48% of venture capitalists in the Deloitte Brightman Almagor Zohar VC Indicator Survey for the third quarter of 2009 expect only a slight increase in the number of investments in start-ups over the next six months. 33% of respondents expect no change, and 8% expect a decline in the number of investments. Altogether, 89% of Israeli venture capitalists expect no significant increase in the number of investments in start-ups over the next six months. Only 11% of respondents expect a large increase in the number of investments in start-ups.
59% of Israeli venture capitalists do not expect investments in start-ups over the next six months to be made at higher valuations. 15% of respondents expect to make investments at lower company values, and 26% expect to make investments at higher company values.
In another sign that the venture capital industry is still far from its glory days before the global economic crisis, only 19% of Israeli venture capitalists intend to concentrate on new investment in the next six months. 67% of respondents in the survey will focus on managing their current portfolios of start-ups. Only 7% of respondents plan to focus on fund-raising and another 7% will review investment proposals by entrepreneurs.
Deloitte Brightman partner and the Technology, Media & Telecommunication Industry Leader Tal Chen said, "Many signs indicate that while the peak of the crisis in behind us, we face a new routine. The new reality that we're facing is not the same reality as before the crisis. Venture capital funds and start-ups must adapt to the new routine. The funds bear the responsibility of investing most of their resources in managing and leading their present portfolios."
Israeli venture capital funds are shifting investment to late-stage companies. Future investment in early-stage starts will fall to 50% of total investment from 70% in late 2007.
70% of Israeli venture capitalists believe that the next Israeli company to float on Nasdaq will be in second half of 2010, or even later. 15% expect at IPO before the end of 2009, and the same proportion expect an IPO in the first quarter of next year.
In view of the prolonged drought in IPOs and M&A, new players will likely enter the venture capital market. 39% of Israeli venture capitalists expect private equity funds to increase their acquisitions of start-ups.
Few venture capitalists are optimistic about the Israeli economy. 48% expect an improvement in the next six, while 45% who expect no change. 85% of venture capitalists do not expect a full recovery before the end of 2010.
Published by Globes [online], Israel business news - www.globes-online.com - on October 11, 2009
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