The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – Just as on Wall Street in a crisis when investors flock to the security of U.S. Treasuries (at least for now, anyway), venture capitalists worldwide prefer to make deals in the United States.
So reveals a new global survey of venture capitalists in a new report out Monday from financial services firm Deloitte and the National Venture Capital Association.
Like many investors, VCs have regained much of their confidence that disappeared in the 2008 financial crisis. In the first survey designed specifically to gauge global VC confidence over the eight year history of the Deloitte-NVCA collaboration and with 72 percent of the 440 respondents coming from outside the U.S., here are confidence levels (on a scale of 5) by countries:
1. U.S. (3.64)
2. Brazil (3.56)
3. China (3.46)
4. Israel (3.37)
5. India (3.27)
6. Canada (3.23)
7. Singapore (3.11)
8. Taiwan (3.08)
9. Australia (3.03)
10. Germany (2.97)
And if you are naive enough to believe elections don’t matter, France came in 14th at 2.34.
Interestingly, U.S.-based VCs didn’t score their homeland highest on the confidence scale. Israel did at 4.21. Americans were next with a score of 3.87 followed closely by Canada at 3.83.
How odd it might strike you that China investors gave the U.S. the lowest score at 3.19.
Maybe the Chinese are more comfortable with buying U.S. debt than making venture plays here.
Not Bulls, Not Bears
Before any of you entrepreneurs dust off business plans in hopes that the investment climate is improving, you should read deeper into the survey.
The level of confidence in the global economy isn’t all that great, although certain “pockets” are appealing.
“We are starting to see some positive signs that the global economy is beginning to rebound from where it was two years ago,” said James Atwell of Deloitte. “Venture capitalists are already starting to grow more confident within their home countries, along with significant opportunities ahead in fast growing IT sectors like cloud computing and social media, further demonstrating the optimism about certain investment opportunities.”
Added Mark Heesen, NVCA’s president: “By their very nature, venture capitalists are an optimistic group, but economic uncertainty and other challenging externalities have tested the mettle of the industry in the past year.“Despite the ongoing market concerns that were exhibited in the survey results, the opportunistic nature of the industry remained clear. Venture capitalists are nimble and can quickly move to where the most promising entrepreneurs, policies and innovations reside. This reality guarantees a globally competitive market for capital and reaffirms the mandate for governments to enact policies that attract investors and innovators to their shores.”
Canadian, Australian and Israeli VCs give the global economy the best scores of 3.15, 3.14 and 3.13 respectively. U.S. VCs score the world at 2.85.
As for what tech areas VCs prefer to invest, we have the details in another Skinny for deals.