Funds of $500M or more account for $5.7B of the total raised in 1Q 2016
U.S. VC funds ($B) by size
100%
$1B+
90%
80%
$500M-$1B
70%
$250M$500M
$100M$250M
$50M$100M
Under
$50M
60%
50%
40%
30%
20%
10%
2016*
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0%
Source: PitchBook
*As of 3/31/2016
Average fund size is weighted toward the higher end
U.S. VC fund size
$250
Median ($M)
Average ($M)
$200
$157
$150
$172
$100
Source: PitchBook
*As of 3/31/2016
$50
$50
$52
$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016*
Fundraisers are targeting more opportunistically, LPs willing to oblige
U.S. VC funds (#) to hit target
100%
80%
60%
40%
Hit Target
Missed Target
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
0%
Regardless of the primary causes,
as stated in the prior installment of
this report series, it’s clear LPs are
still willing to commit in droves to the
upper tiers of venture firms, whether
they target the early or late stages,
drawn by the allure of high returns that
top-quartile VC funds of fairly youthful
vintages have posted. The factors
that have driven LPs to continue
seeking considerable exposure to the
venture asset class remain in place for
now, so continued success in hitting
targets isn’t particularly surprising,
although still rather remarkable.
Accordingly, especially given how
strong fundraising numbers have
been for several quarters now on the
whole, fund managers have more than
enough capital to be invested in the
rest of 2016, which should serve to
only further soften any continuation
of a reset in the venture landscape.
But VC firms are still adapting to the
changing investment landscape, and
consequently won’t seek to deploy
capital at the inflated levels seen
in recent years unless given strong
incentives to do so.
2016*
20%
bodes well for continued investment
in the future. But many of these firms
would enjoy LP confidence in even
worse environments, and the typical
fund that happened to close in 1Q had
been in the works for some time, so
their closes could well have been more
a matter of either chance or signaling
to portfolio companies of their
backers’ health. As some might have
guessed, a widely predicted cooling in
round sizes and valuations encouraged
fundraisers to close, in anticipation
of a less expensive dealmaking
environment. Venture investors are
also closing now driven by the same
opportunistic, deadline-driven motives
many founders possess; they fear the
flow of money could begin to stutter,
for any number of reasons.
Source: PitchBook
*As of 3/31/2016
14
P I TC H B O O K 1 Q 201 6 U. S . V E N T U R E I N D U S T RY R E P O R T