Download - 1001 J V C A N V C A 2010 Survey
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 currentgeographic footprint in 2010 will:
20%
8%
72%
Increase Decrease Remain the Same
Investment in 2010 in the following sectorswill:
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 followingsectors will:
45%
27%
16%
12%
40%
53%
26%
17%
15%
20%
58%
70%
0% 20% 40% 60% 80%
Europe
Israel
India
China
Increase
Unchanged
Decrease
Investment in 2010 in the followingregions 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
Increase
Unchanged
Decrease
Investment in 2010 in the followingstages will:
In 2010 the number of venture-backed IPOswill 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 acquisitionsmarket 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 remainlargely unchanged.
In 2010, venture funds raised on average willbe:
87%
3%10%
Smaller Larger Same size
In 2010, the US venture industry will seeforeign limited partners in:
48%
27%
25%
More Funds Fewer Funds Same Number of Funds
In the next five years, the number of firms inthe venture industry will:
90%
4% 6%
Shrink Expand Remain the same
In the next five years the venture capitalindustry 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 Skypemoment.” - Simon Olson, Partner,
Draper Fisher Jurvetson, FIRCapital Brazil
“For 2010, we plan to broaden our geographicfocus to include investments in Europe.” - John
Huntz, Executive Director, Arcapita Ventures
“It's the global economy, stupid. Focus oninvestments in the USA targeting customers in the
ROW (rest of the world).” – Trevor Loy, GeneralPartner, Flywheel Ventures
Since Sep08 we have focused on firms that can reachbreakeven on this round. In 2010 our willingness to takefinance risk will likely return.” - Bronson Lingamfelter,
Associate, Rose Tech Ventures
“In 2010 we are going to CarpePer Diem - Sieze the day to make
money for our LPs.” - VenkyGanesan, Managing Director,Globespan Capital Partners
“We will do more investment under better environmentfor new deals.” - Masatoshi Ueno, CEO/Technology,
Yasuda Enterprise Development America Inc.
“We will find new mistakes to make that wehave not made before; but all in all things
look pretty strong and the team isoptimistic.” - Bob More, General Partner,
Frazier Healthcare Ventures
“The IPO market for VC backed companies will finally reopen in the USand several IPOs will reach $1 billion market capitalizations or more.” -Pascal Levensohn, Founder and Managing Partner, Levensohn VenturePartners
“Take more companies public.” – Richard Kramlich, General Partner/Co-Founder, NEA
We will look for valuations to comeinto equilibrium and do more
transactions at that time.” – JimHale, Founding Partner, FTV Capital
“We will raise our next fund and continue to invest inconsumer-facing Internet companies like Twitter and Zynga.” -
Norman Fogelsong, General Partner, Institutional VenturePartners
“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/ seeminglyundue precision reverse
engineer the early exit todrive w/ great focus whatfounders do now to growtheir cos.” - Becca Braun,
President, JumpStartVentures
"2010 will be another difficult year for the USventure capital industry as the consolidation of our
industry continues and very bad 10yr return numbersare released. The silver lining: it will be a great yearto make a few excellent investments." - Bob Pavey,
Morgenthaler Ventures
“Move to accelerate thedevelopment of investmentcandidates and portfoliocompanies.” - Greg Knudson,Director, Rocket Ventures
“2010 will likely mark the renewal of Corporate Venture Capital ascorporations 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 moretraditional venture capitalists seek earlier access to capital-efficient deals.” - Christine Herron, Principal, First Round
Capital
“Hopefully nothing. We're rockin' here atCatamount.” - Jed Smith, Managing Director,
Catamount Ventures
“With our new $1.2Bn NVP XI fund, we plan tocontinue 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; alsobuild broader syndicate up front at initial investment.” - George
Arida, Managing Director, Venture Investors LLC
“Embrace more universitiesinto our seed stage model.” -
Rudy Garza, ManagingPartner, G51 Capital
As start-up capital efficiency continues to improve, we will do more earlierstage deals.” – John Backus, Managing Partner, New Atlantic Ventures
“Work harder, maintainhigh standards, and see
more companies.” - C.W.Newhall, General Partner,
Co-Founder, NEA
“We will increase our investment pace becausewe 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 in2010 as we come out of the recession.” – DonRainey, General Partner, Grotech Ventures
“Expect to see us be more aggressiveseeding new opportunities.” - Michael
Greeley, General Partner, Flybridge CapitalPartners
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
sIn
ve
ste
d
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
of
Issu
es
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