2014 Global venture capital confidence survey results...• The 2014 Global Venture Capital Confidence Survey was conducted jointly by Deloitte & Touche LLP and the National Venture

2014 Global venture capital confidence survey results How confident are investors?August 13, 2014

Copyright © 2014 Deloitte Development LLC. All rights reserved.

Contents

Survey methodology, demographics and key findingsEconomic trendsRegional and country investingCapital market, policy and fundraising trendsSector investing

Survey methodology, key findings anddemographics


Methodology

• The 2014 Global Venture Capital Confidence Survey was conducted jointly by Deloitte & Touche LLP and the National Venture Capital Association (NVCA). It was administered to venture capitalists in the following regions: the Americas, Europe, Middle East, and Asia Pacific.

• Deloitte received 331 responses from general partners with assets under management ranging from less than $50 million to greater than $10 billion. Multiple responses from the same firm were encouraged as the survey was a general measurement of the state of global investing from general partners and not attitudes of specific firms.

• Confidence levels were measured on a scale of 1-to-5, with a score of 5 representing the most confidence.

• Confidence levels between 4.0+ are considered very positive, 3.5 – 3.99 is considered positive, 2.5 – 3.49 is neutral and below 2.49 is negative.

• The survey was conducted during May and June of 2014.

As used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.


Participating venture capital associations• African Venture Capital Association (AVCA)• Australian Private Equity & Venture Capital Association Limited (AVCAL)• Brazilian Association of Private Equity & Venture Capital (ABVCAP)• British Venture Capital Association (BVCA)• Canada's Venture Capital & Private Equity Association (CVCA)• China Venture Capital and Private Equity Association (CVCA) • East Africa Venture Capital Association (EAVCA)• Emerging Markets Private Equity Association (EMPEA)• European Private Equity and Venture Capital Association (EVCA) • Finnish Venture Capital Association (FVCA) • Indian Venture Capital Association (IVCA)• Israel Advanced Technology Industries (IATI)• Japan Venture Capital Association (JVCA)• Latin America Venture Capital Association (LAVCA)• National Venture Capital Association (NVCA)• Private Equity Growth Capital Council• Singapore Venture Capital & Private Equity Association (SVCA)• South African Venture Capital & Private Equity (SAVCA)• Swedish Private Equity & Venture Capital Association (SVCA)• Taiwan Venture Capital Association (TVCA)


Key findings

• Confidence in the U.S. is increasing which is driven by strong IPO markets, innovative companies and increased confidence in investors being able to fundraise, all of which bodes well for entrepreneurs.

• Confidence is increasing in the U.S. in the face of negativity around the government not being able to enact policies to support the VC industry.

• Less capital intensive sectors such as Cloud and SaaS are seen as more confident.

• Global confidence levels continued to wane in Brazil and China, while Canada, Israel and the UK show increased confidence.


Country investing



Sector investing


Responses and demographics

• 331 total responses− 25% from U.S.− 75% non-U.S. countries

• Survey conducted in the Americas, Europe, Middle East, and Asia Pacific

• Responses from large, midsized and small firms, with the largest concentration, 35%, with $100–$499 million in assets under management

$1 million -$49 million,

17%

$50 million -$99 million,

16%$100 million - $499

million, 35%

$500 million - $1 billion,

14%

$1 billion -$10 billion,

15%

$10 billion -$50 billion,

2%

Capital under management in $ USD:

Venture Capital, 65%

Growth Equity, 15%

Private Equity/LBO,

20%

Primary investment focus


Respondents by home countryDemographics

25%11%

10%9%

8%8%

6%4%

4%4%4%

2%1%1%1%

1%1%

0%0%0%0%0%0%0%

0% 5% 10% 15% 20% 25% 30%

United StatesChina

South AfricaBrazil

CanadaJapan

FinlandUnited Kingdom

TaiwanIndia

SwedenIsraelChile

FranceSwitzerland

AustraliaColombia

Costa RicaGermany

IrelandItaly

MexicoRussiaSpain

Percentages are rounded to nearest whole number

Economic trends


Overall confidence in my home country's macro economy in the next yearEconomic trends

10% 18%-12% -8%17% 20%3% -12% 35% 3%

Percentage increase/decrease from 2013 First year surveyed

Key finding: Sweden and India are most confident in their economy, UK shows largest YoY increase.

