paidContent.org - Survey: Confidence Among VCs In The Valley Is Finally Edging Back Up

Discussion Policy

Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.

Joseph Tartakoff

paidContent.org
Wednesday, April 8, 2009; 4:07 PM

The IPO market has been dry for months, M&A activity is way down, and VC firms say they have less money to dole out. What does that add up to? Well, apparently, confidence among the VCs in the Valley is on the upswing again. The University of San Francisco reports that its Silicon Valley Venture Capitalist Confidence Index is up after a six-quarter streak of declines. It rose to 3.03 (on a scale of 5) during the first quarter of the year, up from a five-year low of 2.77 last quarter. The survey asks VCs to gauge the "high-growth venture-entrepreneurial environment" in the Bay Area over the next six to 18 months.

Before you get too excited: The confidence levels are just about where they were in the middle of last year. Still, the University of San Francisco's Mark Cannice writes that, "While concern over the state of the national and global economy and financial system remains, a sense of foreboding appears to be giving way to an expectation of eventual, if slow, recovery in the high-growth venture environment." Cannice attributes the change in sentiment?which he calls a "mustard seed of hope"?to some stabilization in the financial system as well as "more modest expectations for growth and valuations." Cannice notes that when the index first plummeted during the fourth quarter of 2007, the exit market closed up shortly afterwards. Remains to be seen whether the IPO market will recover just as soon. The National Venture Capital Association, which reported last week the grim news that for the second quarter in a row there were no venture-backed IPOs, is not expecting a quick bounceback.

Jordan, Edmiston: Digital Media M&A Down Slightly As Percentage Of Overall Media Deals

No Surprise: VCs Say It Will Be Tough To Get Early Stage Funding In 2009