The National Venture Capital Association polled 400 venture capitalists about what they expected from the 2009 investment environment. If 2008 was a rough year for venture capital, 2009 could be even worse. Almost all venture capitalists (96 percent) said it will be harder for new companies to get funded in 2009. The poll found that many VCs anticipate a slowdown in early stage investment, due to the closed exit market and a lack of money at VC firms to invest in new projects. Seventy-two percent of those polled don't expect the IPO market to improve in 2009--at best, 18 percent think the situation to ease up in the fourth quarter of 2009.
Outside the U.S., respondents expect to see investment decline in every major foreign region. Europe will be the hardest hit. Israel, India and China will also see a decline in investment.
There is some good news for the biotech industry. Respondents said that, after clean tech, the life sciences sector offered the highest promise for investment stability. Twenty-five percent also said biotech investing will increase, while 33 percent expect a stable investment environment.
Finally, the majority of VCs say that while 2009 will be difficult, the IPO market will open up in 2010. Companies and venture firms that survived the hard years will be stronger for it. "2009 will be a year of anticipation for the venture capital industry as the economic turmoil will engender a fair amount of Darwinian change," said NVCA President Mark Heesen. "The recession and shuttered IPO market will place tremendous pressure on portfolio companies to tighten their belts and re-tool where necessary."
- see the NVCA's release
- here's the Financial Times articles