Venture capital firms are still raising large amounts of money from their investors, but data about their actual investments in U.S. start-ups is showing anemic growth at best. Here are our recent stories (here and here)

Experts have provided a host of explanations, for example the possibility that more start-ups are staying in “stealth” mode longer, making data collection about venture investments difficult, or that the increase in money being raised by venture capitalists is just a cyclical thing — they’re replenishing their coffers, but don’t necessarily have more money than usual to give out.

We’ll probably remain in the dark for now. But some readers have suggested that money raised by U.S. venture firms may be going to foreign start-ups. We’ve heard this argument before, but its very difficult to track — as much money going abroad gets funneled through start-ups with a “shell” headquarters here. We asked the National Venture Capital Association’s Mark Heesen about this, and he seems to think the move abroad isn’t significant enough to seriously skew the data. The move will happen, he says, but it will be more “glacial” than sudden, as venture firms continue to confront the challenges of investing in places like India and China. Particularly in China, VCs have to deal with things like lax protection of intellectual property, and government restriction on repatriating profits. “People are becoming much more reticent about China than they were a year ago,” he said.

That said, Battery Ventures, which has offices in San Mateo, raised a $450 million fund in September, and recently led it’s first investment in India: $15 million in Bangalore’s Tejas Networks, which is developing optical networking products in the Indian market for a fraction of what American companies do, says partner Thomas Crotty. Battery hopes to help it expand into the U.S market with the help of a partnership with Nortel, he said. Matrix Partners, another big-name firm with offices in Menlo Park, also recently opened an office Bangalore to start investing there. They plan on about one or two a year. Stay tuned as we follow this trend — unfortunately, there are no great statistics out there that reliably quantify it.

Here’s a copy of the NVCA’s report about recent fundraising: Download file

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