2012 was a spectacular year for fundraising by venture capital firms. According to the National Venture Capital Association (NVCA), firms raised nearly $21 billion, a significant increase over the $13.7 billion raised in 2010. Mark Heesen, president of the NVCA, believes that the industry has reached an optimal size for deploying capital and achieving returns by staying at or near the $25 billion level.
The structure of the industry, however, has changed, taking on a barbell-like structure. At one end of the spectrum you have very large, established venture capital firms that invest in companies across all stages and industries. At the other end, you have small funds focused on specific regions, industries and stages. The new growth of firms is occurring in the latter end of the spectrum.
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