Global investments by US VCs lower than expected: Deloitte & Touche

The US venture capital industry is not flocking to finance the world, says the 2007 Global Venture Capital (VC) Survey sponsored by Deloitte & Touche LLP in cooperation with the National Venture Capital Association, that includes 480 venture capital and private equity firms, and other global venture capital associations around the world.

The survey's statistics revealed that while a significant number of US firms (46 per cent of those surveyed) are making foreign investments, an even greater percentage are choosing to stay at home.

Among the top reasons cited by venture firms for choosing not to invest internationally were proximity to their portfolio companies, and the belief that there are enough quality deals in the US to support their funds.

Rather, US VCs are investing cautiously in countries such as Canada, China, India and Israel. VCs say they prefer to play globally by investing in domestic companies with significant operations offshore vs. directly investing in foreign entities. Conducted in the second quarter of 2007, the survey measured attitudes and intentions of more than 500 venture capitalists worldwide.

Deloitte & Touche received 528 responses in the second quarter of 2007 from venture capital and private equity firms with assets under management ranging from less than $100 million to greater than $1 billion in the Americas, Europe, and the Middle East and in Asia Pacific.

Of the total respondents, 45 per cent were from the US; 31 per cent from Europe; 13 per cent from Asia-Pacific; 9 per cent from the Americas (excluding the US); and 2 per cent from the Middle East and Africa.