Fewer venture firms raised more money during 2011, and the money is being concentrated in the hands of fewer firms, according to the National Venture Capital Association. The venture capital industry group reports that 38 U.S. venture capital funds received $5.6 billion in the fourth quarter of 2011; but only nine of those were new funds,the data released Monday from the NVCA shows.
In 2011, 169 venture firms raised $18.17 billion from limited partners such as university endowments and pension funds. In 2010 the same number of firms raised only $13.78 billion– or 30 percent less. While more money would mean good news, but that isn’t the case. The number of startups looking for money has gone up sharply. An active angel community and early stage investors that can put money in early stage deals, means entrepreneurs has helped many startups set-up shop. They are likely to face their biggest fundraising challenge at the Series B round, a problem that has been mounting.
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