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US venture industry exhibits cause for optimism, survey says

The US venture industry exhibited some cause for optimism in the fourth quarter of 2003 according to the PricewaterhouseCoopers MoneyTree Survey, compiled in conjunction with Thomson Venture Economics and the National Venture Capital Association. A total of $4.9bn was invested in 679 companies, up from $4.4bn in the previous quarter.

‘There are good reasons for optimism on the part of entrepreneurs and venture capital firms alike,’ said Tracy Lefteroff, global managing partner of the venture capital practice at PricewaterhouseCoopers. ‘Investment levels are both stable and sufficient. The public markets, IPOs and M&A activity are all on the upswing. It’s an environment where good ideas, hard work and venture-backing can grow into profitable businesses.’

For full year 2003, venture investments totalled $18.2bn, a decline of 15 per cent from 2002’s $21.4bn. But this decline is small compared to the decline seen over the previous three years and the relatively consistent levels of quarterly investment throughout 2003 suggest that venture capital is settling out at a comfortable and sustainable level.

‘Venture capitalists are feeling more confident about the future’ said Mark Heesen, president of the National Venture Capital Association. ‘Commercial IT users are beginning to buy again and exit avenues are opening. Opportunities are presenting themselves in a variety of sectors, and venture capitalists are finding talented, dedicated management teams to build sustainable businesses. Nevertheless, venture capitalists remain selective as they responsibly deploy their investors’ money.’

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