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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

August 3, 2007 at 9:02 AM

New VC funds and how they are doing

Investors at U.S. venture capital firms raised $3.23 billion to add to their coffers during the second quarter, according to a report published by Dow Jones VentureOne this week.

That represents a decline of 62 percent from the same period last year — the biggest decline since 2002.

During the period, there wer 15 venture capital funds raised, compared with 25 a year ago. That was the lowest quarterly fund total since the first quarter of 2003.

Although the numbers are down from last year, five huge venture funds skewed the 2006 numbers by raising more than $7.92 billion in capital. And, in 2005, two supersized funds raised $2.6 billion.

Even though funds have not been raising as much money recently, they are still performing well.

On Thursday, a separate report found that venture-capital performance continued to show positive returns in most investment areas during the first three months of the year, according to Thomson Financial and the National Venture Capital Association.

The report said an increase in the first quarter this year shows more companies have gone public or been acquired since the Internet bubble burst.

“The venture capital industry continues to outperform the public markets long term, offering strong returns to its limited partners, which include pension funds, endowments and foundations,” said Mark Heesen, NVCA president.

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