According to figures obtained by Thomson Reuters and the National Venture Capital Association, fundraising efforts of American venture capital firms have declined by as much as 14% or just US$4.05 billion in the first quarter. The numbers signify that the industry is off to a weak start and is now being circled by investor concerns on low returns on investments made.
The survey showed that 35 individual funds raised the finances compared to a high of 53 in 2012. According to the NVCA, this is the smallest number of funds that have been raising money since 2003.
Another major issue is that the returns for venture capital investments have been performing below par in the bourses. According to research conducted by the consultancy firm Cambridge Associates, for the period ending Sept 30, 2012 over a ten year span, venture capital returns were only at 6.1% while the Nasdaq composite index is at 10.3%.
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