According to at least two recently published surveys, the answer is yes.
National Venture Capital Association/Dow Jones Venture Source Survey
In a recent survey by the National Venture Capital Association and Dow Jones VentureSource, a majority of U.S. venture capitalists stated they are optimistic for 2011 and plan to expand investments generally. The survey involved 330 venture capital respondents polled from late November through early December. Fifty-one percent of VCs and fifty-eight percent of company CEOs polled said they expect more venture capital investment in 2011. A n additional quarter of each group expects investment to at least remain level with 2010, while 24 percent of VCs and 14 percent of CEOs predicted a decline.
”The market was so troubled in 2009, the sentiment was that things had to get better in 2010,” says NVCA President Mark Heesen. “It turns out our predictions were correct, and in the past year we have moved beyond the financial crisis and returned to doing what we do best — building great companies. The improving exit market and a renewed excitement in the IT sector have engendered a confidence among VCs and the CEOs of the companies in which we invest that promises to propel the startup community forward in 2011.”
The top three areas of growth identified by the NVCA/Dow Jones VentureSource survey were consumer Internet and digital media, cloud computing, and healthcare information technology. Survey respondents expect investments in health IT to rise by 77%. By contrast, comfort with investments in medical devices and pharmaceuticals appeared split, with even percentages of VCs expecting financing to rise, fall and stay the same. This discomfort is likely in part due to the uncertainty now surrounding the timeline for devices to reach market.
Pepperdine University Center for Applied Research Survey
The optimistic outlook from the NVCA/Dow Jones VentureSource survey is similar to that provided by blogger Dave Lavinsky. Citing results from a Pepperdine University’s Center for Applied Research survey from mid-December polling 213 venture capitalists, Lavinsky reported the following:
* Venture capitalists expect to offer their investors an average return of 15% over the next 12 months, compared with only 5% for the past 12 months, likely due to an expected increase in acquisitions of VCs’ portfolio companies.
* Over 40% of VCs are currently raising more money or expect to raise more money to fund entrepreneurs within the next 1-2 years.
* 43% of venture capitalists expect general business confidence to improve in the next 12 months.