Venture capitalists in the United States are focusing their investments more and more on opportunities outside the country’s borders, according to the 2006 Global Venture Capital Survey sponsored by Deloitte & Touche and the National Venture Capital Association.
The survey does say that a majority of venture capitalists think investments that remain within US borders tend to have higher success rates.
The survey is designed to gauge attitudes and intentions of 505 venture capitalists worldwide.
“The United States remains the primary investment target for VCs around the globe,” says Mark Jensen, national managing partner of Deloitte’s Venture Capital Services. “From a venture capital viewpoint, the perceptions of a brain drain from the United States to China and India are simply not true. The majority of VCs surveyed worldwide, including those based in the United States, still believe the United States is the best bet for entrepreneurial success.”
The survey also says that China and India are judged to be the two top countries of interest over the next five years because it is less expensive to build businesses, there is an emerging entrepreneurial culture and there is the potential for a high quality deal flow.
“India is now turning out quality entrepreneurs that rival those in the U.S.; China represents unique access to an extremely potent market,” says Mark Heesen, president of the National Venture Capital Association. “Will the distance and the differences in legal and financial infrastructure in these markets outweigh the regulatory burdens here? It is uncertain, but that’s what the industry thrives on: plenty of uncertainty and making the right strategic play.”