“Show me the money!” – Rod Tidwell, Jerry Maguire Only if it was so easy for Venture Capital and Private Equity managers to raise Capital Commitments. Last week, I ran across a comprehensive report published by Campton Private Equity Advisors, which provided, amongst many other things, 2012 fundraising data for Venture Capital and Private Equity.  I won’t bore you with the raw data, but the report did highlight some interesting market themes. Theme 1:  Contraction within Venture Capital is continuing, but it is SLOW process: Domestically, there were 923 firms that did at least 1 deal in 2012 (follow-on or new), but only 430 firms had funds that did at least one new deal in 2012, vs. 1300 and 990 in 2000.  The fact remains that funds, no matter how poor the performance, have an extremely long tail.  According to the NVCA, 73% of funds end up with a life of >13 years.  Perhaps the JOBS act or the hope of a private exchange like the one recently announced by Sharespost/NASDAQ will help remedy the long-term illiquidity problem, but it’s likely not enough to significantly truncate time to liquidity for most companies. Of the roughly 500 or so firms that are not making new investments, I’m guessing that the majority are likely in wind down phase, or as many call them, the “walking dead”  That said, It’s virtually impossible to say how many firms fall into this realm, as firms don’t exactly openly announce that they will be closing their doors. My best guess is of these 500 firms, 300 of these firms will be gone, at least in current form, within 5-7 years, 100 are likely to raise again, and another 100 fall in the TBD zone, reliant upon a successful reformation or a few fortunate exits to remain viable. Theme 2: Bifurcation within Venture is continuing and is becoming more pronounced: Sub theme 1: Venture Fundraising remains extremely top-heavy.  In 2012, 9 firms (Andreeson, Seqouia, IVP, Lightspeed, Bain VC, NEA, Caanan, KP, GGV), across 10 funds, closed on 50% of the total capital raised in 2012.  Expand this to the top 15 firms, and the number rises to ~65% of total capital raised.   Contrast this figure with 2007-2008, when the top ten funds accounted for only 25% of total capital raised.  What does this mean? Quite simply, a continued flight to quality.   Expect this trend to continue, particularly when accounting for the fact that top Quartile Funds have a 10 year avg. return of 9% over the median fund manager. Sub theme 2:  On the other end of the Barbell, the proliferation of capital into new firms continues. Over the last 2...

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