuters venture capital fund data has been updated in order to provide more consistent and relevant categories for searching and reporting. As a result of these changes, there may be shifts in historical fundraising statistics as a result of movements of funds between primary market & nation samples and/or between fund stage categories.