Venture capital investors and venture-backed CEOs are feeling optimistic about 2014 according to survey

By VCPOST Staff Reporter

Dec 20, 2013 06:55 PM EST

Venture capitalists and CEOs of venture-backed companies are showing a mix of greater optimism, confidence and measured concern for the venture ecosystem in 2014 according to the results from this year's Venture View predictions survey conducted by the National Venture Capital Association (NVCA) and Dow Jones VentureSource.

While the market challenges of the past couple of years still linger, respondents predict that 2014 will bring improvements across several fronts, including greater IPO volume for venture-backed companies, greater employment opportunities at startups, and improved returns to limited partners. However, both CEOs and VCs are skeptical that the federal government can pass legislation to address several issues critical to the vibrancy of the startup ecosystem.

Overall, both groups expect greater IPO (initial public offering) volume for venture-backed companies, greater job opportunities at startups and improved returns on investments.

Government assistance is one area that VC firms and startup executives feel less positive about. The survey found that they are skeptical that the federal government can pass legislation to help the startup ecosystem, such as immigration inform.

"With a gridlocked Congress, it is imperative that we continue to educate lawmakers and regulatory agencies on the positive impact of venture capital to the U.S. economy and the unique attributes that make our startup ecosystem the envy the world. Case in point - immigration reform. We cannot allow the politics of the broad immigration reform issue to overshadow the line item we are focused on - immigrant entrepreneurs and the creation of a new type of visa to support them," said Bobby Franklin, president and CEO of the National Venture Capital Association. "With our members and venture-backed CEOs expressing a bit of optimism for 2014, we must ensure that the positive momentum continues so that innovative technologies get funded, job growth continues, pension funds, university endowments and other limited partners see returns on their investments, and VCs are incentivized to take the risks no other asset class takes."

Here are some highlights from the survey of nearly 300 venture capitalists and startup CEOs:

- 59 percent of VCs and 57 percent of CEOs predict higher levels of venture investment in 2014.

- Investment increases are expected in business IT, consumer IT and healthcare IT.

- 69 percent of CEOs plan to raise funding in 2014.

- 31 percent of CEOs expect it will be easier to raise money than in 2013, while 55 percent said it will be the same as 2013.

- 50 percent of CEOs and 49 percent of venture capitalist investors are optmistic about next year's exit market.

- 75 percent of VCs expect improved returns in 2014. 

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