If the venture capitalists of the Silicon Valley act as a bellwether for the venture community in the U.S. and the globe, then the latest Silicon Valley Venture Capitalist Confidence Index shows that VCs the world over are not happy campers of late. The index for Q4 2008, based on a January 2009 survey of 33 San Francisco Bay Area venture capitalists, registered 2.77 on a 5 point scale (with 5 indicating high confidence and 1 indicating low confidence), it’s lowest score ever. The intent of the index is to measure and report the opinions of professional venture capitalists in their estimation of the high-growth venture entrepreneurial environment in the San Francisco Bay Area over the next 6 to 18 months.
The index reached it’s highest point in the second quarter of 2007, unsurprisingly when times were good and the credit crunch was not yet in a reality. However, the 6 to 18 months following Q2 ’07 were anything but spectacular for the VC community which goes to show that the level of confidence at a given moment isn’t always an accurate portent of things to come.
The index is compiled by Mark Cannice at the University of San Francisco’s School of Business and Management.