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Q1 2011 Venture Fund Raising Up in U.S., Down in Europe

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Venture capital (VC) funds in the U.S. raised $7.7 billion in the first quarter of 2011, nearly double the $3.9 billion raised in the first quarter of 2010, according to Dow Jones LP Source. Early-stage funds — those that invest in start up companies, such enterprises begun by university researchers — were among the VCs with increased funds raised in the first quarter.

The number of funds closing deals dropped to 25, however, the lowest number of closings since 2003. First quarter VC fund raising in Europe also dropped compared to the same period in 2010. Five funds raised $653 billion, compared to $1.3 billion collected in 2010.

Some 16 early-stage funds in the U.S. brought in $3.9 billion, a sharp gain over the same period last year when $736 million was raised. Only two funds, however, accounted for all but $500 million of that $3.9 billion quarterly total. Two late-stage funds raised $1.5 billion last quarter, while seven multi-stage funds took in $2.3 billion.

In Europe, all of the $653 billion raised for venture funds in the first quarter went to early-stage funds. In same period last year, early-stage funds accounted for two-thirds of the funds raised and with multi-stage funds accounting for the remainder.

The upward trend in VC fund raising reflects the same environment overall for private equity funds — that include VCs — in the U.S. Dow Jones LP Source reports that U.S.-based private equity funds raised $31.6 billion in the first quarter of 2011, more than double last year. Unlike European VC funds, however, overall private equity funds in Europe increased their fund raising in the first quarter by 39 percent, to $8.2 billion.

Read more: 2010 Venture Fund Raising Drops to Seven-Year Low

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