No Happy Ending in Sight for VCs
Looks like there is no happy ending in sight for VC market! For the third quarter of 2010 forty five funds raised less than $3 billions. “With funds sizes getting smaller and fewer firms raising money, we are experiencing a period of time in which venture capital investment is consistently outpacing fundraising, creating an industry that will be considerably smaller in the next decade” said Mark Heesen, president of the NVCA. As I mentioned before; it is not necessary all bad news. Last quarter Institutional Venture Partners XIII, L.P. raised $750 million followed Boston, Massachusetts-based Third Rock Ventures II, L.P., which raised $426 million. These two funds account for 35% of the total! There will be less money out there, but at the same time there will be more focused and experienced VCs with larger funds. This will helps entrepreneurs to work with more mature and experienced VCs with enough money to support them all the way to the exit. There is no time and room for VCs which didn’t perform and just burn money without adding any value in the past decade.