Venture Capital Confidence Index Sees Big Advance in First Quarter

Among venture capitalists, confidence in conditions ahead took a big jump in the first quarter, as an improving IPO market lifted the spirits of investors, according to a University of San Francisco survey.

The advance in sentiment – to 3.79 from 3.27 in the fourth quarter – follows three months of falling confidence.

The index, compiled by Professor Mark Cannice, measures sentiment among Silicon Valley and San Francisco-area venture capitalists, where in the first quarter, 36% of the nation’s venture money flowed.

Along with the better liquidity opportunities, venture capitalists interviewed in the survey pointed to their excitement over the convergence of mobility, cloud and social technologies for their improving mood.

Concerns remain over the fragile economic recovery and regulatory hurdles, the study found.

“Capital markets are showing sustained momentum (and) nothing beats the prospect of liquidity,” said Dag Syrrist of Vision Capital, one GP quoted in the survey. “There’s an overwhelming sense of optimism, which is what’s in fact needed and should be self-fulfilling.”

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