venture capital funds have raised $9.2 billion over the first nine months of the year, investments in early stage funds are declining, according to numbers released by the Dow Jones today.

That $9.2 billion is a slight increase over the same period last year when 105 firms raised $8.9 billion. But the pension funds, endowments and other limited partners that keep VCs flush with power and cash are voting with their wallets in favor of more diversified funds that invest at multiple stages. That’s where roughly half of the money went so far this year. Capital raised by early stage funds on the other hand fell 12%, with 65 funds raising $3.4 billion. Here’s where it got weird: Funding for later-stage funds skyrocketed up 71% with five funds raising $1.3 billion. Later-stage funds are typically the smallest category, in part because the returns are the least lucrative.

Part of that late-stage rise was skewed by a $750 million close for Institutional Venture Partners. That said, I know of a few name brand investors raising late-stage funds now, so I’m betting we see the percentage of dollars going to late-stage funds continue to strengthen. Secondary and pre-IPO, late-stage rounds have become popular, and so far that game has been dominated by DST and Elevation, at least in the consumer Internet space. With early stage deals getting absurdly competitive, late stage is suddenly looking better for returns. Sure, valuations are high, but at least you’re paying up for a company that’s doing well, rather than paying up because there are too many investors trying to wedge themselves into each Y Combinator deal.

There’s likely little comfort in these numbers for those who feel early stage investing is too crowded. Sure the numbers are down, but there’s still $1.3 billion more coming into the asset class. (Note to Bin 38: You’re going to need a bigger table.)

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Authors: Sarah Lacy

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