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Our Additions to Tomasz Tunguz’s Seed Fundraising Post

Additional data on Seed venture fund fundraising. Covers capital raised, number of small venture funds and the number of VCs making seed investments.

We are big fans of Tomasz Tunguz’s blog (www.tomtunguz.com) and highly suggest you add it to your required reading list. He just published this post—The Three Most Important Trends in the Seed Fund Raising Market—that looks at data showing an increase in funds under $200 million raised by institutional VCs. Based on the data, he finds an increase in capital being invested by LPs into these funds, growth in fund sizes and an increase in % of VC fundraising; he then draws a line between those trends and the active seed market for the last couple of years. We noticed a few things that made us want to contribute to the conversation.

  1. The data: Shai Goldman has put together a solid list, but research is our secret sauce at PitchBook. We, in fact, have a dedicated research team made up of over a dozen analysts and a number of auto-gathering tools dedicated to gathering and validating private market fund data. So we wanted to see how the trends Tomasz came up with held against our more exhaustive data.
  2. The timeline of Shai’s data (since Jan. 1, 2011): In the analysis we did for our recent VC fundraising report, we noticed this small VC fund trend stretching further back. So we wanted to contribute that look, as well. Click here to download our 2H 2014 VC & PE fundraising & Capital Overhang Report
  3. Opportunity for additional analysis: With our combination of deal and fund data, we thought it would be interesting to see if we could find additional data to back up or disprove some of the conclusions.

Here is an overview of our numbers on institutional VC funds under $200 million globally since Jan. 1, 2005. We found it interesting that most of the funds raised under $200M are actually under $100M, but due to the bigger fund size, more capital actually comes from the funds $100M to $200M. Institutional VCs are defined as independent general partners who primarily make investments from funds raised from outside institutional and high net-worth limited partners.

VC Fund Count sub $200

VC Fund Count sub $200

Here is a look at the total capital raised by these funds globally since Jan. 1, 2005:

Global Sub $200M VC Fundraising

Total capital raised by sub $200 million VC funds globally since 1/1/2005

Here is a look at just U.S. funds since Jan. 1, 2005:

U.S. Sub $200M VC Fundraising

Total capital raised by sub $200 million U.S. based VC funds since 1/1/2005

The longer timeline actually shows a slow and steady decline in capital globally raised by sub $200 million funds. In the U.S., however, we see a very a mixed picture that ends with a very strong 2013 and what is shaping to be a strong 2014. It is also worth noting that a sub $200 million fund in 2007 was likely investing differently than one today, so we don’t feel this data disagrees with Tomasz’s belief that there are more institutional-backed investors actively making seed investments today.

In fact, the number of venture capital firms (excluding corporate VCs, angels, accelerators, etc.) that are making seed investments has been increasing. Below is a chart showing how many VC firms made a seed investment during each year since 2005.

VC Firms Making Seed Investments

Number of venture capital firms making at least one seed investment by year.

PitchBook users – here are the search links: Fundraising Search Seed Investor Search

If you haven’t seen the PitchBook Platform recently (where all of this data and several of the screenshots came from) or are interested in learning how other firms and companies are using PitchBook to invest, advise or sell better, request a demo here.

If you are a writer in need of venture capital or private equity data, we are always happy to help: contact Stephanie Cook at [email protected] or +1 (206) 438-9273.

  • adley-headshot.jpg
    Written by Adley Bowden

    Adley is the VP of market analysis at PitchBook. He wears many hats around here, so on any given day, you may see him working on Product, developing strategic partnerships, working on brand messaging, editing our reports, analyzing our marketing metrics, talking with the media, or writing blog posts. His core responsibilities are centered on building and growing PitchBook through engaging content, compelling campaigns, and the support of internal and external clients. He first joined PitchBook back in 2008, fresh out of college, as a Research Associate. Since then, he has held a number of roles.

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