Venture Funds Have $68 Billion to Invest

U.S. venture capital funds have an estimated $68 billion of unspent commitments, an amount that could sustain about four years of investing, according to a survey by San Francisco-based research firm VentureOne.

Venture capital firms are spending about $17 billion a year on new investments, said John Gabbert, vice president of worldwide research at VentureOne, which surveyed about 1,000 investors in funds raised since 1997. Much of the unspent capital was collected since 2000, the firm said.

“There is still a lot of money,” Gabbert said. The availability of capital may lead investors to pay too much for stakes initially, making it harder to realize profits later, he said.

Much of the cash is being earmarked to sustain existing investments, the survey said.

The survey also found that venture capital funds raised before 2000 have spent almost all their capital commitments.

One-quarter of the record $83.3 billion collected in 2000, or $20.8 billion, hasn’t been invested. About 56% of the amount that remains in those funds is being allocated for the needs of existing companies, according to the survey.