Venture fund raising soared 67 percent in 2004, with firms bringing in more than the previous two years combined.

Some 170 funds raised $17.6 billion, up from $10.6 billion in 2003 and $3.7 billion in 2002, according to newly released statistics from Thomson Venture Economics and the National Venture Capital Association.

Fund raising was especially strong in the fourth quarter as a surging stock market and the continued economic recovery encouraged investors to put $6 billion into 50 funds, the best quarter of the year.

Early and seed funds raised $9.2 billion for the year, with $4.2 billion alone being raised by 31 funds in the final quarter.

The fund raising reflected venture capitalists’ return to more aggressive funding of new and existing clients. VC investments hit $21 billion in 2004, the first increase since 2001.

Some 45 new funds were launched in 2004, them same as in 2003 but below the 2002 total of 57, the 106 in 2001 and the 245 in 2000.

Follow-on deals for existing funds made up 78 percent of all money raised, the report said.

Funds are also expected to be raised in coming months, too, said Mark Heesen, president of the National Venture Capital Association.

“We expect the quarterly increases in venture capital commitments to continue into the first half of 2005,” Heesen said. “Many established firms are still out there fundraising successfully.”

Quarterly fund raising for 2004 broke down this year:

Quarter, Funds, Amount raised

Q1, 48, $2.65B

Q2, 53, $3.14B

Q3, 52, $5.83B

Q4, 50, $6.03B

Buyout and mezzanine funds also had a strong year, raising $45.79 billion for use is mezzanine, turnarounds, leveraged buyouts, recapitalizations and other uses.

That amount compares to $29.6 billion in 2003 and $26.6 billion in 2002. It is the highest since $76,7 billion was raised in 2000.

NVCA: www.nvca.org