Follow-On Funds Dominate Fundraising Activity
NEW YORK, April 14 /PRNewswire-FirstCall/ -- Fifty-seven venture capital
firms raised $6.3 billion in the first quarter of 2008 according to Thomson
Financial and the National Venture Capital Association (NVCA). The number of
funds raised in the first quarter of 2008 decreased by 31% from the same
period in 2007 while the dollar value remained unchanged.
Fundraising by Venture Funds, 2002-1Q 2008*
Venture Capital
Year/Quarter Number of Funds Venture Capital ($M)
2003 152 10,629.2
2004 211 19,144.3
2005 231 28,396.9
2006 233 31,757.1
2007 248 35,855.4
YTD 2008 57 6,264.5
1Q'06 75 6,584.8
2Q'06 79 14,245.2
3Q'06 68 5,390.3
4Q'06 67 5,536.8
1Q'07 83 6,214.7
2Q'07 84 9,136.1
3Q'07 79 8,810.5
4Q'07 79 11,694.1
1Q'08 57 6,264.5
Source: Thomson Financial & National
Venture Capital Association
*These figures take into account the
subtractive effect of downsized funds
"The interest by venture capitalists in capital intensive industries such
as life sciences and clean technologies will likely drive fund sizes upwards
for the foreseeable future," said Mark Heesen, president of the NVCA. "The
long term investment horizon coupled with the dollars required to bring these
companies from the garage or lab to the market place will compel venture
capital firms to raise larger funds or accelerate their fundraising cycle to
sustain these promising companies. Yet, since many top tier firms have raised
funds in the last few years, fundraising activity may actually slow in 2008.
But there is no shortage of opportunities, nor is there a shortage of
institutional investors interested in participating in the venture capital
asset class."
In the first quarter of 2008, 29 early stage focused funds raised $2.8
billion, 23 balanced stage focused funds raised $3.2 billion, and two later
stage focused funds raised $119.8 million. Three expansion or seed stage
focused funds raised $108.3 million.
VC Funds: New vs. Follow-On
No. of New No. of Follow-on Total
2003 37 115 152
2004 50 161 211
2005 56 175 231
2006 47 186 233
2007 58 190 248
YTD 2008 5 52 57
1Q'06 18 57 75
2Q'06 12 67 79
3Q'06 12 56 68
4Q'06 17 50 67
1Q'07 22 61 83
2Q'07 15 69 84
3Q'07 15 64 79
4Q'07 23 56 79
1Q'08 5 52 57
Source: Thomson Financial & National
Venture Capital Association
The ratio of follow-on to new funds was approximately 10-to-1 in the first
quarter of 2008, compared to less than 3-to-1 in the first quarter of 2007.
Five new funds and 52 follow-on funds were raised in the first quarter.
The largest funds raised in the first quarter were Essex Woodlands Health
Ventures Fund VIII, L.P. (balanced stage; $734 million), Clarus Lifesciences
II, L.P. (balanced stage; $660 million), and Canaan VIII, L.P. (balanced
stage; $650 million).
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The Corporation's common shares are listed on the New York and Toronto stock
exchanges (NYSE: TOC; TSX: TOC).
The National Venture Capital Association (NVCA) represents approximately
480 venture capital and private equity firms. NVCA's mission is to foster
greater understanding of the importance of venture capital to the U.S.
economy, and support entrepreneurial activity and innovation. According to a
2007 Global Insight study, venture-backed companies accounted for 10 million
jobs and $2.3 trillion in revenue in the United States in 2006. The NVCA
represents the public policy interests of the venture capital community,
strives to maintain high professional standards, provides reliable industry
data, sponsors professional development, and facilitates interaction among its
members. For more information about the NVCA, please visit www.nvca.org.
SOURCE Thomson Financial and National Venture Capital Association
Emily Mendell of NVCA, +1-610-565-3904, emendell@nvca.org; Matthew Toole,
+1-646-822-7560, matthew.toole@thomson.com, or Sandy Anglin, +1-646-822-7334,
sandy.anglin@thomson.com, both of Thomson Financial
