Confidence Edges Lower Among Silicon Valley VCs in Q4

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New research from University of San Francisco (USF) Professor Mark Cannice finds the Silicon Valley Venture Capitalist Confidence Index® for the fourth quarter of 2016, registered 3.81 on a 5-point scale—a dip from the previous quarter’s index reading of 3.88.

The Silicon Valley Venture Capitalist Confidence Index® for the fourth quarter of 2016, registered 3.81 on a 5-point scale -- edging lower from the previous quarter’s index reading of 3.88.

“Continuing concerns over political uncertainty restrained sentiment despite an outlook for rapid innovation and a more welcoming exit environment in 2017," said USF Professor Mark Cannice.

The Silicon Valley Venture Capitalist Confidence Index® for the fourth quarter of 2016, registered 3.81 on a 5-point scale (with 5 indicating high confidence and 1 indicating low confidence). This quarter’s index measurement edged lower from the previous quarter’s index reading of 3.88.

This is the 52nd consecutive quarterly survey and research report and, thus, provides unique quantitative and qualitative trend data and analysis on the confidence of Silicon Valley venture capitalists in the future high-growth entrepreneurial environment. Mark Cannice, Ph.D., department chair, and professor of entrepreneurship and innovation with the University of San Francisco (USF) School of Management, authors the research study each quarter.

In the new report Professor Cannice writes, “Continuing concerns over political uncertainty restrained sentiment despite an outlook for rapid innovation and a more welcoming exit environment in 2017.” For example, Ajay Chopra of Trinity Ventures advised, “We are at the start of a massive innovation cycle driven by artificial intelligence (AI) that will have as broad an impact on multiple industries as mobile and cloud computing.” John Malloy of BlueRun Ventures added, “Some of the largest sectors of the U.S. economy, such as transportation and healthcare are in the early stages of what promises to be decades long transformations that will drive almost insatiable demand for innovation in AI, ML, robotics, and computer vision, and will require significant shifts in fundamental network architectures.”

However, caution persisted around aspects of the entrepreneurial environment. Dag Syrrist of Vision Capital wrote, “a combination of political and international instability in the U.S. and abroad will likely cause market volatility, with great uncertainty before the new administration’s actual policies get unveiled…” Additionally, other VC respondent indicated, “…new administration creates a significantly higher risk of a major disaster (political, military, economic) that will appear as a one off event, but for which the foundation is currently being laid.”

“The political uncertainty that the nation and its industries are currently experiencing would at first appear to deflate the present value of going concerns and new ventures,” wrote Cannice concluding the report.

To review the complete report, please visit http://www.usfca.edu/management/svvcci

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Anne-Marie Devine Tasto
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