Venture capitalists and venture-backed CEOs are feeling more optimistic about 2011, according to the fifth annual outlook survey being released today by the National Venture Capital Association and Dow Jones VentureSource. The most recent “Venture View” survey is based on responses from more than 330 VCs and 180 executives that were collected nationwide at the beginning of December.
With investors returning to the public markets (the Standard & Poor’s 500 stock index is up 11 percent this year, and more than 80 percent since March 2009), two-thirds of the VCs say they expect to see more venture-backed companies going public in 2011. Venture capitalists also predict that venture firms also will invest more capital in the coming year—which is a good thing, since more than two-thirds of the CEOs say they plan to pursue additional funding in 2011.
Venture-backed chief executives say they expect to hire more, sell more, and (of course) get paid more in 2011.
The survey suggests that VCs are gaining confidence in the improvement of their industry, and in the recovery of the U.S. economy in general.
At this time last year, the survey showed that venture capitalists were only cautiously optimistic. “The market was so troubled in 2009, the sentiment was that things had to get better in 2010,” says NVCA President Mark Heesen in a statement. “The improving exit market and a renewed excitement in the IT sector have engendered a confidence among VCs and the CEOs of the companies in which we invest that promises to propel the startup community forward in 2011.”
VCs were less confident, though, about their own prospects for fund-raising—which poses a concern for the industry’s well-being. When asked “How will U.S. venture capital fund-raising fare in 2011?” 38 percent of the VCs said they expect fund-raising to increase, while 32 percent expect it to decrease, and 30 percent anticipate that fund-raising will remain unchanged. Nearly half (48 percent) said they expect to see more
