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More early-stage venture capital firms close on capital in 2013- report

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January 11
6:55 AM 2014

2013 saw a slowdown in venture capital fundraising, according to WSJ's Venture Capital Dispatch. The report showed that the capital raised which reached $19.66 billion was 10% less than that raised in 2012 which amounted to $21.86 billion.

However, there were more venture firms that closed on capital in 2013 compared to that in the previous year. Last year there were 205 firms that closed on capital compared to the 185 firms that did the previous year. The jump happened with early-stage companies where 151 firms were able to close on capital. In 2012, there were only 118 firms that accomplished the feat. The early-stage firms were able to gather $9.37 billion which represented a 51% increase from the 2012 figures, the report said.

The number of closings posted from early stage last year was the most since the tech bubble burst in 2001. Back then there were 199 funds that had closing. However, those funds were able to raise $22.47 billion which was considerably more than what the early stage funds gathered last year.

The report said it is a fact of life in venture capital that capital is concentrated in only a few companies. Last year, there were only 14 funds of at least $400 million that closed $9.94 billion. This was represented over half of the capital gathered by all 205 funds that were able to close in 2013.

One fund, Insight Venture Partners VIII LP, made up 13% of all the committed capital. The fund raised $2.57 billion, the report said.

Early stage technology investors holding hot portfolios were also a hot commodity. An example is Greylock Partners, a firm that successfully invested in Facebook Inc and Workday Inc. The startup investor was able to raise about $1 billion for its 14th fund, the second biggest fund that closed last year, the report said.

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