VCs raise $7.7B, largest quarter since 2001

2011 gets off to a big start as funds flow into venture capital coffers

The amount of private equity and venture capital raised in the U.S. is way up in the first quarter of 2011, versus the same time last year, according to the latest data from Dow Jones LP Source. As a whole, private equity is up in Europe, but venture capital took a 50% slash.

Private equity funds in the U.S. secured $31.6 billion for 89 funds, more than doubling the $13.5 billion raised for 81 funds from last year.

European funds totaled $8.2 billion, up 39 percent from the $5.9 billion raised a year earlier, but the number of closings dropped to 22 from 32.

Venture capital funds in the U.S. raised $7.7 billion in the first quarter of 2011, nearly doubling the $3.9 billion raised in the same period last year and the highest first-quarter total since 2001. At the same time, only 25 funds closed this past quarter--not just a dip from the same time last year but actually the lowest count of first-quarter closings since 2003. Dow Jones says firms like Sequoia Capital and Bessemer Venture Partners are responsible for consolidating much more of the money in larger funds.

Early-stage funds brought in $3.9 billion for 16 funds, over five times more than the $736 million raised for 18 funds in the same period last year. Later-stage funds brought in $1.5 billion for two funds, resurrecting a sector that raised no money in the first quarter of 2010. Multi-stage funds raised $2.3 billion, 26 percent less than a year ago.

“With some of the larger U.S. venture funds closed and the industry with more than half the 2010 fund-raising total already in its pocket, the next couple of quarters will tell us if limited partners hit their spending limit for venture funds or will continue to commit capital to the asset class,” explains Scott Austin, editor of Dow Jones VentureWire.

European venture firms raised $653 million for five funds during the first quarter, down from $1.3 billion raised for 13 funds during the same period in 2010.