Concerns about their job security are almost evenly split among venture capitalists, between “somewhat concerned” at 40 percent and “not concerned” at 47 percent, according to the recently-released 2010 JobSearchDigest PEVC Compensation Report.
Those who were somewhat concerned mentioned fund raising concerns, the risk of being downsized, and the future of the VC industry overall as topping their list of worries. Many worried about their firm’s ability to raise the next fund and the lack of deal flow.
Those who were less concerned often noted that their firm had secured the next round of funding. Others mentioned that they were in the right market (often reported as Asia), could easily find a new job if necessary, or that they were a key to running a particular fund. Managing Partners take note: in good markets and bad, top talent knows they can make a move anytime.
The PEVC Compensation Report is based on a survey conducted in October and November 2009. The date comes from hundreds of private equity and venture capital partners and employees from firms, both large and small. The PEVC Compensation Report is a useful tool to help job seekers better manage their pay expectations and fund managers better establish compensation package benchmarks. You can find the full report at www.PrivateEquityCompensation.com
Overall 2009 was a dismal year for venture capital investment, with a 31 percent drop, from $31 billion down to $21.4 billion, worth of deals completed. That’s according to reports that track venture capital funding from the MoneyTree Survey from the National Venture Capital Association and Pricewaterhouse Coopers.
However, the industry saw a bit of a blip in venture capital funding in the fourth quarter of the year, spurred on by investments in biotechnology and life sciences companies, reports the San Diego News.
What’s more, biotech edged out software as the single largest industry category for VC investment, the first time that’s happened since NVCA and PWC began tracking the industry in 1995 for their MoneyTree survey.
According to William Malloie, a partner with PricewaterhouseCoopers, the data shows that venture capitalists aren’t merely retrenching and focusing on the mature companies in their portfolio. Many are seeking out start-up companies in these hotter sectors.
On the other hand, investment in clean tech lags. Clean tech saw dollar investments drop by 52 percent and the number of deals fall by 31 percent in 2009. Advice to venture capital job hunters: focus on VC firms that specialize in biotech and life science.
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.”
