VCs face 'Darwinian contraction' |
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VCs face 'Darwinian contraction'
Source: NVCA
This is hardly a surprise. A new survey released today indicates that the majority of venture capitalists plan to reduce the number of companies they will invest in this year, while just 13 percent plan to increase the number of companies in their portfolios.
The results of the 2009 Global Venture Capital Survey -- conducted by Deloitte Touche Tohmatsu and the National Venture Capital Association -- come as the venture industry adjusts to what NVCA president Mark Heesen described as a "Darwinian contraction" brought on by the recession and globalization.
Because the IPO and M&A markets are slumping, Heesen said that venture capitalists are spending more time working with existing portfolio companies. That's limiting venture capitalists' ability to look for new investments.
Strangely, despite that doom and gloom, 51 percent of the 725 venture capitalists surveyed said that it is a "terrific" time to invest in promising entrepreneurial ventures. That compares to just six percent who said it is an "awful" time.
Other findings:
--52 percent of the VCs plan to invest outside their home countries.
--63 percent of the VCs plan to increase investments in clean tech over the next three years.
--37 percent plan to increase investments in medical devices
--26 percent plan to increase investments in new media.
--22 percent plan to increase investments in software.
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