VCs raised $34.7 billion last year, an increase of 9.4% and the most the industry has raised since 2001, when it hoovered up $38.8 billion. Full breakdown here.
The obvious question: Does this mean we’re at the same stage of the cycle as we were back in 2000/2001? We’ll let someone from the industry make the “no” argument:
“While dollars raised in 2007 approached 2001 levels, the composition of these dollars based on fund stage
focus stands in stark contrast to the composition seen in 2001,” said Alex Tan, global manager for Private
Equity Content Operations at Thomson Financial. “Today’s composition consists of a broad diversification
across early, balanced, later, and expansion focused funds, compared to the beginning of the decade when
funds were focused almost exclusively on the early and balanced stages.”
Alex could have also said, by the way: “It’s a totally different, more modest bubble: No Pets.com, and almost no IPOs at all, for that matter. No extravagant launch parties for companies that barely exist. Very few Aeron chairs, Etc.” All of which is true.
On the other hand, we are all by almost all accounts in a recession, one we believe is about to hit the advertising market very soon. Today’s report about U.S. retail spending in December — down .4% — should accelerate that. So our question: If VCs have tons of cash to spend in a reeling economy, where will that money go? Sound off in comments below.
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