Survey: VCs' near-term outlook bleak

Washington state's venture capitalists are in a dark mood. That's the impression left by the latest quarterly VC survey by the Washington Technology Industry Association.

Among the survey's results: venture capitalists expect lower revenue growth for their companies, shrinking deal valuations, a hiring slowdown and few exits in the fourth quarter.

Here's a breakdown of the key findings:

—76 percent of surveyed VCs see national economic conditions as a top challenge for their portfolio companies in fourth quarter, up from 43 percent who thought so for the third quarter.

—Only 13 percent of respondents said they expect revenue growth at their companies to be moderately better, and over one-third anticipate revenue performance to be moderately or substantially worse. That's a big change from Q3, when over half of respondents projected moderate revenue growth for their companies.

—Large percentages of VCs expect deal valuations to decline in Q4. Three-quarters of respondents expect moderately to substantially lower deal valuations for early stage companies, and 88 percent expect valuation declines for mid- and late-stage companies.

—75 percent of respondents expect no hiring growth of Washington state workers in Q4, while just 13 percent expect an increase in hiring of more than 10 percent.

—No IPOs are expected, and 29 percent of VCs expect at least one portfolio company acquisition.

About John Cook

John Cook is co-founder and executive editor of TechFlash. He has been covering the technology beat for nearly a decade, writing about startups, entrepreneurs and venture capital, most recently serving as a reporter/blogger at the Seattle Post-Intelligencer.

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