Despite a Strong Finish, Venture Capital Funds Had a Slow Year
BY Will Yakowicz
An industry trade group report finds that VC funds raised $16.7 billion in 2013.
Venture capital firms across the U.S. had a strong fourth quarter of 2013, but for the year suffered the worst numbers since the recession.
VC firms raised a total of $16.7 billion from 185 funds during 2013, a 15 percent decrease in dollar commitments from a year earlier, according to a new report by Thomson Reuters and the National Venture Capital Association, an industry trade group. It was the slowest year for fundraising since 2010, the report, released on Monday, found.
In the fourth quarter in 2013, U.S. venture capital firms raised $4.9 billion from 48 funds, a 12 percent increase compared to the previous quarter and a whopping 53 percent increase from the fourth quarter of 2012, according to the report.
Menlo Park, California-based Greylock Partners's Greylock XIV fund raised $1.0 billion in 2013, leading all venture capital funds for the year.
So what does this mean for startups looking for cash? Bobby Franklin, president and CEO of the National Venture Capital Association, said the strong note that 2013 ended on is a positive sign for the coming year.
There is "hard evidence of an improving exit market, which will actually help realize some of this positive momentum as limited partners again include venture as a vital component of their portfolio," he said in a press release. "If the IPO market continues to strengthen and receive quality offerings, we can expect more VCs involved in those exits to raise money in 2014, which will bode well for a new crop of startups looking to raise capital."
WILL YAKOWICZ is a reporter at Inc. magazine. He has covered business, crime, and politics at Patch.com, and his work has been published in Tablet Magazine and The Brooklyn Paper. He lives in Brooklyn, New York. @WillYakowicz