2.87

3.853.40

3.05

4.003.57 3.62

2.68

4.08

3.153.64 3.59 3.41

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Israel Japan SouthAfrica

Sweden Taiwan UnitedKingdom

UnitedStates

Overall

Respondent’s country

2%


Overall confidence in the global economy in the next year isEconomic trends (cont.)

3.32 3.27 3.263.63

2.75 2.863.27 3.29 3.25 3.23 3.43

2.96 3.19

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Confidence in home country remains higher than global economy (3.41 v. 3.19).


13% 6%25% 1%-7% 11%2% 24% 12% 7% 11%

Regional investing


Overall confidence in investing in EuropeRegional investing

2.77 2.893.36

3.74

2.292.86

2.57 2.59

3.58

3.003.43

2.562.92

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


* YoY data unavailable

Key finding: Europe is the region with the largest increase in confidence compared to Latin America and Southeast Asia


8% 28%34% -11%2% 26% 12% 19% 20%

* *


Overall confidence in investing in Latin AmericaRegional investing (cont.)

3.69

2.472.76

2.422.86

2.17

3.383.00 3.00

3.50

2.382.82

0.00

1.00

2.00

3.00

4.00

5.00


Taiwan UnitedKingdom

UnitedStates

Overall


Key finding: Confidence is continuing to shift downward in Latin America.


-20% -8%-5% 3%-2% -20% -18% -10% -5%

*


*


Overall confidence in investing in Southeast AsiaRegional investing (cont.)

3.65

3.00

3.65

3.00

3.73

3.14

3.86 3.713.14

3.442.91

3.33

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Southeast Asia has highest confidence levels when compared to Europe and Latin America.


-15% 10%3% -13%1% -9% 2% -2% -5%

**


Country investing


3.083.42 3.38 3.33 3.33 3.14 3.00

3.26 3.23

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa United States OverallRespondent’s country

Overall confidence in investing in AustraliaCountry investing

Key finding: Confidence levels in Australia increased in 2014.


0% 1% 1% 11% 13% 8%

* *



Overall confidence in investing in BrazilCountry investing (cont.)

4.00

2.83 3.002.63

3.33 3.463.17 3.17

2.51

3.16

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa Taiwan United States OverallRespondent’s country

Key finding: Confidence in investing in Brazil continues to decrease.


-17% -9%-2% 13%-3% -12% -22% -5%


*


3.13

4.04

3.303.63

3.003.33 3.15

3.52 3.47

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa United States OverallRespondent’s country

Overall confidence in investing in CanadaCountry investing (cont.)

Key finding: Canada shows increased confidence among most countries except China.


7% -10%4% 7% 15% 9% 6%

*



Overall confidence in investing in ChinaCountry investing (cont.)

3.82

2.69

3.94

3.23 3.33

2.713.09

3.38 3.27 3.432.95

3.27

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Confidence in investing in China remained flat YoY.


-12% 9%17% -3% -10%-10% -3% 0%

** *



Overall confidence in investing in FranceCountry investing (cont.)

2.281.75

3.45

2.642.33

2.802.33

2.632.21

2.52

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa UnitedKingdom

United States Overall


Key finding: Overall confidence level in France is lowest among all countries surveyed.


-20% 4%4% -3%2% 12% 21% 12%

*



Overall confidence in investing in FinlandCountry investing (cont.)

Key finding: European countries and Japan most confident in Finland.

Footnote: 2014 was first year survey asked about confidence in Finland. No YoY trending date is available.

2.693.00

3.31

3.84

2.83

3.38

2.80

3.333.63

3.00 3.15

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa Sweden UnitedKingdom

UnitedStates

Overall



Overall confidence in investing in GermanyCountry investing (cont.)

