By WRAL Tech Wire

NEW YORK, N.Y. – The National Venture Capital Association (NVCA) and Tompson Reuters reported Monday that $2.7 billion in venture funding was raised in this year’s second quarter, marking a 16-year low.

Thirty-seven U.S. venture capital funds raised $2.7 billion in the second quarter of 2011.This level marks a 28 percent increase by dollar commitments, but a 23 percent decline by number of funds compared to the second quarter of 2010, which saw 48 funds raise $2.1 billion during the period.

U.S. venture capital fundraising during the first half of 2011 totaled $10.2 billion from 76 funds, a 67 percent increase by dollars compared to the first half of 2010 but a 15 percent decrease by number of funds, marking the lowest number of funds garnering commitments since the first half of 1995.

“The fact that the number of firms raising money successfully remains at such low levels confirms an ongoing contraction of the venture capital industry, which will serve well those funds that can obtain commitments – but that group is becoming more and more narrow,” said Mark Heesen, president of the NVCA.

Heesen added that while a smaller venture industry will intuitively produce higher returns, it is critical that the mix of funds remain geographically diverse and cover a broad base of industries to contribute to economic growth and innovation at the levels we have historically.

“For that reason,” he said, “we would like to see more funds raise money in the second half of the year.”

Second quarter 2011 venture capital fundraising was bolstered by two fund commitments from Palo Alto-based Accel Partners, which accounted for 50 percent of this quarter’s fund-raising total. Accel Growth Fund II, L.P. raised $875 million during the quarter, while Accel XI, L.P. raised $475 million.

The Thomson Reuters/NVCA sample includes U.S.-based venture capital funds. Classifications are based on the headquarter location of the fund, not the location of venture capital firm.

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