Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – Venture capital fund raising fell sharply in the second quarter to a level not seen since 2003 in the second quarter of this year.

A meager $1.9 billion was raised by 38 funds, the and Thomson Reuters reported Monday.

The total is a 49 percent drop from the first quarter of this year.

And the future doesn’t look much better, according to NVCA President Mark Heesen.

“Ongoing economic uncertainty has kept many limited partners and venture capital firms
on the fundraising sidelines in 2010 and this hesitation is likely to continue for the
remainder of the year,” Heesen said.

“Recent positive activity in the exit market , particularly on the M&A side, could generate some meaningful cash distributions which would pave the way for firms looking a receptive investor base. However, the pipeline of venture firms that are poised to raise their next fund continues to grow and could result in a crowded market in 2011 and beyond.”

So far in 2010, venture funds have raised $5.65 billion.

The NVCA-Thomson Reuters data differs from totals released last week by Dow Jones. Venture capital funds the first six months of this year, an increase of 13 percent over the first half of 2009, according to data compiled from Dow Jones LP Source.

A year ago, VCs raised $15.8 billion, which was down sharply from $28.5 billion in 2008 and $36.2 billion in 2007.

The lowest most recent quarter for fund raising was $2.3 billion in the third quarter of last year.

Twelve new funds closed in the second quarter, the largest being $150 million generated by Olympus Capital Partners Fund 1 in Menlo Park, Calif.

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