There’s been a lot of chatter about the venture capital model being broken. But that’s not stopping the money spigots from flowing.

According to a report out today, venture capital firms in the U.S. raised $17.5 billion during the first three quarters of the year, a 38 percent increase over the same period last year and equalling the total of all of 2011. The report, conducted by Dow Jones LP Source, found that 120 U.S. venture funds raised $17.5 billion during the first three quarters.

Early-stage venture capital funds accounted for $4.5 billion, which compared to $2.3 billion during the same period of last year.

In the Seattle area, Madrona Venture Group raised a $300 million early-stage fund in  June, the largest in its history. Other firms, including Voyager Capital, Divergent Ventures, Ignition Partners and Frazier Healthcare Ventures, also are on the fundraising path.

The biggest fund raised during the third quarter was was Sequoia Capital’s U.S. Growth Fund V LP, a $950 million late-stage venture fund.

“U.S. private equity firms have worked hard to return capital to their investors over the past two years and that’s given investors both additional capacity and confidence to fund new commitments,” said Laura Kreutzer, managing editor of Dow Jones Private Equity Analyst. “Although it’s far from easy to raise capital today, more private equity firms have the wind at their backs than did even a year or two ago.”

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