The value and number of U.S. venture capital commitments both dropped in the fourth quarter, with 35 funds raising about $3 billion, down from 49 funds raising $3.2 billion in the previous quarter, according to the National Venture Capital Association and Thomson Reuters.
Venture capital funds raised also declined 25% for the year at $12.3 billion.
The largest new fund raised in the fourth quarter was the $177 million NovaQuest Healthcare Investment Fund. Andreessen Horowitz Fund II enjoyed the largest fundraising among all funds in the fourth quarter at $650 million.
“Given current conditions, a limited number of venture firms will be able to successfully raise new funds in 2011, and many of these will be smaller than previous funds raised,” Mark Heesen, NVCA president, said in a news release.
However, Mr. Heesen said the downsizing in the venture capital industry “has positive implications for investors and entrepreneurs. An agile venture capital model likely translates into more capital efficient and fewer duplicative deals in the IT arena as well as less capital-intensive deals in the science and clean-technology arenas.”
NVCA spokeswoman Emily Mendell could not be reached for comment.