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Venture firms raise $8.9B in first quarter as exit picture brightens

04/14/2014

Venture firms across the U.S. raised a collective $8.9 billion in the first three months of 2014, marking the industry's healthiest quarter in seven years, according to data released Monday by the National Venture Capital Association and Thomson Reuters.

The capital flowed into 58 funds during the quarter, 25 of them launched by newly created firms. 

In the same period in 2013, 48 U.S. venture firms raised $4.4 billion, according to NVCA data. Last quarter's $8.9 billion represents the highest VC fundraising total since the $10.4 billion raised in the fourth quarter of 2007.

Limited partners, the groups that typically invest in venture — pension funds, college endowments, foundations, wealthy individuals and others — collectively pulled back from the risky asset class following the recession, leaving many firms struggling to raise their next fund. Monday's numbers are more evidence that LPs are again warming to venture.

The VC fundraising uptick coincides with a healthier exit market compared with the years following the recession, especially in initial public offerings. Last quarter saw 36 venture-backed IPOs that raised a collective $3.3 billion, more than half of which was concentrated in the biotech sector. Locally, that included Gaithersburg-based GlycoMimetics Inc. (NASDAQ: GLYC), which  raised $64.4 million in its January IPO.

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