Latest WTIA Survey Shows Increased Optimism Among Washington State Venture Capitalists

Latest WTIA Survey Shows Increased Optimism Among Washington State Venture
Capitalists

Local investors expect upturn in portfolio company revenue and employment.

SEATTLE, April 20 /PRNewswire-USNewswire/ -- After several consecutive
quarters of negative predictions, the Washington state venture capital (VC)
community is more optimistic about the quarter ahead, according to the Q2 2009
Venture Capital Outlook Survey from the Washington Technology Industry
Association (WTIA). In the latest WTIA survey, participants were notably more
positive about revenue growth, new and follow-on investments and employment.

The survey queries top local VC firms about indicators for the coming quarter
and covers topics such as deal quality, deal quantity, expected exits and
various business metrics for their portfolio companies. Results are compared
to previous quarters. Key highlights from the Q2 09 survey, which is sponsored
by Ernst & Young, include:

-- Better revenue growth on the horizon: Forty-four percent of
participants
predicted moderately better revenue growth for their portfolio
companies
in the coming quarter (up from 22 percent in Q1 09 and 13 percent in
Q4
08). Additionally, the survey found a 27-percent decrease in the
number
of respondents predicting moderately worse growth versus Q1 09.
-- Outlook optimistic regarding new and follow-on investments:
Seventy-one
percent of participants plan on making one or two new Washington state
investments this quarter, up from 56 percent last quarter and only 50
percent in Q4 08. Expectations for follow-on investments are also
slightly up, with 86 percent of respondents predicting one or two
follow-on investments and 14 percent predicting three, four or five.

-- Layoffs expected to decrease sharply: Fourteen percent of participants
predicted a more than 10-percent workforce reduction among their
portfolio companies, versus a significantly higher 44 percent in Q1
09.

Although the outlook for Q2 09 is noticeably more positive than past quarters,
respondents still identified some areas that have yet to rebound:

-- Deal flow predictions show no significant change: Predictions for
better
deal flow remain similar to Q1 09. However, predictions for lower deal
flow show a steady decline.
-- Expectations for deal valuations still low: Although the majority of
respondents (71 percent) expect moderately or substantially lower deal
valuations across all investment stages, predictions for Q2 09 were
more
optimistic than previous quarters.

-- No IPOs are expected in Q2 09, and 14 percent of respondents predict
at
least one portfolio company acquisition (down from approximately 33
percent last quarter).

A more detailed summary as well as the full results of the survey are
available on the WTIA's Web site: http://www.washingtontechnology.org.

About the Washington Technology Industry Association
The Washington Technology Industry Association, founded in 1984, is the
largest statewide association of technology companies, IT departments and
individual technology professionals in North America. With more than 1,000
member companies representing more than 100,000 employees in Washington State,
the association is a catalyst for sharing expertise, fostering collaboration,
delivering key business services and advancing the value and global impact of
technology companies doing business in Washington. The association's global
partners are Davis Wright Tremaine LLP, Microsoft, Regence BlueShield, Sun
Microsystems, Vertafore and Wells Fargo Insurance Services. The association's
funding partners are AH&T Insurance, F5 Networks, GrapeCity, Moss Adams and
RealNetworks. For more information, go to www.washingtontechnology.org.

SOURCE Washington Technology Industry Association (WTIA)

Katie James of Sterling Communications for WTIA, +1-206-388-5758,
kjames@sterlingpr.com