A new survey from Polachi Inc., a Framingham, Mass.-based executive recruiter for clean technology and venture capital firms, found that 77% of venture capital executives are more confident and optimistic about their industry today than they were a year ago.
The upbeat outlook strikes a stark contrast to the bludgeoning investors and companies in most industries have absorbed on Wall Street in the past month as investors continue to sell-off shares in the wake of disappointing employment and corporate earnings reports as well as escalating debt issues in parts of Europe.
For VC firms, the recent pullback in equities thus far hasn't been enough to dissuade them from investing in fledgling companies and adding staff in anticipation of strong growth through the rest of the year.
The survey found that 93% of venture capital executives -- of which 80% identified themselves as either partners or managing partners -- plan to hire at their portfolio companies in the second half of the year and 54% claim they are "excited" about their respective exit markets.
"Our survey reveals that there is a lot of optimism in the marketplace when it comes to deal flow and hiring at portfolio companies," Charley Polachi, a partner at Polachi, said in the report. "This is great news as small businesses and early stage companies are vital to job creation and economic growth."
VC executives were most hopeful about the prospects for companies located on the West Coast and in Silicon Valley (49% identified those regions as "hot growth" areas) while 38% said they are expecting big things from portfolio companies based on the East Coast. The survey found that VC activity and spending is definitely increasing in New York and Boston.
By industry, the survey found that 74% of respondents cited consumer Internet and Web 2.0 firms as attractive investment options, followed by Internet marketing firms (39%), enterprise software and infrastructure companies (14%) and clean technology/energy firms (12%).