Posted on 06/23/2005 2:29:22 AM PDT by nickcarraway
Four out of five U.S. venture capitalists don’t plan to expand their investments abroad.
The vast majority of U.S. venture capitalists plan to keep their investments inside the United States as they continue to view the nation as a place where big bets on entrepreneurs are most likely to pay off, according to a survey released Wednesday.
Only 20 percent of VCs planned to increase investments outside the U.S. over the next five years, said Deloitte & Touche’s report, which surveyed 545 venture capitalists between February and April.
Only one U.S. venture partner in nine is currently investing abroad, according to the survey.
“The United States has been and will continue to be the worldwide leader in entrepreneurship,” said Mark Heesen, president of the National Venture Capital Association.
Even though U.S. venture investors are reluctant to jump into foreign markets, 39 percent said they planned to develop strategic alliances with experienced, foreign-based venture firms.
Meanwhile, foreign investors had more interest in investing inside the U.S. than in any other country, with 65 percent of foreign VCs planning to plow money into U.S. startups.
“Foreign investors are increasingly interested in U.S. venture capital firms, indicating the U.S. VC industry will be well-fueled to expand globally without diminishing its pace of U.S. investments,” said Mark Jensen, who heads Deloitte & Touche’s national VC services group.
One possible reason that the U.S. is such a magnet for foreign VC investment? As the value of the dollar falls abroad, venture firms may find that their money goes further in the U.S. than it does in their home countries.
Despite the chilling effect that recent corporate governance regulations have had on U.S. IPOs, the U.S. still has a lot to offer companies looking to go public. The Nasdaq, for example, offers a great deal of liquidity for investors seeking to cash in on their investments.
By contrast, many European markets are more thinly traded, increasing the chance that the stock of the recently floated company will fall when VC investors go to sell their shares (see Europe’s VCs Look for an Exit).
Even though the U.S. is for now the place to be for VCs, investment dipped in the first quarter. U.S. investors put $4.6 billion into 474 startups last quarter, down from $5.45 billion into 521 startups from the same quarter a year before. Meanwhile, Europe saw an increase in VC investment (see VCs Call for Change).
When I saw the headline, I thought, Jane Fonda?
A bit misleading. All the major VC firms (the ones that count) are active overseas. China, India, Israel, E Europe are hot tickets.
Gee, I "wonder" if the reason the VC's are staying with the US is because THAT IS STILL WHERE THE MOST INNOVATIVE IDEAS COME FROM??
Not to mention 230 years of stable government and the rule of law.
Well, I'm sure that the above is a major reason for high innovation---the very freedom of thought (though becoming more and more constrained by "political correctness" and increasing anti-free speech laws (i.e. campaign finance "reform")) is a huge necessary factor.
That is funny!
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