Although U.S. venture capitalists are predicting a difficult 2009, more agree that clean technology could see increased investment compared with other sectors, a new survey says.
The third annual National Venture Capital Association Predictions Survey was conducted from November 24 - December 12, 2008, and includes the predictions of more than 400 venture capitalists from across the United States.
Ninety-two percent of venture capitalists are predicting a slowing of venture investment in 2009, which is expected to reach the $29 to $30 billion range by year-end. However, most VCs surveyed predict a recovery in 2010 when the IPO market is expected to re-open and those companies and venture firms that weathered the storm will emerge strongly.
Despite lower investment predictions across all industry sectors, clean technology was viewed by the highest percentage of respondents as potentially growing this year, with 48% predicting increased investment and 20% predicting unchanged investment. The life sciences sector offered the second highest promise for investment stability and/or growth. Twenty-five percent of respondents believe biotechnology will increase and 33% predicted stable investment. In the medical device sector, 24% believe investing will increase while 38% predict stable investment. The strongest consensus for investment decline is predicted for the semiconductor industry with 79% expecting an investment drop. Media/entertainment and wireless communications investing are also expected to decline with 71% and 60% of all respondents predicting slowdowns in those sectors respectively.