Venture View: 2010
NVCA Predictions Survey Results
Venture View: 2010 VC Predictions Survey Results
•Fourth Annual Predictions Survey of the NVCA
•Conducted in Nov. 30 – Dec. 8, 2009
•More than 325 responses from VCs across the US
•For more information – Contact: Emily Mendell ([email protected])
– Contact: Channa Brooks ([email protected])
In 2010, venture capital investment will:
7%
44%29%
9%11%
Increase substantially >$25 BN Increase slightly $21-25 BN Decrease slightly $15-21 BN
Decrease substantailly <$15 BN Remain unchanged from 2009
In 2010, our firm will invest in:
49%
18%
33%
More portfolio companies Fewer portfolio companies
The same number of portfolio companies
The percentage of deals outside our current geographic footprint in 2010 will:
20%
8%
72%
Increase Decrease Remain the Same
Investment in 2010 in the following sectors will:
30%
15%
26%
43%
37%
39%
20%
32%
33%
46%
54%
25%
0% 20% 40% 60%
Software
Media/Entertain.
Internet
Clean Tech
Increase
Unchanged
Decrease
64%
33%
34%
37%
31%
38%
36%
34%
5%
29%
30%
30%
0% 10% 20% 30% 40% 50% 60% 70%
Semiconductors
Med Devices
Biotech
Wireless
Increase
Unchanged
Decrease
Investment in 2010 in the following sectors will:
45%
27%
16%
12%
40%
53%
26%
17%
15%
20%
58%
70%
0% 20% 40% 60% 80%
Europe
Israel
India
China
IncreaseUnchangedDecrease
Investment in 2010 in the following regions will:
31%
30%
20%
19%
15%
25%
25%
32%
28%
30%
45%
45%
49%
53%
55%
0% 20% 40% 60%
Seed
Early
Expansion
Late
Growth Equity
IncreaseUnchangedDecrease
Investment in 2010 in the following stages will:
In 2010 the number of venture-backed IPOs will be:
26.1%
43.3%
20.4%
10.2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0-19 20-29 30-50 >50
Mean: 26.32Min: 5 Max: 120Median: 25
In 2010 the # of venture- backed acquisitions will:
91%
1%
8%
Increase Decrease Same
In 2010 the value of venture-backed acquisitions will:
64%11%
25%
Increase Decrease Same
In 2010 the venture-backed acquisitions market will improve.
In 2010 the # of venture investors in our firm will:
22%
15%63%
Increase Decrease Same
In 2010 the # of admin professionals in our firm will:
12%
17%
71%
Increase Decrease Same
In 2010 firms resources are expected to remain largely unchanged.
In 2010, venture funds raised on average will be:
87%
3%10%
Smaller Larger Same size
In 2010, the US venture industry will see foreign limited partners in:
48%
27%
25%
More Funds Fewer Funds Same Number of Funds
In the next five years, the number of firms in the venture industry will:
90%
4% 6%
Shrink Expand Remain the same
In the next five years the venture capital industry will shrink by:
20%
58%
21%1% 0%
< 15% 16-30% 31-50% 51-70% >70%
“Corporate venturing & job creation funds.” - Thomas O. Gephart,
Managing Partner, Ventana Capital
2010 will be Brazil's Skype moment.” - Simon Olson,
Partner, Draper Fisher Jurvetson, FIR Capital Brazil
“For 2010, we plan to broaden our geographic focus to include investments in Europe.” - John Huntz, Executive Director,
Arcapita Ventures
“It's the global economy, stupid. Focus on investments in the USA targeting customers in the ROW (rest of the world).” – Trevor Loy,
General Partner, Flywheel Ventures
Since Sep08 we have focused on firms that can reach breakeven on this round. In 2010 our
willingness to take finance risk will likely return.” - Bronson Lingamfelter, Associate, Rose Tech
Ventures
“In 2010 we are going to Carpe Per Diem - Sieze the day to make money for our
LPs.” - Venky Ganesan, Managing Director, Globespan
Capital Partners
“We will do more investment under better environment for new deals.” - Masatoshi Ueno,
CEO/Technology, Yasuda Enterprise Development America Inc.