3.283.00

3.874.20

3.17 3.12 3.07

3.89

3.083.36

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa UnitedKingdom

United States Overall


Key finding: Overall confidence in investing in Germany increases YoY.


-11% 16%-3% -1% 15% 30% 16% 13%

*



Overall confidence in investing in IndiaCountry investing (cont.)

3.13

2.42

3.362.91

3.92

2.83

3.42 3.33 3.50

2.86 2.743.08

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: India shows differing confidence levels by country.


-27% 15%15% -6%5% -8% 2% -2% -3%

* *



Overall confidence in investing in IsraelCountry investing (cont.)

3.67 3.694.00

3.36

4.004.43

3.573.29

3.713.25

3.75 3.69

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Israel is very confident in investing at home.


-7% 17%3% -2%12% 3% 6% 4%

** *



Overall confidence in investing in JapanCountry investing (cont.)

3.13

2.503.00 2.90

3.503.73

2.693.25

2.57 2.422.89

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa Taiwan UnitedKingdom

UnitedStates

Overall


Key finding: Brazil respondents show a significant YoY increase.


-9% 2%31% -11% -3%8% 3% 4% 6%

*



Overall confidence in investing in the NetherlandsCountry investing (cont.)

2.73 2.633.16

3.533.00 3.00

2.733.00 3.00 2.88 2.98

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Japan South Africa Taiwan UnitedKingdom

UnitedStates

Overall


Key finding: The view on investing in the Netherlands is neutral.


-18% 5%21% -2% 3%19% -12% 13% 6%

*



Overall confidence in investing in SingaporeCountry investing (cont.)

3.563.11

3.56 3.60 3.713.50 3.50 3.43

3.003.35

0.00

1.00

2.00

3.00

4.00

5.00


Key finding: All countries confidence levels in Singapore were above a 3.0


-15% 3%28% -6% -1%4% -3% 1%

*



Overall confidence in investing in South AfricaCountry investing (cont.)

0

1

2

3

4

5


Key finding: Overall confidence level in South Africa remains constant.


-25% 17%10% 1% -9% 6% 2%

* *



Overall confidence in investing in TaiwanCountry investing (cont.)

3.142.90

3.292.80

3.173.58

2.92

3.46

2.703.07

0.00

1.00

2.00

3.00

4.00

5.00


Key finding: Overall confidence in investing in Taiwan remains flat YoY.


-13% -13%26% -4% 23%-17% -3% 1%

*



Overall confidence in investing in United KingdomCountry investing (cont.)

3.44 3.53 3.413.67

3.292.83

3.192.94 3.00

4.15

3.25 3.35

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Confidence levels in investing in UK had the highest percentage increase YoY.


16% -7%44% 1%45% 23% 19% 18% 16%


-9% 14%


Overall confidence in investing in the United StatesCountry investing (cont.)

Key finding: Investors rated U.S. overall top country in which to invest.


5% -8%11% -8%23% 13%-2% 17% 2% 11% 6%


4.00 4.17 4.044.42 4.30

3.86 3.743.31

3.80 3.90 4.08 4.17 4.03

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Capital markets, policy and fundraising trends


Overall confidence in the global capital markets system over the next yearCapital markets

3.13 3.043.57

3.11 3.08 3.003.54

3.093.42 3.54

3.292.99 3.19

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Overall respondents are more confident in global capital markets compared to last year.


4% 24%7% 7%10% 14%0% 11% 14% 11% 12%



Overall confidence in my home country’s capital markets system over the next year

Capital markets (cont.)

2.23

3.00 3.09

2.473.00

2.43

3.88

2.97

4.17

3.543.29 3.48

3.16

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: Overall confidence is increasing, with Japan and Brazil as the exceptions.


6% 20%-22% -5%7% 22%2% 7% 24% 8% 7%


Overall confidence in my home country’s ability to enact government policies that support the domestic investment in the next year

Government policy

2.26

2.85

3.63

2.58

3.833.43 3.58

2.38 2.582.08

3.36

2.05

2.69

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: U.S. & Taiwan confidence in domestic government amongst world’s lowest.


