Following a December surge, when U.S. venture firms invested $7.2 billion in 342 deals nationwide, VC activity reset at a lower pace during the first quarter of 2015, according to data being released today by CB Insights.
The New York venture capital tracker says VCs invested $11.3 billion in 805 startups over the three months that ended March 31.
That was a 17.5 percent drop from the $13.7 billion that VCs invested in the prior quarter, and a 14.6 percent decline from 943 deals in the fourth quarter.
In the first quarter of 2014, venture firms invested $10.1 billion in 918 deals.
Yet the first-quarter decline in VC activity belied an increase in overall investment activity, as hedge funds, private equity, mutual funds, and sovereign wealth funds poured more capital into later-stage deals with venture-backed companies. When such sources are included, CB Insights says 1,011 U.S. venture-backed companies raised a total of $17.7 billion in the first quarter.
So venture firms are facing more competition in later-stage deals. According to CB Insights, VC firms typically lack the amount of assets that mutual funds and big private equity funds have under management, and VCs might not be willing to match the valuations that bigger players are offering.
“What we are seeing is
Author: Bruce V. Bigelow
In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here.
Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University.
Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.
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