Monday, November 14, 2005

VentureScape Through 3Q05

Who are you going to believe? Is it the VentureOne survey indicating 27 firms have raised $5.91 billion in 3Q05, up from 26 funds closing $5.11 billion in the same period last year, or are you going to buy the National Venture Capital Association data indicating 45 firms raising $5.39 billion in the quarter, likewise up over the same period last year, where 54 firms raised $4.83 billion.

The take-home message appears clear…fund raising is on the rise. This may be attributed to an increase in allocation to alternative investments by institutional and other limited partners. Median fund sizes have doubled in only two years, $100 million in ’03 to $200 million in ’05, and 35% of funds that have closed in ’05 have been between $250 million and $1 billion.

On another note…The Life Sciences sector (Biotechnology and Medical Devices industries, together) outpaced the prior quarter with $1.6 billion invested in 155 companies in the third quarter. For the first nine months 2005, Life Sciences accounted for $4.2 billion or 26% of all venture investing. At the current rate, Life Sciences will meet or exceed 2004’s total of $5.8 billion.

(Source: NVCA)

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