Silicon Valley Venture Capital Q1 -- Not Bat At All
There are several signs that point to continued health in Silicon Valley's emerging growth, venture capital market. Most significantly, in my opinion, is the fact that exits remain strong. 111 venture-backed M&A deals in the first quarter of this year, according to the MoneyTree Report, which was the largest number of exits in a single quarter since MoneyTree began tracking deals more than 35 years ago. The MoneyTree also reported that there were 43 venture-backed companies currently in registration with the SEC for an initial public offering. 43 companies in registration is a healthy pipeline by anyone's standards, particularly since nine companies actually made it out in the first quarter, raising an average of approximately $104 million. The renewed exit activity has to give everyone a sense of optimism.
On the venture capital side, funds are definitely either having difficulty raising money or aren't in the market for new capital raises these days (something that I seriously doubt). According to the MoneyTree, the $3.6 billion raised in the first quarter represented the lowest aggregate raise by VCs in 17 years. This statistic doesn't bother me that much because trouble raising money from limited partners coming out the nuclear winter of 2009 is to be expected. There is little doubt, though, that the increase in venture-backed company exits will loosen the purse strings of at least a few LPs in the second quarter and beyond.
As with any statistical survey, one must read the above with a grain of salt or two. VentureSource has slightly different numbers, citing 77 venture-backed M&A deals, eight initial public offerings and a full billion more in raise by venture capital funds. I'm not sure which set of numbers is actually correct. One could certainly surf Edgar and figure out the IPO statistic easily enough, but that isn't the point. The point is that the activity is much more robust than the previous quarter, and that is noteworthy in and of itself.