-12% 26%-25% 0%59% -1%24% 25% 12% -6% 7%


Overall confidence in the ability of the industry in my home country to raise funds from domestic Limited Partners (LPs) in the next year

Fundraising trends

3.42

2.733.11 3.11 3.00

2.71

3.543.06 2.92 2.77

3.003.44

3.19

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall

Respondent’s Country

Key finding: United Kingdom confidence scores dramatically increase.


-11% -2%-1% 9%23% 17%19% 0% 42% 29% 17%


Overall confidence in the ability of the industry in my home country to raise necessary funds from LPs outside my home country in the next year

Fundraising trends (cont.)

2.97 2.883.40

2.953.50 3.43

3.12 3.03

4.00

2.54

3.21 3.26 3.17

0.00

1.00

2.00

3.00

4.00

5.00



UnitedStates

Overall


Key finding: UK largest percentage increase YoY.


3% 3%6% -5%17% -5%6% 4% 40% 25% 14%

Sector investing


Overall confidence in Venture Capital (VC) investing by sector (all respondents)

Sector investing

4.11 4.02 3.94 3.77 3.59 3.51 3.41 3.34 3.33 3.30 3.22 3.082.83 2.76

0.00

1.00

2.00

3.00

4.00

5.00

Key finding: Confidence in sector investing is on the rise.


0% 9%2% 14%3% 6%3% 2% 6% 9% 9%6%2% 16%


Overall confidence in Venture Capital (VC) investing by sector (U.S. respondents)

Sector investing

4.29 4.284.00 3.87

3.65 3.613.36 3.20 3.16 3.16

2.942.64 2.47 2.33

0.00

1.00

2.00

3.00

4.00

5.00

Key finding: U.S. VC investors are very confident in cloud computing, mobile and enterprise software sectors.


7% 7%6% 5%6% 9%7% 14% 3% 6% 21%12%8% 11%


Overall confidence in VC investing in the Cloud Computing/SaaS sectorSector investing (cont.)

4.31 4.12 4.273.91

4.333.86 3.91

3.50 3.603.88

4.29 4.10

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland India Israel Japan Sweden Taiwan UnitedKingdom

UnitedStates

Overall


Key finding: Cloud computing/SAAS most confident sector of all sectors surveyed.


-3% 12%8% -1%7% -3%-8% -5% 6% 2%


Overall confidence in VC investing in the Mobile sectorSector investing (cont.)

3.93 3.884.20

3.67

4.333.86 3.68

4.003.70 3.88

4.284.02

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: India shows highest overall confidence in the mobile sector.


-3% -9%4% -13%-2% 4%-4% 1% 7% 0%


Overall confidence in VC investing in the Enterprise Software sector Sector investing (cont.)

4.00 4.133.75

3.454.00

3.713.40

3.17 3.203.57

4.00 3.78

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Enterprise Software scored a 3.5 or higher in most countries.


5% 25%11% -14% 13%2% -9% 7% 2%


*


Overall confidence in VC investing in the Consumer Software sector Sector investing (cont.)

3.53 3.383.77 3.56 3.67 3.71 3.59

3.00 3.20 3.43 3.65 3.55

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Consumer Software scored a 3 or higher in every country.


-3% 1% -10%11% 13%2% -3% 6% 3%


*


Overall confidence in VC investing in the New Media/Social Networking sector

Sector investing (cont.)

2.733.13

4.47

3.223.50 3.71 3.55

2.83

3.503.14

3.61 3.49

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: China scores very high in social media.


-7% 2%0% -13% 7% 3%-5% -1%


**


Overall confidence in VC investing in the Hardware sector Sector investing (cont.)

Key finding: Low scores across the board, but expected for a mature industry.


4% 2% -3%-17% -3% 11% 9%-1%


*

2.92 3.073.42

3.00

2.29

3.05 3.172.60 2.50 2.64 2.84

0.00

1.00

2.00

3.00

4.00

5.00

Brazil Canada China Finland Israel Japan Sweden Taiwan UnitedKingdom

UnitedStates

Overall



Overall confidence in VC investing in the Semiconductor sector Sector investing (cont.)

