Silicon Valley Venture Capitalists` Confidence Holds Steady in Q3

USF Report Reveals Insights From VC Community
SAN FRANCISCO--(Business Wire)--
The Silicon Valley Venture Capitalist Confidence Index for the third quarter of
2009 registered 3.37 on a 5-point scale, holding exactly constant from the
previous quarter`s reading of 3.37. The new Q3 reading indicates a leveling off
of venture capitalists` confidence in the future high-growth entrepreneurial
environment in the Bay Area after rising the previous two consecutive quarters
following a five-year low in confidence in Q4 2008. Authored by Mark Cannice,
associate professor at the University of San Francisco (USF) School of Business
and Professional Studies, this quarterly VC Index (Bloomberg ticker symbol:
USFSVVCI) is based on an October 2009 survey of 35 Silicon Valley venture
capitalists.

"The predominant sentiment was cautious optimism that the worst of the financial
crisis and economic decline was behind us and it is time to put investment
capital to work in at least some of the many attractive new ventures that are
seeking funds,"explained Dr. Cannice. For example, Debra Beresini of invencor
shared, "I am cautiously optimistic that the worst is over - now we have to
build confidence…" In addition, Joe Mandato of De Novo Ventures indicated, "From
a virtual standstill, we have seen glimmers of light and more deals are getting
done." Dag Syrrist of Vision Capital argued that "…venture investors are
reaching the point where doing nothing is no longer OK."

Cannice acknowledged that the IPO market is still quite slow. Shomit Ghose of
Onset Ventures reasoned, "For private equity, the exit market still feels a
little like the Eagles` Hotel California: you can check in any time you like,
but you can never leave…" However, Cannice projected that the recent dramatic
rise in the price of public market equities has increased the value of the stock
currency of many potential acquirers of private tech firms, thus making exits
for venture-backed firms through acquisition more likely in the coming quarters.
Deepak Kamra of Canaan Partners confirmed, "The exit environment has improved
for both IPO`s and M&A`s and the performance of our portfolio companies is
steadily improving." Jeb Miller of JAFCO Ventures indicated the same sentiment
with, "…the exit environment is showing signs of promise."

The complete Q3 2009 report is available at www.Cannice.net.

University of San Francisco
Anne-Marie Devine, 415-422-2697
abdevine@usfca.edu

Copyright Business Wire 2009