The overall number of funds receiving capital dropped considerably, as 95 US-based venture capital funds raised $16.1 billion, compared with 147 funds raising $23.8 billion in the fourth quarter of 2000.
The average fund size stood at $169.5 million, representing the third-highest average of the past two years.
While institutional investors are still willing to commit money to venture capitalists, they’re being more selective.
This is evident when considering the amount of capital that went to follow-on funds. Of the 95 funds raised this quarter, 66 of them were follow-on funds.
“Institutional investors continue to have confidence that venture capitalists will be able to find excellent opportunities and build great companies in the years to come,” said Mark Heesen, president of the National Venture Capital Association.
With fewer funds being raised but capital levels still strong, six billion-dollar funds closed this quarter. Of the six funds, four were raised entirely this quarter. The largest of the three, Oak Investment Partners X, closed on $1.6 billion. The four funds represented 32% of the total amount committed.
Interest in early stage venture capital remains strong as $5.7 billion, or 36%, of the $16.1 billion raised went to funds with an early stage focus.