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July 17, 2006

VC fundraising heats up

Posted by Tricia Duryee at 4:21 PM

Venture capital fundraising broke new records in the second quarter, according to a report by Thomson Financial and the National Venture Capital Association (NVCA).

In fact, fundraising in both the venture capital and buyout classes of private equity reached new levels. During the quarter, 50 venture funds raised $11.2 billion, the highest level since the 2001, and 35 buyout and mezzanine funds raised $30.8 billion.

Several large funds in both buyout asset classes drove the unusually high level, according to the report.

Oak Investment Partners XII raised $2.56 billion, the largest venture capital fund ever raised. New Enterprise Associates 12 raised $2.25 billion. On the buyout side, Texas Pacific Group's TPG Partners V raised $14 billion.

"While this quarter's venture capital fundraising explosion is largely driven by a few players, we cannot pretend that this isn't an incredible amount of money to invest," said Mark Heesen, the NVCA's president. "It reflects a philosophy that companies need more money and a longer runway to go public today and these larger funds are going to support these enterprises from their infancy until their exit, which they hope in many cases is an IPO."

We'll find out early next week how this fundraising affected investing in companies.

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Tricia Duryee
Tricia Duryee
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