1. Contacts:
Emily Mendell, The Wesier Group for NVCA, 610-359-9609, emendell@weisergroup.com
Joshua Radler, Thomson Venture Economics, 973-353-7139, joshua.radler@tfn.com
VENTURE CAPITAL FUNDRAISING LEVELS FALL BELOW $1 BILLION IN
FIRST QUARTER OF 2003
Venture Capital Reserves Continue to Sustain Investments
May 5, 2003 –Newark, NJ – Only twenty-two venture capital funds raised $996.1 million
in Q1 2003 as the industry continued to draw on outstanding commitments to fund young
companies, according to Thomson Venture Economics and the National Venture Capital
Association (NVCA). The fundraising levels represent a significant drop in fundraising
activity from the previous quarter, when 42 funds raised $1.7 billion. Taking into account
firms that reduced their fund sizes in the first quarter, the net amount raised was
$603.6M, a figure that has not been seen since Q3 1994 when the net amount totaled
$403.9M. Industry experts expect fundraising activity to remain low for the foreseeable
future as the venture capital industry steadily depletes its current reserves.
Venture Capital Buyout & Mezzanine
Year/Quarter # of Venture # of Buyout/
Funds Capital Funds Mezzanine
($ Millions) ($ Millions)
289 30,102.1 157 61,475.8
1998
451 61,166.9 152 57,245.1
1999
636 106,256.5 156 73,976.7
2000
291 38,369.4 117 44,243.8
2001
145 8,187.2 64 22,690.3
2002
22 996.1 13 1,049.8
2003
11 403.9 4 299.8
3Q'94
37 1,675.0 13 3,791.4
1Q'02
43 2,315.8 30 7,505.2
2Q'02
47 2,506.7 20 7,099.7
3Q'02
42 1,689.9 21 4,294.0
4Q'02
22 996.1 13 1,049.8
1Q'03
Source: Thomson Venture Economics & National Venture Capital Association
* The figures above do not take into account downsized funds.

2. The majority of the venture capital funds that did raise new capital were follow-on funds
such as Intersouth Partners VI, L.P., Caduceus Private Investments II, L.P., and ARCH
Venture Fund VI, L.P. Follow-on funds accounted for 72.7% of the total number of
venture capital funds raised in the first quarter of 2003. The trend reflects a desire by
many limited partners to place their assets with firms that have demonstrated a track
record of success. However, first time funds with strong value propositions and
investment focus were able to raise dollars as well. During the first quarter, new first-time
funds, such as Quaker BioVentures Fund I, Lumina Ventures, L.P., and NeuroVentures
Fund, L.P. successfully completed fundraising initiatives.
New Venture Capital Funds vs Follow-on
Funds
No. of New No. of Follow-on
160 291
1999
238 398
2000
91 200
2001
12 25
Q1'02
12 31
Q2'02
14 33
Q3'02
9 33
Q4'02
6 16
Q1'03
Source: Thomson Venture Economics & National Venture Capital Association
“It’s going to be a while before we see venture capital fundraising activity pick up,” said
Mark Heesen, president of the National Venture Capital Association. “The venture
industry currently has an $80 billion dollar overhang and we expect to see a significant
portion of those reserves to be deployed prior to seeing a substantial increase in
fundraising activity.”
Similar to the venture capital trend, buyout and mezzanine funds also showed the same
lower activity levels. While 21 buyout and mezzanine funds were raised in the fourth
quarter of 2002 for a total of $4294M, only 13 buyout and mezzanine funds raised capital
in the first quarter of 2003, totaling $1049.8M. The Sun Capital Partners III buyouts fund
was responsible for almost half of this amount, accounting for $500M.
The National Venture Capital Association (NVCA) represents over 470 venture capital
and private equity organizations. NVCA's mission is to foster the understanding of the
importance of venture capital to the vitality of the U.S. and global economies, to
stimulate the flow of equity capital to emerging growth companies by representing the
public policy interests of the venture capital and private equity communities at all levels
of government, to maintain high professional standards, facilitate networking

3. opportunities and to provide research data and professional development for its members.
For more information visit www.nvca.org.
Thomson Venture Economics, a Thomson Financial company, is the foremost
information provider for equity professionals worldwide. Venture Economics offers an
unparalleled range of products from directories to conferences, journals, newsletters,
research reports, and the Venture Expert™ database. For over 35 years, Venture
Economics has been tracking the venture capital and buyouts industry. Since 1961, it has
been a recognized source for comprehensive analysis of investment activity and
performance of the private equity industry. Venture Economics maintains a long-standing
relationship within the private equity investment community, in-depth industry
knowledge, and proprietary research techniques. Private equity managers and
institutional investors alike consider Venture Economics information to be the industry
standard. For more information about Venture Economics, please visit
www.ventureeconomics.com.
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TOC).
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