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.
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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.
The move comes as investors search for other avenues to make money now that returns in the U.S. equity market have dried up. Start-ups have benefited in particular, with the rate of new business creation reaching its highest level in two decades, according to the Kauffman Index, which measures start-up activity.
Large sums also have gone to private equity, where secondary vehicles saw their best open quarter in four years to start 2016, according to Preqin, which tracks the alternative asset industry.
Walsh said much of the new VC money is in search of bigger, rather than more, deals.
While always on the lookout for ground-floor start-ups that will explode like Facebook, Instagram or Uber, fund managers have grown increasingly content with waiting for hot new companies to mature, even if it means a somewhat lower return on investment.
"More dollars does not necessarily mean more start-up dollars," Walsh said. "It means maybe more dollars for companies that are past start-up and the risk has been removed."
While he believes "there are too many unicorns," Walsh said he does not believe there is a VC bubble.
The venture cash surge is not unique to the U.S.
Globally, VC deals totaled $34 billion in the first quarter, a 26 percent increase over the previous three months and a 13 percent rise from the same period in 2015, according to Preqin. China and India have been particular hot spots, respectively posting quarterly value increases of 51 percent and 47 percent.
"With the number of deals also increasing, 2016 will be another landmark year for the industry if this level of activity continues," Felice Egidio, head of venture capital products for Preqin, said in a statement.