3.172.77

3.71

2.44 2.292.56

3.003.30

2.712.33

2.76

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Overall semiconductor confidence levels are the lowest amongst all sectors.


0% 11%-27% 16% 0% 9%


** *


Overall confidence in VC investing in the Robotics sector Sector investing (cont.)

3.623.08

4.23

3.10 3.00

3.623.33

3.703.29 3.20 3.42

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: 14% increase in overall confidence compared to last year.


1%0% 3% 6% 14% 14%


* *-27%


Overall confidence in VC investing in the Energy/clean technologies sector Sector investing (cont.)

4.00

3.06

4.213.73

3.00 2.95 2.83

3.70

2.712.47

3.09

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Energy/clean tech saw an increase of 15%. U.S. ranks amongst lowest.


-9% -4% -11% 8%2% -10% 29% 15%


*


Overall confidence in VC investing in the Biopharmaceuticals sector Sector investing (cont.)

4.00

2.50

4.20

3.00 2.833.39

2.83

3.90

2.863.16 3.31

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Biopharm sees slight increase in confidence.


-11% -5% 0% 1%-6% 0% 9% 6%


*


Overall confidence in VC investing in the Medical Device & Equipment sector

Sector investing (cont.)

3.93

2.93

4.29

3.383.00

3.633.17

4.20

3.00 2.943.37

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Medical devices & equipment remains flat.


-2% -7% 8% 5% -7% 3% 2%


* *


Overall confidence in VC investing in Healthcare IT and ServicesSector investing (cont.)

4.44

3.67

4.36

3.78 3.67 3.714.09

3.50

4.10

3.503.87 3.93

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Healthcare IT saw a slight upward tick, and remains one of the most confident sectors.


7% 9%1% -1%0% 8%6% 8% 9%


*


Overall confidence in VC investing in the Financial Services sectorSector investing (cont.)

3.53 3.313.54

2.86

3.863.30

2.502.90

3.33 3.36 3.31

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Sector had a slight overall increase in confidence.


3% -7% -4% -3%29% 5% 6%


* *


Overall confidence in VC investing in the Consumer Business sectorSector investing (cont.)

3.57

2.67

3.73

2.67

3.673.40

2.33

3.403.00 3.16 3.21

0.00

1.00

2.00

3.00

4.00

5.00


UnitedStates

Overall


Key finding: Sector saw a slight increase in confidence.


-5% -2% -8% 8% 12% 6%


***


Contact information

Kevin SchimmelVC Survey ManagerDeloitte Services [email protected]+1 602 631 5947

Anisha SharmaPublic RelationsDeloitte Services [email protected]+1 917 464 3713

Ben VeghteVP of CommunicationsNational Venture Capital [email protected]+1 703 778 9292


This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte shall not be responsible for any loss sustained by any person who relies on this presentation.


About NVCAVenture capitalists are committed to funding America’s most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth. As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community’s preeminent trade association, NVCA serves as the definitive resource for venture capital data and unites nearly 400 members through a full range of professional services. For more information about the NVCA, please visit www.nvca.org.

About Deloitte’s Emerging Growth Company (EGC) practiceDeloitte’s emerging growth company practice works with innovative high-growth companies on their way to becoming the next generation of market leaders. Through our multidisciplinary approach focused on quality, our team of dedicated professionals understands the challenges that venture capital-backed companies face and offers a broad perspective on emerging issues, leading practices and industry trends. Our extensive IPO experience, across all industries, along with our experienced professionals, enables us to deliver insights that others may have missed. The practice is also home to Tech Venture Centers (TVC) in Waltham, MA and McLean, VA. The Centers are designed to create communities of leading service providers, addressing the needs of emerging, high-growth IPO bound companies and the venture capital community. For more information, please contact [email protected] or visit www.deloitte.com/us/egc.

About DeloitteAs used in this document, “Deloitte” means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

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2014 Global venture capital confidence survey results...• The 2014 Global Venture Capital Confidence Survey was conducted jointly by Deloitte & Touche LLP and the National Venture

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