Flickr photo via Stage88

Despite the severe downturn in the economy, venture capitalists are turning slightly more optimistic. That's the key finding of the Washington Technology Industry Association's quarterly Venture Capital Outlook Survey. The VCs are predicting decreases in layoffs as well as better revenue growth for portfolio companies.

Forty-four percent of those surveyed said that they expect moderately better revenue growth in the second quarter, which compares to just 22 percent who responded that way last quarter. Meanwhile, 71 percent of respondents said they plan to make one or two new investments this quarter, up from 56 percent who felt that way in the first quarter.

Only 10 percent of those surveyed said they expect their companies to cut staff by 10 percent or more during this quarter, down significantly from 44 percent in the first quarter.

The survey results echo statements made last week by Seattle venture capitalists Lucinda Stewart, Andy Dale and Greg Gottesman, who indicated that things -- while still tough -- might be turning around. OVP's Stewart -- citing the uptick in venture investments in the state during the first quarter -- said there are a few "glimmers" of hope.

 "We are still hunkered down, but at least it feels like a bottom," said Dale, a partner at Buerk Dale Victor.

However, it is not a completely rosy outlook. VCs don't think any IPOs will be completed in the second quarter. And only 14 percent of respondents think one of their companies will be acquired, down from 33 percent who felt that way last quarter. Meanwhile, deal valuations are still low. Seventy-one percent of respondents said that they expect "moderately or "substantially" lower deal valuations.

[Flickr photo via Stage88]