Fundraising by U.S. venture capital firms appears on track to surpass 2005, with $6.69 billion raised in 21 funds the third quarter of 2006, according to Dow Jones VentureOne.
Firms raised nine fewer funds than were raised in the third quarter of 2005, but the total amount was 17 percent more than a year ago.
The total for 2006 is currently on track to surpass $25 billion, which would be the highest amount since 2001, when about $50 billion was raised right as the Internet bubble was imploding.
The first three quarters of 2006 saw $19.66 billion raised by U.S. venture capital firms, putting the year ahead of the $16.72 billion raised in the first three quarters of 2005. However, the fourth quarter of 2005 was a particularly robust fundraising quarter, so it’s not clear whether 2006 will surpass last year’s level — which totaled $25 billion.
Notably, more funds raised in 2006 are larger funds. About 22 percent of the capital raised in 2006 are invested in funds of $500 million or greater, the largest percentage since VentureOne began compiling the data in 1992. That compares to only about 8 percent of the funds raised in 2005. This goes against the moves by firms like Charles River to shrink their funds.