Venture Capital Companies Raise Over $17 Billion – Best For 8 Years
Following an average 2013 for venture capital companies, 2014 set off with a bang with Thompson Reuters reporting first-half fundraising to have reached $17.3 billion, the highest level for 8 years. This impetus slowed slightly into Q3, with the first seven weeks bringing in $4.3 billion, although analysts and venture capitalists are forecasting a total of $25 billion for the year.
Most investment has again been in technology, with Technology Crossover Ventures (TCV) top, raising $2.5 billion with its latest fund. This is the Silicon Valley venture capital firm that also has investments in Netflix and Facebook. TCV recently invested $250 million in Vice Media, the trendy controversial media group based in Brooklyn, in exchange for around a 10% interest in the company. Vice received another $250 million from TV firm A&E; Networks, owned by Hearst and Disney, for a similar deal.
Others exceeding $1 billion are Accel Partners, Adreessen Horowitz, Founders Fund and Norwest Venture Partners. These are the five who had exceeded the $1 billion figure by August 17, 2014. No doubt the numbers will increase by the end of the year.
Although VC portfolios are behaving very well at the moment, future developments are likely to be affected significantly by any downturn in the U.S. economy. This is a very volatile period in American politics and the economy, although it does not yet appear to be affecting the level of VC funding or investment.
Things look good for VCs looking to the final quarter of 2014 and going into 2015. Most investment is being made in emerging technology, traditional industries having to work hard to provide good reasons for continuing finance. Seed and early stage investments tend to predominate, although some VCs are still offering expansion and later-stage funding.