Divide Between Venture ‘Haves’ and ‘Have-Nots’ Gets Bigger

Lately, it seems that firms chasing late-stage deals are getting all of the attention from the media.

Turns out the same is true of LPs. According to data released today by the NVCA, the vast majority of the venture firms aren’t getting much love from institutional investors, with just 37 funds able to raise a fund in the second quarter of this year. That’s the lowest number of funds to close on a vehicle in one quarter since, gulp, 1995.

Adding insult to injury, half the amount of those funds raised — $2.7 billion -– went to Accel Partners. The Palo Alto, Calif.-based firm raised an $875 million growth fund and a $475 million early-stage fund in less than two month’s time, according to a release that Accel issued several weeks ago.

Other data show just how big a divide is growing between the fundraising winners and losers.

U.S. venture capital fundraising during the first half of this year hit $10.2 billion, raised by 76 funds, according to the NVCA. That’s a 67% increase in dollars, compared to the first half of last year. But that’s where the good news ends for most of the industry, because the money was raised by 15% fewer funds in the most recent period.

Unsurprisingly, NVCA President Mark Heesen voiced some alarm in an accompanying release this morning: “While a smaller venture industry will intuitively produce higher returns, it is critical that the mix of funds remain geographically diverse and cover a broad base of industries if we expect to contribute to economic growth and innovation at the levels we have historically.”

Fundraising by Venture Funds

Year/Quarter     Number of Funds     Venture Capital Raised ($M)

2007     233     $30,739.7

2008     212     $25,814.7

2009     153     $16,191.9

2010     162     $13,346.3

2011     76     $10,419.1

1Q’09     58     $4,945.9

2Q’09     39     $4,844.2

3Q’09     34     $2,332.0

4Q’09     47     $4,069.8

1Q’10     45     $4,033.8

2Q’10     48     $2,098.4

3Q’10     53     $3,593.8

4Q’10     45     $3,620.3

1Q’11     42     $7,728.3

2Q’11     37     $2,690.7