Venture capitalists from around the world say the current level of IPO activity is too low to support the health of the venture capital industry in their respective countries, a new report has revealed.
According to the 2011 Global Venture Capital Survey sponsored by Deloitte and the National Venture Capital Association, venture capitalists in the US, China, Brazil, India and France found it most important to have an active IPO market in their home countries, followed closely by the UK, Canada, and Germany.
In the US, where there has been a large and active venture capital and entrepreneurial community for many years, 91% of venture capitalists deemed the IPO market a critical element of the US venture capital industry.
More than 80% of global venture capitalists surveyed stated that current IPO activity levels in their home countries are too low.
The survey, conducted annually, reveals that venture capitalists believe high returns generated by IPOs are critical in providing superior returns to limited partners and growth capital to developing portfolio companies.
Globally, 87% of respondents selected Nasdaq as one of the three most promising stock exchanges for venture-backed IPOs; 39% selected the New York Stock Exchange (NYSE), and 33% cited the Shanghai Stock Exchange.
The vast majority of venture capitalists around the world still look to the US exchanges to provide a healthy and vibrant market, yet 87% of US venture capitalists believe that the current level of IPO activity is too low.
The survey also shows a tremendous amount of excitement around IT, healthcare services and clean tech innovation globally.
Approximately 69% of respondents cited a surge in investment in cloud computing, while 65% plan to increase investment in social and new media.
Clean technology remains attractive with 62% of respondents planning to increase investments in this area and an additional 26% planning to maintain their levels of clean tech investment.
In China and India, there is considerable interest in both biopharmaceuticals and healthcare services.