VC Investors Staying Close to Home
Venture capital firms are targeting their investments close to home, according to this year’s Global Venture Capital survey from Deloitte Touche Tohmatsu.
Only about half of the venture community has made a commitment to a global investment strategy and even those firms are implementing that strategy slowly and cautiously, Deloitte says. The survey compared the views of investors from Europe, Asia and North America, and found that a flow of higher quality deals and lower additional risk keep investments close to home.
The intentions for growth of foreign investment are modest at best, with the venture community closely split on whether to embark upon a global investment strategy at all.
Key findings of the survey:
- 51% of global respondents currently are investing outside of their home country, with the greatest percentage doing so coming from European respondents (63%), followed by APAC countries (58%), and the US. (46%).
- Most respondents indicated they had fewer than five deals outside of their home country.
- Of the 51% of investors currently investing globally, 83% plan to expand their investments in the next five years. Of the 49% of investors currently not investing globally, 67% have no plans to invest globally in the next five years.
- Among US investors, 54% indicated that they would be expanding their investment focus outside of their home country or region in the next five years, compared with 53% in 2006. The enthusiasm was slightly higher among non-US respondents, growing to 61% this year from 58% last year.
- VCs see intellectual property protection as one of the biggest challenges. China is, by far, the most frequently cited country in which VCs identify financial risk in this area, followed by India.
The 60-page Global trends in venture capital 2007 survey can be downloaded at no charge from Deloitte’s website.
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