Silicon Valley Venture Capitalist Confidence Index™ Falls to Lowest Level in Nearly 10 Years

SAN FRANCISCO (Feb. 7, 2019) -- The Silicon Valley Venture Capitalist Confidence Index™ for the fourth quarter of 2018 registered 3.2 on a 5 point scale (with 5 indicating high confidence and 1 indicating low confidence). This quarter’s index measurement fell from the previous quarter’s index reading of 3.52 to the lowest point since the end of the financial crisis.

This is the 60th 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. Dr. Mark Cannice, department chair and professor of entrepreneurship, innovation, and strategy with the University of San Francisco (USF) School of Management, authors the research study each quarter.

“Political uncertainty and its impact on the health of the venture ecosystem, along with broader macroeconomic concerns, were the primary driving factors weighing on sentiment,” Professor Cannice indicated in the new report.

“Long-term, I’m bullish and confident that the innovation economy will continue to define the future of business,” noted Shomit Ghose of Onset Ventures. “In the short-term, however, the innovation economy is bound to feel the headwinds from the macro-economy.”

Mark Platshon of Ice Breaker Ventures cautioned, “I am concerned that the government shutdown, China trade-war, Brexit and other political traumas could trigger slower growth or a recession. I think political turmoil domestically will impact the market as well.” 

Professor Cannice also noted that, “A reassessment of the value proposition on technology firms appears to have begun.” For example, Venky Ganesan of Menlo Ventures declared, “The era of Big Tech is over. Trust, confidence and social good trump user engagement and growth. Every company regardless of whether it is consumer or enterprise needs to show that it values social utility and trust higher than revenues.” Finally, John Malloy of BlueRun Ventures observed, “Capital access is already constricting and will get worse over this timeframe.”

Professor Cannice concluded the report, writing, “Having macro political machinations directly impact the specific dynamics of venture growth is a rare occurrence in the 15-year history of this ongoing quarterly research. This should be a signal to policy makers in the U.S. and beyond to curtail the uncertainty that is directly impacting innovation and economic growth.”

To view the report in its entirety, please contact Kellie Samson at ksamson@usfca.edu for a copy.

About the USF School of Management

Founded in 1925, University of San Francisco’s School of Management is on the forefront of educating the next generation of conscious, mindful business leaders. Each year those students join the over 40,000 School of Management alumni around the world to create ethical and innovative change in the private, public, and non-profit management sectors. The School is accredited by the Western Association of Schools and Colleges Senior College and University Commission (WSCUC) and the Association to Advance Collegiate Schools of Business (AACSB). Visit the USF School of Management website for more information.