The survey was carried out by the polling group Populus, which interviewed 80 UK-based venture capitalists in January 2009 to gauge feelings on current market activities including investments, exits, operations and fundraising.
Now read on:
What direction do you expect total venture capital investment to trend next year compared to this year?
| Increase significantly (16% plus) | 3% | Increase: 16% |
| Increase moderately (1-15%) | 14% | |
| Stay about the same | 10% | - |
| Decrease moderately (1-15%) | 23% | Decrease: 73% |
| Decrease significantly (16% plus) | 51% |
Almost three-quarters of respondents expect total venture capital investment to decrease in 2009 compared to 2008. One-in-ten expects it to stay the same, with only 16 per cent believing it will increase. An almost identical number expect the number of venture capital financings to decrease over the same period.
Over the last 6 months, how difficult has it been to raise B and C rounds for your portfolio companies?
| Very easy | 0% | Easy: 3% |
| Quite easy | 3% | |
| Quite hard | 38% | Hard: 84% |
| Very hard | 46% | |
| Not possible | 4% | - |
| Not applicable | 10% | - |
Four-in-five respondents believe that it as been hard to raise B and C rounds for their portfolio companies over the last 6 months, with 46 per cent finding it very hard and a further 4 percent found it impossible. None thought it had been very easy and only 3 per cent that it had been easy.
How many months will your average portfolio company in the product development stage be able to survive on their current cash reserves if they do not secure the next round of financing?
| Less than 1 month | 0% | 0-6 months: 28% |
| 1-3 months | 5% | |
| 4-6 months | 22% | |
| 7-9 months | 30% | 7-12 months: 57% |
| 10-12 months | 26% | |
| 13-15 months | 7% | 13-18 months: 11% |
| 16-18 months | 4% | |
| More than 18 months | 5% | - |
How many months will your average portfolio company that is already trading be able to survive on their current cash reserves if they do not secure the next round of financing?
| Less than 1 month | 0% | 0-6 months: 20% |
| 1-3 months | 4% | |
| 4-6 months | 16% | |
| 7-9 months | 12% | 7-12 months: 45% |
| 10-12 months | 32% | |
| 13-15 months | 7% | 13-18 months: 22% |
| 16-18 months | 15% | |
| More than 18 months | 14% | - |
More than half of respondents expect their average portfolio company in the product development stage will be able to survive 7-12 months on their current cash reserves if they cannot secure the next round of financing. Only 16 per cent think they could last longer than 12 months and more than a quarter think they could not last longer than 6 months.
Respondents are more optimistic about the length their average portfolio company that is already trading could last in the same situation, with one-in-three believing they will last longer than 12 months. However, 45 per cent of members think they will last for 7-12 months, and one-fifth that they will last for less than 6 months.
When do you expect a recovery in the IPO market?
| Within 6 months | 0% |
| 6-12 months | 1% |
| 13-18 months | 40% |
| More than 18 months | 59% |
Only 1 per cent of members expect a recovery in the IPO market in the next 12 months. Three-fifths think that the recovery will take more than 18 months, while two-fifths think it will take 13-18 months.
Over the last 12 months, how does the fund raising climate compare to the previous 10 years if you are actively trying to raise a fund?
| It is much easier to raise a fund | 0% | Easier: 0% |
| It is easier to raise a fund | 0% | |
| It is more difficult to raise a fund | 15% | More difficult: 67% |
| It is much more difficult to raise a fund | 51% | |
| We did not try to raise a fund as we know it is difficult | 14% | Did not try: 26% |
| We did not try to raise a fund for other reasons | 12% | |
| None of the above | 8% | - |
In 2009, what impact will the credit crisis have on the ability of venture capital firms to raise additional funds from investors?
| A significantly adverse impact | 81% | Adverse: 98% |
| A modestly adverse impact | 16% | |
| No impact | 0% | - |
| A modestly positive impact | 3% | Positive: 3% |
| A significantly positive impact | 0% |
Members are almost unanimous in believing that the credit crisis will have an adverse impact on the ability of venture capital firms to raise additional funds from investors.
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