Silicon Valley Venture Capitalists Confidence Index™ Rises Again in First Quarter of 2018

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The Silicon Valley Venture Capitalist Confidence Index™ for the first quarter of 2018 registered 3.76 on a 5-point scale.

“The increasing sentiment was driven in large measure by an improving exit market, abundant capital, and a continuing wave of sophisticated new ventures that aim to transform business as we know it.”

The Silicon Valley Venture Capitalist Confidence Index™ for the first quarter of 2018 registered 3.76 on a 5-point scale (with 5 indicating high confidence and 1 indicating low confidence). This quarter’s index measurement rose from the previous quarter’s index reading of 3.66. The Q1 rating based on responses by 34 Silicon Valley Venture Capitalists and also rose above the 14-year average of 3.71.

This is the 57th 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, 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 Dr. Cannice said, “The increasing sentiment was driven in large measure by an improving exit market, abundant capital, and a continuing wave of sophisticated new ventures that aim to transform business as we know it.” For example, Tim Draper of DFJ pointed out that “Bitcoin and the Blockchain have opened up entirely new veins for innovation and entrepreneurship. There are entire industries that can now be reinvented—health care, insurance, banking, real estate, finance, even government.” Jeb Miller of Icon Ventures credited an “abundance of capital, improving exit environment and ongoing massive market cap shift to modern cloud, mobile and data powered businesses” for his high confidence.

However, some venture capitalist respondents were less sanguine. For example, Venky Ganesan of Menlo Ventures stated “The Bay Area has overheated. Startup salaries have gone stratospheric, housing has become completely unaffordable, founders have started to chase ICOs instead of IPOs. In TV terms, the Bay Area has jumped the shark.” Lisa Suennen of GE Ventures added “The overall market is mixed but there is a lot of money available to invest. The question is whether we will soon face a recession.” Cannice concluded the report, saying “The near-term outlook remains positive as Silicon Valley continues to be the destination and launching point of visionary entrepreneurs, and the Valley’s investor-coaches remain ready and able to finance and mentor entrepreneurial dreams into realities.”

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About the University of San Francisco:
The University of San Francisco is located in the heart of one of the world’s most innovative and diverse cities and is home to a vibrant academic community of students and faculty who achieve excellence in their fields. Its diverse student body enjoys direct access to faculty, small classes, and outstanding opportunities in the city itself. USF is San Francisco’s first university, and its Jesuit Catholic mission helps ignite a student’s passion for social justice and a desire to “Change the World From Here.” For more information, visit usfca.edu

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Kellie Samson
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