Venture capital firms are having their biggest fundraising year in a decade, signaling a potentially robust climate for the high-valuation private companies known as "unicorns."
U.S.-based VC firms collected $12 billion in the first quarter, a 59 percent increase from the same period a year ago and the biggest raise since the second quarter of 2006, which saw $14.3 billion, according to numbers from Thomson Reuters and the National Venture Capital Association.
"As witnessed over the last year, the fundraising environment for venture capital continues to improve," Bobby Franklin, president and CEO of NVCA, said in a statement. "That's welcome news for venture capital as an industry but even better for American entrepreneurs who will put that capital to work growing their businesses, hiring workers and driving innovation,"
However, the surge came even as the number of funds raised fell 19 percent.
That combination of more money for fewer funds represents a concentration of cash that is moving not so much to companies straight out of the gate, but rather to firms whose valuation is increasing and heading into unicorn territory, generally considered to be in excess of $1 billion.
"A lot of the dollars are going to large funds that basically wait until some of the risk is taken out of the start-up. They then invest a much bigger chunk of dough in the later stages," Mark Walsh, head of investment and innovation at the U.S. Small Business Administration, told CNBC.com. "The rise of the unicorns is exemplary of that."
In addition to representing a big jump over the year-ago total, the VC cash flow was stronger than the past two quarters combined.