How Confident Are Global Venture Capitalists? NVCA Deloitte Global Venture Capital Report (2015)
The Global Venture Capital Confidence Survey is an annual survey of venture capital, private equity and growth equity investors around the world. The survey covers: investor confidence in global investing, fund-raising, IPOs, and government policy; changing views on the global economy, from a couple of years ago to today and looking ahead; and sectors and sub-sectors that are prime for investment.
Results are in from the 2015 Global Venture Capital Confidence Survey from Deloitte and the National Venture Capital Association (NVCA):
– Immigration reform is top of mind for U.S. investors with nearly two-thirds of respondents considering it a priority.
– Investor outlook remains bullish for the IPO market, rising for the fourth year in a row.
– Venture capital momentum increases with a 10% jump in the number of funds raised.
– U.S. technology hubs, Israel and Canada dominate while confidence continues to fall in Brazil and other emerging markets.
– Cloud computing is the strongest technology investment sector for the third year in a row.
The eleventh annual survey, conducted in May and June of 2015, gauged confidence levels of more than 200 venture capital, private equity, and growth equity investors in the Americas, Europe, Asia, and Africa, assessing investor confidence on the global venture capital environment, market factors shaping industries and investments in specific geographies and industry sectors.
“Despite a hot IPO market and the proliferation of appealing investment opportunities across industries, this data shows that investors believe that the government needs to do more to ensure they can fully capitalize on the prospects ahead,” said Jim Atwell, national managing partner of the Emerging Growth Company practice, Deloitte & Touche LLP. “Technology continues to generate a great deal of excitement on a global level, especially with today’s optimal market conditions and despite the widening gap in governmental support.”
“As the global hub of innovation, there is much for U.S. venture investors to feel excited about. The fundraising environment continues to improve, the IPO market is gaining strength and there is no shortage of innovative, game-changing startup companies to take to the next level,” said Bobby Franklin, president and CEO of NVCA. “Yet in spite of all there is to be confident about, U.S. venture investors continue to believe U.S. policymakers aren’t doing enough to enact policies that help strengthen the innovation ecosystem. If policymakers were to proceed with some of the most challenging issues of our time, there’s no telling what we could achieve.”
This report was sponsored by Deloitte & Touche LLP and was conducted in association with the National Venture Capital Association in the United States and numerous other venture capital associations around the world.
According to the survey, investors are not confident the U.S. government can enact policies to grow venture capital endeavors and investments over the next 12 months. Legal immigration reform topped the list, with over 60% of U.S. investors saying they would like the government to address this area over the next year. Outside the U.S., about 50% of investors would like leaders to target tax incentives and tax credits.
According to the survey, U.S. and global venture capitalists are optimistic when it comes to investing in emerging technologies. Cloud computing was named the strongest technology investment sector for the third year, followed by mobile and the Internet of Things.
“Technology continues to generate a great deal of excitement on a global level, especially with today’s optimal market conditions and despite the widening gap in governmental support,” said Franklin.
The 2015 Global Venture Capital Confidence Survey was conducted jointly by Deloitte & Touche LLP and the National Venture Capital Association (NVCA). It was administered to venture capitalists in the following regions: the Americas, Europe, Middle East, and Asia Pacific.
– Deloitte received 208 responses from general partners with assets under management ranging from less than $50 million to greater than $10 billion. Multiple responses from the same firm were encouraged as the survey was a general measurement of the state of global investing from general partners and not attitudes of specific firms.
– Confidence levels were measured on a scale of 1-to-5, with a score of 5 representing the most confidence.
– Confidence levels between 4.0+ are considered very positive, 3.5–3.99 is considered positive, 2.5–3.49 is neutral and below 2.49 is negative.
– The survey was conducted during May and June of 2015.
Venture capitalists are committed to funding America’s most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive US job creation and economic growth. As the voice of the US venture capital community, the National Venture Capital Association empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community’s preeminent trade association, NVCA serves as the definitive resource for venture capital data and unites its 400 plus members through a full range of professional services.
About Deloitte’s Emerging Growth Company (EGC) Practice
Deloitte’s emerging growth company practice works with innovative high-growth companies on their way to becoming the next generation of market leaders. Through our multidisciplinary approach focused on quality, our team of dedicated professionals understands the challenges that venture capital-backed companies face and offers a broad perspective on emerging issues, leading practices and industry trends. Our extensive IPO experience, across all industries, along with our experienced professionals, enables us to deliver insights that others may have missed. The practice is also home to Tech Venture Centers (TVC) in Waltham, Massachusetts and McLean, Virginia. The Centers are designed to create communities of leading service providers, addressing the needs of emerging, high-growth IPO bound companies and the venture capital community.
SOURCE: NVCA, Deloitte, Fox News