Venture Capital Firms Boost Fundraising, Investing in Third Quarter

U.S. venture capital firms raised $5.91 billion in the third quarter, up 16% from a year earlier, as the firms increased their pace of investment by 13%, according to a survey released Wednesday.

Venture capital firms invested $5.49 billion in emerging companies in the third quarter, for the first year-to-year increase in 2005, according to VentureOne, a research firm in San Francisco.

The money raised by the firms last quarter went into 27 new funds, including $500 million raised by Illinois-based Wind Point Partners and $520 million collected by Menlo Park, Calif.-based Sequoia Capital.

Last quarter’s new funds are larger than the year-earlier period’s new funds, the survey said.

In the third quarter of 2004, there were 26 new funds.

More than 30% of the funds closed this year gathered $250 million to $499 million of pledges, compared with 20% last year, the survey showed. Five percent were $500 million to $999 million, the most since 2001, VentureOne said.