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Year to date venture capital fundraising surpasses full year 2013 commitment levels

U.S. firms raise nearly $6.1 billion during third quarter 

U.S. venture capital firms raised $6.1 billion in new commitments from 60 funds during the third quarter of 2014, a 26 percent decrease compared to the number of funds raised during the second quarter of 2014 and a 21 percent decline by dollar commitments, according to Thomson Reuters and the National Venture Capital Association (NVCA). The level of dollar commitments raised during the third quarter of 2014 increased 40 percent compared to the third quarter of last year and brings the dollar volume of capital committed to U.S. venture capital funds during the first nine months of 2014 to $23.8 billion, eclipsing full year 2013 levels.

"Driven by a strong exit market for venture-backed companies and solid distributions over the last several quarters, the fundraising environment improved slightly over the last couple quarters for U.S. venture capital firms. Although down slightly on a quarter over quarter basis, total venture capital fundraising in 2014 has already eclipsed full year 2013 and is poised to reach a year-end total not seen since before the 2008 recession," said Bobby Franklin, President and CEO of NVCA. "We are encouraged to see a slight uptick in the number of new funds raised during the quarter and are hopeful this trend will continue as more and more limited partners seek out new opportunities to increase their exposure to the asset class."

Commitments were received by 36 follow-on funds and 24 new funds during the third quarter with 88 percent of new capital committed going to follow-on funds. The number of new funds raised during the third quarter marks a slight increase from the number of first-time funds raised during the second quarter of this year and the number of follow-on funds raised during the third quarter of this year registered a 33 percent increase from the third quarter of 2013.

The largest new fund reporting commitments during the third quarter of 2014 was from Renton, Washington-based Providence Ventures, which raised $150.0 million for the firm’s inaugural fund. A "new" fund is defined as the first fund at a newly established firm, although the general partners of that firm may have previous experience investing in venture capital.

Third quarter 2014 commitments were led by New York-based J.P. Morgan Digital Growth Fund II, L.P. which raised $996.4 million, and New York-based SG Growth Partners III, L.P. which raised $500.0 million. The five largest venture capital funds raised during the third quarter of 2014 accounted for 48 percent of new commitments, a slight uptick from the second quarter of this year when the top five venture capital funds accounted for 44 percent of overall commitments.

The Thomson Reuters/National Venture Capital Association sample includes U.S.-based venture capital funds. Classifications are based on the headquarter location of the fund, not the location of venture capital firm. The sample excludes fund of funds.

Effective November 1, 2010, Thomson Reuters venture capital fund data has been updated in order to provide more consistent and relevant categories for searching and reporting. As a result of these changes, there may be shifts in historical fundraising statistics as a result of movements of funds between primary market & nation samples and/or between fund stage categories.