More than half of venture capitalists (52.9%) believe that their industry is “broken,” according to a survey conducted by executive search firm
Moreover, the survey also found that despite increasing indications from the Obama administration that the recession is lifting, nearly 60% said that they are less confident in the VC industry today than they were six months ago. Framingham, Mass.-based Polachi said that 139 senior executives at VC firms nationwide participated in the survey, which was conducted in June. Nearly 44% of the respondednts, or 59, are based on the West Coast or in Silicon Valley.
“These survey results validate a cautious sentiment we have been observing for some time now in the VC industry,” said Charley Polachi, a partner at Polachi.
However, Jason Mendelson, a managing director of the
“We are talking about an asset class in which each fund has a 10-year to 12-year life span,” he wrote. “We are also talking about an industry that has proved its best returns are usually made on companies invested into during a down economic cycle. Why shouldn’t we be excited about today?”
Similarly, Fred Wilson, a partner at
“The problem with the VC industry is that there is too much money in it…and a tepid exit environment,” Wilson wrote on his blog. “Nothing is wrong with the VC business and the startup ecosystem that a few years of weak fund-raising can’t fix.”