U.S. venture funds raise $4.1 billion, down 18 percent

Reuters

SAN FRANCISCO, Oct 7 (Reuters) - U.S. venture capital firmsraised $4.1 billion last quarter, down almost 18 percent fromthe same period in 2012, according to data from the NationalVenture Capital Association and Thomson Reuters released onMonday.

The dollar amount was down from the almost $5 billion raisedin the third quarter of 2012, when venture-backed investments intechnology startups soared.

"The gradually improving IPO market, along with betterquality exits on the M&A side, are signaling to limited partnersthat venture funds can still yield attractive returns," saidJohn Taylor, the association's head of research.

"Smaller fund sizes are not surprising as venturecapitalists are looking to invest in less capital-intensivesectors and are focused on deploying capital more efficiently."

The bulk of the cash was raised by a handful of venturefirms amassing outsized funds. Greylock raised $1 billion,becoming the first U.S. venture capital fund to cross thatthreshold this year for a single fund. Sequoia Capital raised$552.9 million for its U.S. Venture Fund XIV, plus $391.4million for Sequoia Capital China and $227 million for SequoiaCapital Israel V.

Venture-capital fundraising for the first nine months of theyear totaled $11.6 billion, well off the $16.2 billion amassedat the same point in 2012.

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