“We will find new mistakes to make that we have not made before; but all in all things look pretty strong and the
team is optimistic.” - Bob More, General Partner, Frazier Healthcare
Ventures“The IPO market for VC backed companies will finally reopen in the US and several IPOs will reach $1 billion market capitalizations or more.” - Pascal Levensohn, Founder and Managing Partner, Levensohn Venture Partners
“Take more companies public.” – Richard Kramlich, General Partner/Co-Founder, NEA
We will look for valuations to come into equilibrium and do
more transactions at that time.” – Jim Hale, Founding Partner, FTV
Capital
“We will raise our next fund and continue to invest in consumer-facing Internet companies like Twitter and
Zynga.” - Norman Fogelsong, General Partner, Institutional Venture Partners
“500K to 1M as early as possible in great teams = early stage investing.” - Steve Fredrick, General Partner, Grotech Ventures
What will you do differently in 2010?
Relentlessly & w/ seemingly undue precision reverse
engineer the early exit to drive w/ great focus what founders do now to grow their cos.” -
Becca Braun, President, JumpStart Ventures
“Move to accelerate the development of investment candidates and portfolio companies.” - Greg Knudson, Director, Rocket Ventures
“2010 will likely mark the renewal of Corporate Venture Capital as corporations will rediscover the value of tapping external innovation.” - Bernard Slede, Portfolio Manager, HP Corporate Venture Capital
Actually spend meaningful time with investment bankers, again.” - Gerry Langeler, Managing Director, OVP Venture Partners
“The makeup of seed syndicates will evolve in 2010, as more traditional venture capitalists seek earlier access to capital-efficient deals.” - Christine Herron, Principal,
First Round Capital
“Hopefully nothing. We're rockin' here at Catamount.” - Jed Smith, Managing Director,
Catamount Ventures
“With our new $1.2Bn NVP XI fund, we plan to continue our expansion along 3 vectors: 1.
Stages (early & late)2. Regions and 3. Sectors.” - Sergio Monsalve, Principal, NVP
“More reserve capacity per deal and less deals per fund; also build broader syndicate up front at initial
investment.” - George Arida, Managing Director, Venture Investors LLC
“Embrace more universities into our seed
stage model.” - Rudy Garza, Managing Partner,
G51 Capital
As start-up capital efficiency continues to improve, we will do more earlier stage deals.” – John Backus, Managing Partner, New Atlantic
Ventures
“Work harder, maintain high standards, and see
more companies.” - C.W. Newhall, General Partner, Co-Founder,
NEA
“We will increase our investment pace because we believe this a great time to
invest - innovation and strong companies abound!” - Jeanne M Sullivan, General
Partner, StarVest Partners L.P.
“We will fund growth more aggressively in 2010 as we come out of the recession.” – Don Rainey, General Partner, Grotech Ventures
“Expect to see us be more aggressive seeding new opportunities.” - Michael
Greeley, General Partner, Flybridge Capital Partners
What will you do differently in 2010?
Historical Data for the Venture Industry
0.0
20.0
40.0
60.0
80.0
100.0
120.0
BN Raised 18.1 30.6 58.2 106.6 38.0 3.8 10.6 19.2 28.9 31.9 36.1 28.6 8.3
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q309
Source: Thomson Reuters/NVCA
Venture Capital Fundraising 1997-2009
$14$20
$52
$101
$39
$21 $19 $22 $23$26 $31 $28
$12
$0
$20
$40
$60
$80
$100
$120
$ B
illi
on
s I
nv
es
ted
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
Q3
09
Source: PricewaterhouseCoopers/National Venture Capital Association MoneyTree™ Report,Data: Thomson Reuters
Venture Capital Investment 1997-2009
0
100
200
300
400
500
600
700
Nu
mb
er o
f Is
sues
M&A
IPO
M&A 164 209 240 317 353 319 285 348 350 375 378 348 189
IPO 136 77 260 264 41 24 29 93 56 57 86 6 8
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q3 09
Source: Thomson Reuters/National Venture Capital Association
Venture Capital Exits 1997-2009
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