USF Survey: Growing Confidence in the Economy
Venture capitalists (VCs) based in Silicon Valley are more confident in the economy than at any time since the 2008 economic collapse, according to a recent survey by Mark Cannice, professor of entrepreneurship and innovation in USF’s School of Management.
The average confidence level of the 32 VCs who answered the survey was 3.94 on a scale of one-to-five (five indicating high confidence), making this the sixth consecutive quarter Silicon Valley VCs have indicated growing faith in an economic recovery.
"More venture capital-backed startups were able to list on the stock exchanges in 2013," Cannice said. "That allowed for good returns on the capital that venture capitalists invested in those startups, and some of that capital will be reinvested in the next generation of high-growth startups.”
Risk of overheating
Still, some VCs signaled a need for caution in specific sectors. "While the level of innovation in Silicon Valley is unprecedented in its scope, there is a risk of overheating in some areas, including social media and social commerce," said Robert Ackerman of Allegis Capital.
The Jan. 30 report is the 10th anniversary of the Silicon Valley Venture Capitalist Confidence Index. It is frequently cited in the Wall Street Journal and other publications as an economic indicator, because VCs are among the first to invest in developing companies.