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Venture Capitalists’ Fundraising Surges

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From Associated Press

Emboldened by a recent market upturn, venture capitalists ended 2004 with their biggest fundraising quarter in 3 1/2 years -- a resurgence likely to raise concerns about whether the industry is setting itself up for another mortifying fall.

Venture capitalists raised $6 billion during the three months that ended in December, the busiest period since the second quarter of 2001, when the industry collected $10.2 billion from its investment partners, according to data released Monday by Thomson Venture Economics and the National Venture Capital Assn.

The level of money pouring into venture capital funds rose progressively higher in each quarter of 2004, propelling the total for the year to $17.6 billion -- more than the industry raised in 2002 and 2003 combined.

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Those two years reflected a sobering decline for venture capitalists, who spent little time raising more money because they were too busy dealing with the massive problems caused by the dot-com bust.

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