Oregonstartups.com Blog

According to Venture Beat, VCs raised the fewest funds in Q2 since 1996:

VCs raised 25 funds for a total of $1.7 billion. That’s the smallest amount of money raised in any quarter since 2003, and the lowest number of funds since 1996. It even represents a major decline compared to the first three months of the year, when firms raised $4.6 billion for 49 funds.

And VentureBeat also reported that VCs invested $3.7 billion in startups in Q2 -  $2 billion less than VCs raised.  There have been posts from VCs in the past few months talking about he “Venture Capital Math Problem” (one noteable example is Fred Wilson’s post) basically arguing that there’s more money in the VC system than can be productively used.

Here are the quarterly VC fund raising numbers since Q2 2007 from Thomson Reuters and the National Venture Capital Association:

As Adeo Ressi points out, a large portion of the fund raising in the first half of 2009 was done by new funds, many of them managed by entrepreneurs looking to bring about change, such as Marc Andreesen and Ben Horowitz.  Still, it looks like the market is beginning to adjust to the new VC math, and that could make for an even tougher period of fund raising for start-ups.