From The Ground Up

Fwd: Engineering, startups and life

A Slow VC Recovery Of Sorts, And Growth Overseas

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VC funding increased 13% from $6.6 billion during the first half of 2009 to $7.5 billion in the same period 2010, according to a report released by Dow Jones LP Source, a database that tracks PE fund-raising.

Early-stage funds showed the most growth in the same y/y period, jumping 19% to 49 funds accounting for $3.0 billion in fund-raising. Multi-stage funds led in terms of dollars fund-raised, increasing 15% to $4.0 billion.

These numbers support the observations that the number of small startups is increasing. Many an essay have been posted to the blogosphere prognosticating the demise of seed/early-stage funds, and others have rebutted. Nonetheless, LPs and funds alike are looking to shift strategies scrambling to bear fruit from the “renewed interest in smaller venture funds”.

Buried beneath all this data may be the most striking fact of all. The biggest closing was by Sequoia Capital’s Sequoia China Foreign Currency Fund III, an early-stage fund which closed a whopping $1.0 billion alone. Sequoia clearly sees growth and opportunity in continuing its expansion into China.

The US must become better at churning out intelligent scientists, engineers, and entrepreneurs in order to keep up with the two Asian powerhouses. For decades, students and business-minded individuals have moved state-side seeking education, employment and opportunities. In the very near future, opportunities will abound in their homelands and there will be no reason to bring their talent and work-ethic to US soil. Sequoia has positioned itself to take advantage of this burgeoning shift in the global market.

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Written by Girish Rao

July 9, 2010 at 06:09

Posted in Uncategorized

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