San Francisco Advantage

Silicon Valley Venture Capitalists’ Confidence Inches Higher in the Fourth Quarter of 2023, According to University of San Francisco Quarterly Research Study in its 20th Year

Uptick in sentiment caused by expectations of AI impact on the innovation cycle, receding startup valuations, and possible IPO window

SAN FRANCISCO (March 21, 2024) – The Silicon Valley Venture Capitalist Confidence Index™ 
for the fourth quarter of 2023, based on a January 2024 survey of 32 San Francisco Bay Area venture capitalists, registered 3.63 on a 5-point scale (with 5 indicating high confidence and 1 indicating low confidence). The Q4 2023 Index inched higher from the prior quarter’s reading of 3.57 and now hovers just below the 20-year average of 3.65.

“Growing excitement over the impact of artificial intelligence on startup opportunities, along with moderating valuations, raised confidence in the long-term outlook of the venture environment in Silicon Valley, as the region continues to hold an advantage in terms of the concentration of talent and experience in creating and growing new industries,” stated Mark Cannice, University of San Francisco (USF) School of Management professor and the study’s author. “Anticipation of easing interest rates also supported confidence.”

Sandy Miller of Institutional Venture Partners, one of the survey’s respondents, offered an upbeat forecast, stating that “2024 should be a constructive year for the venture capital ecosystem. We should see a number of high-quality IPOs, and, as almost always happens, an uptick in merger and acquisition activity accompanying that.” 

Jeb Miller of Icon Ventures noted that “We’re in the early innings of the massive AI-powered digital transformation, and San Francisco remains the epicenter of the blossoming AI market.”  

Shomit Ghose of Clearvision Ventures predicted, “We're about to witness a Cambrian Explosion in the field of AI. Reinforcement learning, GNNs, GANs, PFGMs, diffusion, transformers, etc., will drive a wave of enterprise innovation.”

Some VC respondents were less optimistic, and as Mohanjit Jolly of Iron Pillar reasoned, “I think a combination of continued tightening of purse strings amidst an environment of uncertainty will cause 2024 to be sluggish from a growth investment standpoint.” Additionally, Dag Syrrist of Vision Capital explained, “It may take a while for the valuation re-set to filter down to LP reporting, and during this period instinctively funds are more cautious in deploying more capital, coupled with general LP pull back.”

The survey and research report for Q4 2023 marks the 20-year anniversary (80th consecutive quarterly report since Q1 2004) of this ongoing research. It aims to provide 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, professor of entrepreneurship and innovation with the USF School of Management, authors the research study each quarter.

Those interested in viewing the Q4 2023 report in its entirety should contact Kellie Samson at the University of San Francisco at

About the USF School of Management

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