USF Report Indicates Lowest VC Sentiment in 4+ Years
SAN FRANCISCO--(Business Wire)--
The Silicon Valley Venture Capitalist Confidence Index for the
first quarter of 2008 registered 3.22 on a 5 point scale, falling from
the previous quarter's reading of 3.54 to a second consecutive new low
in the 4+ year history of the Index. It indicates a continuing steep
downtrend in venture capitalists' confidence and portends a more
difficult entrepreneurial environment in the Bay Area in the coming
months. Authored by Professor Mark Cannice of the University of San
Francisco School of Business and Management, the current quarterly VC
Index (Bloomberg ticker symbol: USFSVVCI) reading is based on an April
2008 survey of 32 San Francisco Bay Area venture capitalists.
"VC concern emphasized the broadening impact of the credit crisis
and general financial market volatility which has caused a drought in
venture-backed exits," said Dr. Cannice. For example, Eric Buatois of
Sofinnova Ventures, indicated "we continue to see good deal flow with
innovative entrepreneurs, but the shut down of the IPO window will
make investors a bit more cautious." Deepak Kamra of Canaan Partners
also noted that the exit scenario is bleak. However, Cannice observed,
"Investors in early stage companies, such as Ron Conway of Baseline
Ventures and Colin Weil of the Keiretsu Forum, held a generally higher
level of confidence. And some other venture investors held out hope
for an uptick in exit alternatives by 2009."
In a separate report by Mark Cannice and Ling Ding, the China
Venture Capitalist Confidence Index (Bloomberg ticker symbol: CVCCI)
for the 1st quarter fell to a new low in the three year history of
that Index, coming in at 3.53 on a 5 point scale. Cannice and Ding
indicated that Chinese VC confidence fell on concerns of declining
Chinese stock markets, a slowing pace of exits, soaring commodity
prices, and the impact of the US sub-prime credit crisis on
international markets.
In authoring the two quarterly VC indexes, Dr. Cannice sees
converging trends of VC sentiment in the US and China as macro
economic conditions increasingly span national boundaries and cross
border venture money flows link investment expectations. The complete
VC Index Reports for Q1 will be available at
www.EntrepreneurshipProgram.org (click on the publications tab).
University of San Francisco
Anne-Marie Devine, 415-422-2697
abdevine@usfca.edu
Copyright Business Wire 2008
