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Editor’s note: This is the second article in a series by Redpoint Ventures principal Tom Tunguz examining trends in the public and private technology markets. He recently discussed four trends in the public technology markets. Today, he compares the current state of the US venture capital to historical norms. First, we will examine the inflows into the venture capital market: dollars raised by venture capitalists. Then we will explore the outflows, VCs’ investment pace, contrasting the dollars deployed over time. Last, we will investigate market sentiment and consequent price fluctuations. The venture capital industry is in the midst of a contraction. Since 2001, limited partners have invested a median of $22B each year in venture capital. Over the last 3 years, those figures have dropped by 50% to $16B annually. There are fewer firms investing less money from smaller funds in 2011 than on average over the past 12 years. In 2011, 182 venture firms raised funds, about 16% below the 1...

Rip Empson is a writer and rabble-rouser at TechCrunch. He covers startups, music, social, mobile, health, and education. You can reach him at rip[at]techcrunch[dot]com ? Learn More August Capital, the 17-year-old Sand Hill venture capital firm, is raising a new $550 million investment fund, according to documents filed this morning with the SEC. August Partner Howard Hartenbaum has since confirmed the firm’s raise, which is its sixth fund to date. It closed its previous, $650 million fund in March of 2009. The firm’s new raise consists of two funds: Its core fund, which the firm will use to continue investing in early-stage companies and its $250 million “Special Opportunities Fund,” which August will use for opportunistic investments, growth equity, some buyout — a mixed bag of investment types at the other end of the growth spectrum. A potpourri, if you will. All in all, don’t expect any drastic changes in style with August’s sixth fund — the firm isn’t suddenly going to take to v...

Editor’s Note:  This is Redpoint VC’s Tomasz Tunguz’ second article in a series examining trends in the public and private technology markets. Last week, we discussed four trends in the public technology markets. Today we compare the current state of the US venture capital to historical norms. First, we will examine the inflows into the venture capital market: dollars raised by venture capitalists. Then we will explore the outflows, VCs’ investment pace, contrasting the dollars deployed over time. Last, we will investigate market sentiment and consequent price fluctuations. The venture capital industry is in the midst of a contraction. Since 2001, limited partners have invested a median of $22B each year in venture capital. Over the last 3 years, those figures have dropped by 50% to $16B annually. There are fewer firms investing less money from smaller funds in 2011 than on average over the past 12 years. In 2011, 182 venture firms raised funds, about 16% below the 12 year median. The...