There's good news and bad news on the venture capital front.

The good news was that New Enterprise Associates, a 28-year veteran of the venture capital industry and a backer of companies such as 3Com ( COMS), Juniper Networks ( JNPR) and ( CRM), has raised a $2.5 billion fund -- the second-largest fund in U.S. venture capital history.

The bad news is that New Enterprise, which still owns about a one-fifth stake of Vonage ( VG) after that company's dismal IPO, has raised this $2.5 billion in a market that for years has provided VC funds with few golden exit opportunities.

With more than 40 partners in Menlo Park, Calif., Reston, Va., and Baltimore, New Enterprise has one of the best track records in venture capital. NEA tends to raise large amounts of money because, unlike firms specializing in only seed or early-round investments, it often makes substantial investments as a company is ready to be acquired or go public. About 150 NEA-backed companies have gone public, and 200 have been acquired or merged.

But as Vonage has shown -- its stock is down 56% since its May offering -- even the most respected venture shops are having a hard time cashing in on their investments. The 29.1 million shares that Vonage's prospectus said NEA owned at the time of the offering were worth $496 million then; they have now dwindled to $216 million.

And yet New Enterprise is having no problem raising money to shepherd start-ups into an IPO market that seems to have little appetite for them. Nor is it alone. In June, Oak Investment Partners reportedly raised a $2.56 billion fund with a track record that wasn't quite as strong as NEA's.

Last week, the National Venture Capital Association said that the total amount raised in venture-backed IPOs and merger/acquisitions was $11.2 billion -- above the $10.6 billion raised in the first half of 2005. Only $2.5 billion of that, or less than a quarter of the total, was raised in the IPO market.

"The growth in IPO volume is encouraging, but we certainly are not out of the woods yet," Mark Heesen, NVCA president, said in a statement accompanying the first-half figures. "We not only need to see more companies going public, but more companies going public successfully if we expect others to follow suit."

By far, the bulk of the money raised from venture-backed startups came from acquisitions made by other companies. But a sluggish IPO environment can also hurt the valuation a start-up might get in the M&A market. The better companies, such as ( BIDU) and iRobot ( IRBT), are making it public and faring pretty well afterward. If a company tries to file for an IPO and backs off, it sends a message to private investors that it's damaged goods -- not ready for the big time.

But for all the trouble that venture funds are having selling off the carefully cultivated holdings in their portfolios, they are having startlingly little trouble when it comes to raising money from endowments, companies and pension funds.

Some VCs have been forced to repeatedly turn away good money from investors eager to boost their private-equity holdings. But for those who yield to temptation, it can cause problems years later if a VC fund hasn't found enough good startups to finance or -- even worse -- when the fund fails to pay the returns that were expected of them.

That was a peril that investors have faced with Oak Technology. According to Silicon Beat, a blog from The San Jose Mercury News, Oak has shown "recent poor performance." Oak, which was a top-performing fund in the 1990s, has recently raised larger and larger funds with more and more mixed results.

Most venture firms guard the data on the performance of their funds, but some who invest in them, such as public pension funds, offer a peek. The state of Washington invested $20 million in a 1998 fund set up by Oak and received a return of $16 million, Silicon Beat said. But it has lost $30 million of the $57 million it invested in a 1999 fund, and a 2000 fund is breaking even.

Overall, the amount that venture funds has been investing in start-ups has been roughly equal with the money they have been raising from cashing in on investments. Venture capital firms invested $22.1 billion in 2005, but they raised $20.1 billion from liquidity events. In 2004, they invested about $21 million and pulled out $26.4 billion.

Venture firms make their investments over several years, so comparing inflows and outflows in a single year is no more than a rough approximation. But it does suggest that funds in general are having trouble cashing out their portfolio holdings to ensure that they deliver a handsome return.

And yet, two big funds have raised more than $5 billion in less than a month. That's almost equal to the $6 billion that all venture funds invested in start-ups during the first three months of 2006, according to VentureOne.

Some VCs have complained that there is too much money chasing too few deals. Unless the past few months are an aberration, the numbers are starting to back them up.