A recent report released by Thomson Reuters, indicates that despite a strong finish, 2013 was a down year for fundraising by venture capital firms. The $14.9 billion raised by 48 funds in Q4 were the strongest numbers since Q3 of 2012, however, the $16.7 billion raised in 2013 was a 15% decrease from 2012, and the lowest figure since 2010.
Venture capital fundraising in 2013 ended much in the way it began – with continued concentration within the larger funds and a sense of optimism for the coming year. The difference today is that there is hard evidence of an improving exit market, which will actually help realize some of this positive momentum as limited partners again include venture as a vital component of their portfolio. If the IPO market continues to strengthen and receive quality offerings, we can expect more VCs involved in those exits to raise money in 2014, which will bode well for a new crop of startups looking to raise capital.
Live Oak Venture Partners lead local venture capital firms in 2013, raising a reported $72.3 million of an expected $100 million fund, based on filings made with the Securities and Exchange Commission.
While the 2013 numbers are nothing to get excited about, the trend at the end of the year seems to bode well for startups looking for venture financing. Whether this positive trend will continue into 2014 is anybody’s guess, but the numbers posted in 2013 are, at a minimum promising.