Fewer Venture Funds Raise More Capital in Q3 2010

Thomson Reuters, a business news and database publisher, and the National Venture Capital Association report today that U.S. venture capital (VC) companies raised nearly $3 billion in the third quarter of 2010, up from $2.1 billion in the second quarter of the year. However, the number of VC companies raising funds in the third quarter fell from 51 to 45.

The $2.99 billion raised by 45 VC companies in the third quarter of 2010 represents a 40 percent increase over the $2.14 billion raised by 51 firms in the previous quarter. However, almost 4 of every 10 dollars raised in the third quarter were by two companies: Institutional Venture Partners XIII of Menlo Park, California that raised $750 million and Third Rock Ventures II of Boston, Massachusetts that raised $426 million.

Some 14 new funds — initial funds at newly established VC companies — reported raising capital in the third quarter, compared to 31 follow-on funds. Since the second quarter of 2008, the number of new funds has stayed about the same, with 12 to 14 reported each quarter. The number of follow-on funds raising capital, however, have fluctuated between 20 and 38 each quarter.

Related: Venture Fund-Raising Remains Slow So Far in 2010