Dr. Mark Cannice just released his latest research on confidence levels of venture capitalists in the Bay Area. Cannice's Silicon Valley Venture Capitalist Confidence Index® for the first quarter of 2014, based on a March 2014 survey of 31 San Francisco Bay Area venture capitalists, registered 4.03 on a 5 point scale (with 5 indicating high confidence and 1 indicating low confidence). This quarter’s index measurement increased from the previous quarter’s confidence reading of 3.94. The Q1 confidence reading made for seven consecutive quarters of increasing sentiment, the longest upward trend in the history of the index, and the highest level since Q3 2007.
This is the 41st consecutive quarterly survey and research report—providing 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, conducts the research and writes the study each quarter.
In the new report, Cannice found that the continuing strong IPO market for venture-backed firms clearly buoyed VC confidence. “The Castlight IPO has positively impacted the healthcare IT sector,” said Thomas McKinley of Cardinal Partners. In his survey reply, Igor Sill of Geneva Venture Management indicated “This strong IPO market will set the stage for increased M&A activity and a more aggressive venture funding of series A start-ups in the months ahead.”
Cannice maintains that central to the attractiveness of venture-backed firms in the public exchanges are the “disruptive nature of the innovations they are bringing to the market.” Supporting that notion, Jeb Miller of Jafco Ventures attributed his confidence to “massive market disruption with the rise of cloud, mobile and big data platforms and the increasingly vulnerable position of legacy incumbents.” Mark Platshon of Birchmere Ventures detailed, “I’ve never seen such a broad array of sectors all being disrupted in meaningful ways at the same time.” Still, some caution was voiced. Kurt Keilhacker of Techfund Capital stated, “Firms are anxious to create liquidity events for their investors as they are mindful that IPO and acquisition windows often abruptly change.”
2014 Q1 VC Confidence Index Report