The National Venture Capital Association has released Venture View 2010, its annual survey of more than 325 venture capitalists across the U.S. Among the findings: most respondents predict slightly more dollars going into more companies in 2010. But the prognosis for the entire asset class is a gradual pullback in size, over the next five years.
Among the areas most likely to enjoy increases in investment activity are clean technology, with 54 percent predicting growth. Other favored industries include Internet (46 percent), Media and Entertainment (33 percent) and Software (32 percent). No surprise – a whopping 70 percent of respondents believe there will be more venture capital investment flowing into Asia, particularly into China-based companies.
As for hiring, despite widespread agreement on a contracting industry, nearly two-thirds of respondents said they do not anticipate significant in-house changes in staffing next year. 63 percent said the number of venture capital jobs within their firm will remain static.
“The consolidation of the venture industry will not occur overnight,” said Mark Heesen, president of the NVCA. “This process will be a gradual one. Those funds that are raised will generally be smaller and over time, the firms will contract accordingly. Venture capitalists will have to do more with less.”
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70 percent says more funds will go into Asian (Chinese) companies. If that is the opinion and maximum investment goes there, there is less likely that Venture capital staffing will remain same in 2010; rather it will increase to a great extent. One reason would be the market behavior of China and India during the difficulty period of last year; the negative impact was less and recovery was fast. When they are recovering now, the growth suppresses earlier losses.
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