Report: Q403 Was VC Prime Time

According to a news release, 43 funds closed on $5.2 billion in the October to December period, 47.8% of the full-year’s total of 113 venture capital funds raising $10.8 billion.

“We anticipate fundraising activities to increase in the quarters to come as more venture firms look to the future and begin to raise their next funds,” asserted Mark Heesen, NVCA president. “That said, the next generation of funds will be smaller than their predecessors, which will create an increasingly competitive environment for limited partners to maintain their allocations in the most respected funds.”

The majority of funds raising capital during the quarter continued to be follow-on funds, which indicates that commitments are flowing towards players with a proven track record, according to the announcement. The top five venture capital funds raised this quarter include:

• New Enterprise Associates 11
• Technology Crossover Ventures V
• Venrock Associates IV
• Domain Partners VI
• Three Arch Partners IV.

Together, the quintet raised $3.30 billion or 64.2% of the total amount of capital raised in Q4 2003. New funds such as Masthead Venture Capital Partners, L.P., Valhalla Partners, L.P., and NewSpring Ventures, L.P. were also successful in raising capital.

Although the number of buyout and mezzanine funds decreased slightly from the previous quarter, the amount raised nearly tripled. Twenty buyout and mezzanine funds raised $13.1 billion in the fourth quarter of 2003, compared to last quarter when 23 funds raised $4.7 billion. Buyout and mezzanine funds saw some sizable closings including TPG Partners IV, which held the largest close of the quarter at $5.3 billion. Other funds that raised large funds include First Reserve X, Silver Lake Partners II and Kelso Investment Associates VII.