Global trends in venture capital: 2009 reportNew strategies for new economic conditions |
Are venture capitalists battling the global recession blues or feeling optimistic about the new opportunities for investing in technology? We wanted to know the answers to this question, as well as what is on the minds of venture capitalists around the world as they plan their future investment moves. The economic downturn is the financial story of the year, so it was the obvious choice as the theme of the Deloitte Touche Tohmatsu (DTT) Technology, Media & Telecommunications (TMT) industry group’s 2009 global venture capital survey.
This year, we obviously hit a nerve; we received 725 responses—almost double the number compared to last year. The respondents are general partners of venture capital firms with assets under management ranging from less than US$100 million to greater than US$1 billion.
The responses of venture capitalists around the world were illuminating. And the good news is that you will find that while the investment community is coming to grips with the hard realities of this global recession, they remain a resilient group and even an optimistic one. You’ll learn which sectors they believe offer prime opportunities and what countries are the most intriguing to them. It’s been a tough season for investors and entrepreneurs alike but that may have strengthened the industry. As Mark Heesen, president of the National Venture Capital Association (NVCA), said, “The tourists have left.”
When we conducted our first global venture capital (VC) survey five years ago, the community was recovering from the tech bubble bursting and was just beginning to see significant movement toward globalization of the venture capital industry. Certainly, today’s economic environment is dramatically different.
“It’s been a difficult recession but the industry is coping and making adjustments,” said Mark Jensen, national managing partner of Deloitte’s Venture Capital Services. “They’re moving forward and not sitting on their hands waiting for something to happen.”
What VCs are re-evaluating is the stage in which they’re investing. Very few are shifting to early-stage investing. Instead, about half are maintaining their current strategy and a significant percentage are shifting their focus to later-stage and existing portfolio companies. “In this environment, it pays to be either a very early-stage investor or a very late-stage investor,” said Steve Fredrick, general partner of Grotech Ventures.
The findings uncovered that globalization of the venture capital industry will intensify in coming years, posing significant competitive questions for the United States, and opportunities for emerging markets such as China. Additional findings include:
- The clean tech sector is poised to become the leading investment category.
- levels are more likely to increase in countries outside the U.S. Governments of all countries have a crucial role to play in fostering competitiveness and innovation.
- Just over half of VCs surveyed remain optimistic that it is a terrific time to invest in promising entrepreneurial companies.
Learn more about the findings by downloading the full report below.
The survey was sponsored by the Global DTT TMT industry group and conducted in association with the following venture capital associations:
- Brazilian Association of Private Equity & Venture Capital (ABVCAP)
- British Venture Capital Association (BVCA)
- Canada’s Venture Capital & Private Equity Association (CVCA)
- European Private Equity & Venture Capital Association (EVCA)
- Emerging Markets Private Equity Association (EMPEA)
- Indian Venture Capital Association (IVCA)
- Israel Venture Association (IVA)
- Latin American Venture Capital Association (LAVCA)
- Malaysian Venture Capital and Private Equity Association (MVCA)
- National Venture Capital Association (NVCA)
- Singapore Venture Capital & Private Equity Association (SVCA)
- Taiwan Private Equity & Venture Capital Association (TVCA)
- Zero2IPO Capital
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Global trends in venture capital
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