Silicon Valley venture capitalists are feeling increasingly optimistic, thanks to an improving exit market and fading macroeconomic concerns.
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In the second quarter of 2013, the Silicon Valley Venture Capitalist Confidence Index registered at 3.78 on a five-point scale, up slightly from 3.73 in the first quarter. This reading marks the fourth consecutive quarter of gains in confidence and optimism. The quarterly reading polls venture capitalists in the San Francisco Bay area.
The venture capitalists polled say they’re feeling enthusiastic about a few key emerging technology sectors. Many cited cloud, mobile and social technology as high-growth sectors, while others were interested in disruptors in media, payment systems and clean technology, such as Tesla.
The VCs also believe the overall economy is on an upswing.
“I continue to see positive macro-economic trends, and the technology trends that are supporting new innovation are continuing to be extremely strong and positive,” says Jon Soberg of Blumberg Capital.
And Vision Capital’s Dag Syrrist says systemic risks like European debt, Cyprus and QE3 appear to be fading into the background.
More IPOs and acquisitions on the horizon also contributed to the VCs’ rosy outlook.
“The IPO market has picked up a bit. Most importantly, there is a surge of acquisition interest by the bigger tech companies in the successful, private, venture-backed tech companies,” says Institutional Venture Partners’ Sandy Miller.
The study notes that the number of venture-backed IPOs in the second quarter of 2013 nearly doubled year-over-year, and more than doubled the number of IPOs in the preceding quarter.
Which some are reading as a sign of clear skies ahead.
“We can all see the effects of a robust, recovering economy,” says Geneva Venture Management’s Igor Sill. “Feels like 1998 without a bubble looming!”