Venture Capital Fundraising Q4 2007

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Venture Capital Fundraising Q4 2007

  1. 1. Emily Mendell, NVCA, 610-565-3904, emendell@nvca.org Matthew Toole, Thomson Financial, 646-822-7560, matthew.toole@thomson.com Sandy Anglin, Thomson Financial, 646-822-7334, sandy.anglin@thomson.com 2007 VENTURE FUNDRAISING REACHES HIGHEST LEVEL SINCE 2001 Capital Intensive Investment Sectors Driving Accelerated Fundraising Pace New York, January 14, 2008 – Two hundred and thirty-five venture capital firms raised $34.7 billion in 2007 according to Thomson Financial and the National Venture Capital Association (NVCA). The number of funds raised in 2007 increased by a modest 2.6% from 2006 while dollar value increased by 9.4% from full-year 2006. Additionally, 2007 fundraising dollars reached the highest level seen since 2001 when venture capitalists raised $38.8 billion from 318 funds. Fundraising by Venture Funds, 2002-2007* Venture Capital Number of Venture Year/Quarter Funds Capital ($M) 2002 179 3,936.9 2003 152 10,606.1 2004 208 19,057.6 2005 228 28,282.6 2006 229 31,698.1 2007 235 34,675.9 4Q'05 83 9,276.2 1Q'06 75 6,544.5 2Q'06 77 14,185.5 3Q'06 67 5,375.3 4Q'06 65 5,592.8 1Q'07 80 5,754.2 2Q'07 85 9,141.8 3Q'07 77 8,763.7 4Q'07 63 11,016.2 Source: Thomson Financial & National Venture Capital Association *These figures take into account the subtractive effect of downsized funds “The consistent and consecutive annual increases in venture capital fund levels reflect both an acceleration of the fundraising cycle as well as an increased need for capital within certain investment sectors,” said Mark Heesen, president of the NVCA. “Venture firms are investing in many capital intensive industries such as life sciences and clean technology where the dollars required and time spent with the companies are both very high. As firms deploy capital faster they will have to go back out to the market sooner or raise
  2. 2. larger funds. Still, on the positive side, we are nowhere near the unsustainable fundraising levels of the 1999 to 2001 period when the industry raised more than $200 billion.” In 2007, 112 early stage focused funds raised $9.7 billion, sixty-three balanced stage focused funds raised $10.6 billion, twenty-four later stage focused funds raised $7.2 billion, and twenty-two expansion focused funds raised $4.8 billion. “While dollars raised in 2007 approached 2001 levels, the composition of these dollars based on fund stage focus stands in stark contrast to the composition seen in 2001,” said Alex Tan, global manager for Private Equity Content Operations at Thomson Financial. “Today’s composition consists of a broad diversification across early, balanced, later, and expansion focused funds, compared to the beginning of the decade when funds were focused almost exclusively on the early and balanced stages.” VC Funds: New vs. Follow-On No. of No. of New Follow-on Total 2002 22 157 179 2003 38 114 152 2004 51 157 208 2005 58 170 228 2006 46 183 229 2007 55 180 235 4Q'05 26 57 83 1Q'06 19 56 75 2Q'06 12 65 77 3Q'06 12 55 67 4Q'06 15 50 65 1Q'07 21 59 80 2Q'07 17 68 85 4Q'07 15 62 77 4Q'07 16 47 63 Source: Thomson Financial & National Venture Capital Association The ratio of follow-on to new funds was approximately 3-to-1 in 2007, compared to 2006 when the ratio was approximately 4-to-1. Fifty-five new funds were raised in 2007 compared to 180 follow-on entities. The largest funds raised in the year were Technology Crossover Ventures VII, L.P. (later stage; $3.0 billion), Bessemer Venture Partners VII, L.P. (balanced stage, $1.3 billion), and Vector Capital IV, L.P. (expansion stage; $1.2 billion). Thomson Financial, with 2006 revenues of US$2 billion, is a provider of information and technology solutions to the worldwide financial community. Through the widest range of products and services in the industry, Thomson Financial helps clients in more than 70 countries make better decisions, be more productive and achieve superior results. Thomson Financial is part of The Thomson Corporation (www.thomson.com), a global leader in providing essential electronic workflow solutions to business and professional customers. With operational headquarters in Stamford, Conn., Thomson provides value-added information, software tools and applications to professionals in the fields of law, tax, accounting, financial services, scientific research and healthcare. The Corporation's common shares are listed on the New York and Toronto stock exchanges (NYSE: TOC; TSX: TOC).
  3. 3. 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 2006 Global Insight study, venture-backed companies accounted for 10 million jobs and $2.1 trillion in revenue in the United States in 2005. 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.

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