Report: Number Of VC Funds Raising Money At 16-Year Low (There's A But)

According to Thomson Reuters and the National Venture Capital Association, United States-based venture capital funds have raised $2.7 billion in the second quarter of 2011, a 28 percent increase by dollar commitments compared to Q2 2010.

However, the number of VC firms raising money has declined significantly (from 48 tot 37 funds, or a 23 percent drop, compared to the second quarter of 2010).

Also see: U.S. Venture Fundraising Up 20 Percent In First Half Of 2011 (Dow Jones)

According to Thomson Reuters and the NVCA, 76 U.S. funds raised $10.4 billion in the first half of the year, a 70% increase by dollars compared to the first half of 2010.

Its analysis shows, however, also shows a 15% decrease by number of funds, marking the lowest number of funds garnering commitments since the first half of 1995.

In other words: there are fewer venture capital firms raising money than 16 years ago, but they’re raising much larger funds.

This is how NVCA president Mark Heesen puts it:

“The fact that the number of firms raising money successfully remains at such low levels confirms an ongoing contraction of the venture capital industry, which will serve well those funds that can obtain commitments — but that group is becoming more and more narrow.”

There were 24 follow-on funds and 13 new funds raised in the second quarter of 2011.

For Q2 2011, Accel Partners accounted for 50 percent of the fundraising total. Accel Growth Fund II raised $875 million during the quarter, while Accel XI raised $475 million.

Yes, that’s $1.35 billion in total.

The largest new fund reporting commitments during the second quarter of 2011 was New York-based Level Equity Growth Partners I, which raised $120 million in its inaugural fund.