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AltAssets is the private equity news and research service from Almeida Capital
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PRINT THIS PAGE Q1 number of US venture capital funds raised lowest since 200315/04/2008. Source: AltAssets. 
With 57 venture capital funds raised in the US, the first quarter of this year saw the lowest number of funds raised since the third quarter of 2003, when there were only 34, according to the US National Venture Capital Association and Thomson Financial. The figure represents a decrease by 31 per cent from the same period in 2007.
The dollar value remained almost unchanged. In the first quarter of 2008 firms raised $6.26bn, compared to $6.21bn in Q1 2007 (raised by 83 funds).
The picture is completely different from the previous quarter. In Q4 2007 both the number of funds (79) and the amount of capital raised ($11.69bn) were significantly up from Q4 2006, when 67 funds raised $5.54bn.
Fundraising in Q1 2008 was dominated by follow-on funds. There were 52 follow-on funds raised in the first quarter and just five new funds, representing a ratio of approximately 10:1. The ratio of follow-on to new funds was less than 3:1 in the first quarter of 2007.
The first quarter of 2008 saw 29 early stage focused funds raise $2.8bn, 23 balanced stage focused funds raise $3.2bn and two later stage focused funds raise $119.8m. Three expansion or seed stage focused funds raised $108.3m.
Mark Heesen, president of the NVCA, said, '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.
'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,' Heesen said.
The largest funds raised in the first quarter were Essex Woodlands Health Ventures Fund VIII (balanced stage; $734m), Clarus Lifesciences II (balanced stage; $660m) and Canaan VIII (balanced stage; $650m).
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