There was an improvement in optimism shown by Israeli venture capital funds according to a survey conducted by Israeli law firm Shibolet & Co. in cooperation with Silicon Valley law firm Fenwick & West.
The survey, which examined deals over $500,000, found that in the second half of 2011, first round financing rose as a proportion of overall deals climbed to 18% on an annual basis. This is still a relatively low proportion and comparable with the figures in 2009 and 2010. However the survey says, "This is still an improvement compared with the first half of the year."
Some of the reasons for the rise in early stage investments were the higher number of angels or micro-funds involved rather than standard venture capital funds.
Another clear sign of optimism was that the number of investments carried out according to the down-round company value declined. According to the survey only 25% of investments were on a down round basis compared with 39% of deals in 2010 and 50% in 2009. In contrast 66% of deals were according to an up-round company value compared with 54% and 53% in 2010 and 2009 respectively.
Even so the venture capital industry is far from the optimism of 2007 when 80-85% of deals were on an up-round basis.
Published by Globes, Israel business news - www.globes-online.com - on March 13, 2012
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