More than half (56 per cent) of US venture capital executives are more confident and optimistic about the industry today compared to a year ago, according to a survey by Polachi, a provider of executive search services to technology, private equity and venture capital companies.
The survey found executives to be split down the middle when it comes to which geographical region currently represents the area of hottest investment opportunities, as 42 per cent indicated the east coast and 42 per cent indicated the west coast/Silicon Valley.
The Boston and New York markets are gaining speed with a spike in venture capital activity.
When asked about the hottest growth areas in the venture capital industry, consumer internet/web 2.0 received the highest response (73.5 per cent) followed by cleantech/energy (53.1 per cent) and internet marketing (40.8 per cent).
“Venture firms play a critical role in the development of new technologies and start-ups, which are vital to economic growth and job creation,” says Charley Polachi, partner at Polachi. “I’m encouraged to hear that VCs are optimistic about the industry and excited that Boston and New York represent high activity areas.”
The survey also found that 71.4 per cent of respondents are not worried about new deals and 72.9 per cent indicate they expect to see a steady deal flow over the next six months.
When asked to identify which functional trends they were most concerned about, 62 per cent of the executives indicated they were very worried about the uncertain return of exit markets, and the remaining 38 per cent were “worried”.
The survey also asked how the tax legislation on carried interest will impact the venture business and 46 per cent indicated it will have a major negative impact, while 16 per cent believe a “work around” will be found.
