Venture Capital with massive Inflows in 2014

Due to increasing start-up valuations and a record of venture-backed IPOs, investors got attracted to venture capital investments. VC-funds have received outstanding sums last year.

In 2014, venture capital firms have raised nearly $30 billion. Compared to 2013, this is an increase of 62% in Dollar commitment. Every quarter, venture capital firms have received between $5.6 billion (Q4) and about $10 billion (Q1) form investors. The second quarter with $8 and the third with $6.2 billion of fresh investments round the sum up to the total of $29.8 billion raised last year. This makes it the highest sum since 2007, says a Thomson Reuters and National Venture Capital Association (NVCA) calculation based on 254 US VC-funds.

Some see this as the sign that the venture capital industry is back after years of slumping returns. “It’s good to see that fundraising levels are finally starting to catch up with the overall level of investment we’ve witnessed in the last few quarters,” said Bobby Franklin, President and CEO of NVCA.  “As a result of the strong exit market for venture-backed companies over the last couple of years, more money is being distributed back to investors who have chosen to redeploy that capital to the venture ecosystem.”
Scott Voss, a managing director at investment manager ­HarbourVest Partners, said venture industry returns in the past 12 to 24 months “have been some of the best venture-backed deals ever done”.

Returns for venture capital funds are good due to a strong IPO market. According to NVCA 115 venture-backed companies went public and raised $15.3 billion in 2014 compared to 81 firms raising $11.1 billion the year before.
According to Dow Jones VentureSource, the data looks not as great but still pretty good: They say that 105 venture-backed companies went public last year. This is still the highest number of firms since 2000.

In the last quarter alone, 75 funds have raised the $5.6 billion. Among those are 27 new funds and 48 follow-up funds. The largest new fund that opened in that quarter was the California-based Presidio Partners 2014 raising $140.4 million.