Allen Latta's Thoughts on Private Equity, Etc.
  • Allen's Blog
  • Blog Post Categories
  • Glossary of Private Equity Terms
  • Resources
  • About
  • Contact

VC Firms Raise $8.8 Billion in Second Quarter; $22.9 Billion Year-To-Date

7/12/2016

0 Comments

 
Venture capital firm have raised $8.8 billion in the second quarter of 2016, raising 67 funds according to Thomson Reuters and the National Venture Capital Association (NVCA).  In the first half of 2016 126 funds have raised a total of $22.9 billion.  This compares to the first half of 2015 when 129 funds raised a total of $18.6 billion.  The 2016 year to date totals suggest that total fundraising will likely exceed $30 billion this year and could even reach $40 billion.
While the numbers are impressive, I believe there may be cause for some concern.  These totals don't include monies allocated to venture capital by corporate venture capital arms, mutual funds and hedge funds.  These totals don't take into account angel investors.  The bottom line is there is a ton of money in the venture capital ecosystem.  This money will finance hundreds of venture capital companies over the next several years.  The problem is that the exit market isn't keeping pace with this explosion of capital into the venture world.  The amount of capital raised by funds but not invested is known as dry powder.  There seems to be lot of dry powder in the industry right now.

In the first half of 2016, there were 155 total M&A deals, with disclosed value of $14.1 billion and 18 initial public offerings raising $1.5 billion, again according to Thomson Reuters and the NVCA.  This means a total of 173 liquidity events.  However, there were 1,061 deals in the first quarter of 2016 according to PricewaterhouseCoopers LLP and the NVCA, suggesting around 2,000 deals in the first half of 2016.  Now the number of deals is different than the number of companies, but one gets a sense of the number of companies that have received venture capital funding is very large compared to the number of liquidity events.  If companies don't or aren't able to achieve a liquidity event, the rates of return for venture capital will ultimately suffer.

Venture capital is a cyclical industry, and the amount of dry powder may be cause for concern.

Links:
http://nvca.org/pressreleases/venture-investors-raise-8-8-billion-second-quarter-invest-innovative-startups/

http://nvca.org/pressreleases/venture-backed-biotechnology-companies-continue-lead-charge-public-markets-tech-companies-remain-sidelines/

​http://nvca.org/pressreleases/12-1-billion-venture-capital-deployed-startup-ecosystem-first-quarter-according-moneytree-report-3/


​
0 Comments
    About this Blog

    This Blog is a collection of thoughts on a variety of topics of interest to me, including:
    • Private Equity
    • Buyouts
    • Growth Equity
    • Venture Capital
    • Corporate Finance
    • Investment Banking
    • IPOs
    • M&A
    • Technology
    • Economics
    • Law
    I hope you find this blog of interest.
    View my profile on LinkedIn

    Categories

    All
    Anti-Dilution
    Berlin
    Board Of Directors
    Brazil
    Buyouts
    California
    China
    Cleantech
    Corporate Finance
    Corporate Venture Capital
    Crowdfunding
    Dilution
    Dividend Recap
    Economics
    Emerging Managers
    Endowments
    Entrepreneurship
    Europe
    Fund Terms
    General
    Growth Equity
    Healthcare
    India
    Innovation
    Investment Banking
    Ipo
    Israel
    Law
    Legal
    Libor
    Life Sciences
    Listed Private Equity
    London
    Los Angeles
    LP Corner
    M&A
    Mexico
    New York
    Pensions
    Politics
    Private Equity
    Public Stocks
    San Francisco
    Secondaries
    Secondary Exchanges
    Silicon Valley
    South America
    Speaking
    Stock Market
    Stock Options
    Tax
    Technology
    Travel
    United Kingdom
    Valuation
    Venture Capital
    Venture Capital Deal Terms
    Webinars


    Archives

    October 2021
    August 2021
    July 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    February 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    February 2016
    January 2016
    November 2015
    October 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011


    Copyright Notice:

    ​All original works on this site are 
    © 2011-2020 Allen J. Latta. All rights reserved.  Neither this website nor any portion thereof may be reproduced or used in any manner whatsoever
    without the express prior written permission of Allen J. Latta.

    LP Corner® is a registered trademark of Campton Private Equity Advisors.  Used with permission.

    DISCLAIMER:  Readers of this Blog are not to construe it as investment, legal, accounting or tax advice, and it is not intended to provide the basis for the evaluation of any investment.  Readers should consult with their own investment, legal, accounting, tax and other advisors to the determine the benefits and risks of any investment.

    Private equity investments involve significant risks, including the loss of the entire investment.

    This Blog does not constitute an offer to sell or the solicitation of an offer to buy any security.

Copyright © Allen J. Latta.  All rights reserved.