Venture capitalists are now less optimistic about the entrepreneurial atmosphere in Silicon Valley over the next 6 to 18 months, according to the Silicon Valley Venture Capitalist Confidence Index, which reported its first drop in confidence in more than a year.
Based on a June survey of 32 Silicon Valley VCs, the index (PDF) dropped to 3.28 on a 5-point scale (1 indicating low confidence and 5 indicating high) for the second quarter. The latest number showed a decline from the first quarter's mark of 3.65 and ended a five-quarter rise in confidence after hitting a low at the end of 2008.
The downturn in confidence was sparked by concerns over sluggish economic growth in the U.S. and abroad as well as regulatory uncertainty in the VC industry, according to the index.
Several of the venture capitalists interviewed for the survey believe the still struggling economy may dampen investments, with one VC noting that the industry is basing its long-term investments more on short- and medium-term worries. Two VCs also said that fear is growing over the fragile economies in Europe and China and that both markets need to be watched for any impact they may have on business opportunities over the next year.… Read more