Financial News

Venture Capital Fundraising Activity Registers Second Consecutive Quarterly Decline in the Third Quarter of 2009

NEW YORK, Oct. 12 /PRNewswire/ -- Just 17 venture capital funds raised $1.6 billion in the third quarter of 2009, according to Thomson Reuters and the National Venture Capital Association (NVCA). This level represents the smallest number of venture funds raising money in a single quarter since the third quarter of 1994 when 17 funds were also raised and the lowest level of dollars committed since the first quarter of 2003 when $938 million was raised.

                           Fundraising by Venture Funds

                                      Number of        Venture
                      Year/Quarter        Funds     Capital($M)
                      ------------    ---------    -----------
                      2004                  218       19,154.4
                      ------------    ---------    -----------
                      2005                  242       28,962.7
                      ------------    ---------    -----------
                      2006                  242       31,925.0
                      ------------    ---------    -----------
                      2007                  251       36,064.9
                      ------------    ---------    -----------
                      2008                  224       28,604.6
                      ------------    ---------    -----------
                      2009                  87         8,374.6
                      ------------    ---------    -----------
                      3Q'07                 77         8,595.8
                      ------------    ---------    -----------
                      4Q'07                 86        12,322.5
                      ------------    ---------    -----------
                      1Q'08                 74         7,228.4
                      ------------    ---------    -----------
                      2Q'08                 82         9,284.5
                      ------------    ---------    -----------
                      3Q'08                 63         8,497.0
                      ------------    ---------    -----------
                      4Q'08                 49         3,594.7
                      ------------    ---------    -----------
                      1Q'09                 50         4,810.9
                      ------------    ---------    -----------
                      2Q'09                 27         1,965.5
                      ------------    ---------    -----------
                      3Q'09                 17         1,557.8
                      ------------    ---------    -----------
                      Source: Thomson Reuters &
                      National Venture Capital Association

"Anecdotally we are hearing that fundraising activity is accelerating as more firms that were waiting for economic recovery are beginning to formally seek commitments," said Mark Heesen, president of the NVCA. "The reality, however, is that many limited partners are still determining their long term strategies in wake of the past year's financial crisis and that slows the process down considerably. We expect commitment levels to remain modest for the remainder of 2009 with gradual increases beginning in 2010."

There were four new funds and 13 follow-on funds raised in the third quarter of 2009, a ratio of about 3-to-1 of follow-on to new funds. The largest new fund reporting commitments during the third quarter was Andreessen Horowitz Fund I, L.P, which raised $58.5 million in its inaugural fund. A "new" fund is defined as the first fund at a newly established firm, although the general partner of that firm may have previous experience investing in venture capital.

                      VC Funds: New vs. Follow-On

                                             No. of
                                  No. of    Follow-
                                     New         on      Total
                                  ------    -------      -----
                      2004            64        154        218
                      -----       ------    -------      -----
                      2005            68        174        242
                      -----       ------    -------      -----
                      2006            57        185        242
                      -----       ------    -------      -----
                      2007            62        189        251
                      -----       ------    -------      -----
                      2008            51        173        224
                      -----       ------    -------      -----
                      2009            15         72         87
                      -----       ------    -------      -----
                      3Q'07           15         62         77
                      -----       ------    -------      -----
                      4Q'07           27         59         86
                      -----       ------    -------      -----
                      1Q'08           12         62         74
                      -----       ------    -------      -----
                      2Q'08           23         59         82
                      -----       ------    -------      -----
                      3Q'08           14         49         63
                      -----       ------    -------      -----
                      4Q'08           12         37         49
                      -----       ------    -------      -----
                      1Q'09            3         47         50
                      -----       ------    -------      -----
                      2Q'09            8         19         27
                      -----       ------    -------      -----
                      3Q'09            4         13         17
                      -----       ------    -------      -----
                      Source: Thomson Reuters &
                      National Venture Capital Association

The largest fund raised in the third quarter was follow-on fund Khosla Ventures III, which raised $750 million for an early stage fund, followed by Draper Fisher Jurvetson X, L.P. which saw $196 million in fund commitments during the third quarter of 2009.

About Thomson Reuters

Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, scientific, healthcare and media markets, powered by the world's most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people in 93 countries. Thomson Reuters shares are listed on the New York Stock Exchange (NYSE: TRI); Toronto Stock Exchange (TSX: TRI); London Stock Exchange (LSE: TRIL); and Nasdaq (Nasdaq: TRIN). For more information, go to www.thomsonreuters.com.

mailto:'John.taylor@nvca.org'

About National Venture Capital Association

The National Venture Capital Association (NVCA) represents more than 400 venture capital firms in the United States. 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 2009 Global Insight study, venture-backed companies accounted for 12.1 million jobs and $2.9 trillion in revenue in the United States in 2008. 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.

SOURCE Thomson Reuters; National Venture Capital Association

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