Venture capital environment looking better, according to survey

Venture capitalists and venture-backed founders are showing a mix of greater optimism, confidence and measured concern for the venture ecosystem in 2014, according to the results from this year’s Venture View predictions survey conducted by the National Venture Capital Association and Dow Jones VentureSource.

Respondents predicted that 2014 will bring greater IPO volume, greater employment opportunities at startups and improved returns for limited partners. However, CEOs and VCs are skeptical that the federal government can pass legislation to address several issues critical to the vibrancy of the startup ecosystem — particularly immigration reform.

A few highlights of the Venture View survey of 300 VCs and founders, which was conducted earlier this month:

•  Most VCs (59 percent) and CEOs (57 percent) predict higher levels of venture investment overall in 2014, compared to just 27 percent of VCs and 43 percent of CEOs last year.

• Most VCs predict investment increases in Business IT (73 percent), Consumer IT (58 percent) and Healthcare IT (57 percent). Sixty-two percent predict decreases in clean technology, while 46 percent see fewer dollars going into medical devices and 31 percent see the same for biopharmaceuticals. As with last year, Consumer IT is seen as ripe for overfunding in 2014. with 53 percent of all VC respondents citing the sector. Medical Devices was again most often predicted as underfunded, with 39 percent of VCs saying so.

• Latin America was cited by half the VCs as an area of increasing U.S. investment in 2014, followed by Africa, China and Western Europe. India, which VCs predicted would see an increase in U.S. venture dollars in 2013, is expected by 40 percent of respondents to see a decrease in investment levels. Thirty-two percent expect China to see less investment.

Another report released by Cherrystone Management Consultants in Boca Raton analyzed the past 12 months ended in September. It showed that the $318 million in VC investments in Florida businesses increased by 45 percent, ranking 14th in the nation, but on a per capita basis Florida falls to 29th place.

Also last week, the Florida Institute for the Commercialization of Public Research and Dawson James Securities teamed up to provide a platform to identify and assist qualified startups, expand Florida’s angel investor base, increase early-stage funding and prepare companies for later stages of growth.

Follow Nancy Dahlberg on Twitter @ndahlberg

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