TrueBridge Capital Partners recently released a report on the State of the Venture Capital Industry. It covers venture capital firm fundraising, investments, valuations, exits, and returns with a focus on 2014, but also has a lot of historical data.
A couple of charts jumped out at me. The first is the number of active VC firms. As the study chart below shows, there's been a steady decline in the number of VC firms since the Internet bubble of the late 1990's.
Key quote from the report:
... 200 funds invested in five or more deals in 2014, 4% fewer than in 2013 and 83% fewer than in 2001.
Despite the steady decline in the number of funds, the amount of money invested in startups and the number of companies receiving venture capital has consistently increased since the early 2000s.
This is in part due to heavy spending by large VC firms on later stage firms such as Uber and Airbnb. The large funds are able to do this because they are garnering a larger share of industry assets. Key quote:
During 2014, we continued to see fundraising dominated by a handful of large funds, with Accel Partners, Andreessen Horowitz, Founders Fund, Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, Technology Crossover Ventures, Tiger Global Management and Norwest Venture Partners each raising over $1 billion. These firms represent only 4% of the total number of firms that raised capital during the year, but account for 44% of all capital raised.
The venture capital industry has been going through a lot of change over the past decade. We've reported on it's problems in the past, but as this data shows the industry is still healthy.