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Alternative Market Briefing

Micro venture capital funds are set to beat the 2018 record in the U.S.

Monday, November 18, 2019

Laxman Pai, Opalesque Asia:

US-based micro venture capital funds (sized at $100mn or less) had a record year in 2018, raising $7.8bn across 316 vehicles, a record that may well be broken this year, said a study.

According to Preqin, with $6.1bn raised in the first three quarters of 2019, micro venture capital fund managers have already secured 78% of the total capital raised in the whole of 2018.

The study revealed that since January 2019, early-stage micro venture capital funds have collected 51% of aggregate micro venture capital, raising $3.1bn across 89 funds and outpacing the $1.9bn secured by the 81 general venture capital funds that have closed this year.

Women-owned firms prioritize early-stage venture capital investment

In the venture capital industry overall, Preqin data shows that women-owned firms prioritize early-stage venture capital investment. And in the micro fund space, this trend holds true.

The gap between capital raised by women-led early-stage micro venture capital funds ($1.6bn) and women-led general micro venture capital funds ($689mn) in the past decade is at almost $1bn.

And this trend is only more evident so far in 2019, where 82% of capital raised by women-led venture capital firms was for seed or early-stage funds.

Although 2018 was a record year for micro venture capital fundraising, most funds failed to reach their target and achieved an average of 96% - the smallest proportion since 2014 (Fig. 18).

So far t......................

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