VCs prefer homeland over India, China
Leading venture capitalists prefer banking on homegrown businesses rather than India, China.
By PTI |
NEW DELHI: World's leading venture capitalists are cautious of investing in foreign countries, including the world's fastest developing economies - India and China, and prefer banking on homegrown businesses, says a survey.
A survey conducted by auditing firm Deloittes Venture Capital Services found that US-based VCs are essentially dabbling in global markets, with a majority of respondents indicating that less than five per cent of their capital is invested overseas.
A similar trend was seen among non-US VCs. European respondents favour European investments (67 per cent) while Asian firms favoured Asia (78 per cent) over the United States, Deloittes' National Managing Partner Mark Jensen said.
"VCs say that they prefer to play globally by investing in domestic companies with significant operations offshore versus directly investing in foreign entities," according to the 2007 Global Venture Capital (VC) survey.
Interestingly, almost half (46 per cent) of US-based VCs currently do not intend to pursue global expansion in the next five years, and instead said they would focus at home, it said.
The survey was sponsored by Deloitte & Touche LLP in co-operation with the National Venture Capital Association (NVCA) in the US and numerous other venture capital associations around the world.
The survey found that although a little wary, US-based VCs would like to invest in China, India, Israel and Canada than the other regions.
Of these four preferred destinations, Israel, China, and India are cited for high-quality deal flow while India and China are attractive due to their emerging entrepreneurial environments, it said.
Interestingly, the fact that China and India are lower-cost locations appears to be a secondary consideration, it added.
China was preferred as the country of choice for manufacturing and India scored its points for better Research and Development (R&D) and engineering services.
Foreign VC investments trend in China and India have declined from last year. The reason behind this dip was the concern about lack of intellectual property laws in China while for India, it is the lack of deals that fit the VCs investment profile.
Deloitte received 528 responses from general partners with assets under management ranging from less than 100 million dollar to greater than one billion dollar. The survey was conducted in the second quarter of 2007.
Of the total number of respondents, 54 per cent were based in the Americas, 31 per cent in Europe, 13 per cent in Asia Pacific and 2 per cent in the Middle East.
A survey conducted by auditing firm Deloittes Venture Capital Services found that US-based VCs are essentially dabbling in global markets, with a majority of respondents indicating that less than five per cent of their capital is invested overseas.
A similar trend was seen among non-US VCs. European respondents favour European investments (67 per cent) while Asian firms favoured Asia (78 per cent) over the United States, Deloittes' National Managing Partner Mark Jensen said.
"VCs say that they prefer to play globally by investing in domestic companies with significant operations offshore versus directly investing in foreign entities," according to the 2007 Global Venture Capital (VC) survey.
Interestingly, almost half (46 per cent) of US-based VCs currently do not intend to pursue global expansion in the next five years, and instead said they would focus at home, it said.
The survey was sponsored by Deloitte & Touche LLP in co-operation with the National Venture Capital Association (NVCA) in the US and numerous other venture capital associations around the world.
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The survey found that although a little wary, US-based VCs would like to invest in China, India, Israel and Canada than the other regions.
Of these four preferred destinations, Israel, China, and India are cited for high-quality deal flow while India and China are attractive due to their emerging entrepreneurial environments, it said.
Interestingly, the fact that China and India are lower-cost locations appears to be a secondary consideration, it added.
China was preferred as the country of choice for manufacturing and India scored its points for better Research and Development (R&D) and engineering services.
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Foreign VC investments trend in China and India have declined from last year. The reason behind this dip was the concern about lack of intellectual property laws in China while for India, it is the lack of deals that fit the VCs investment profile.
Deloitte received 528 responses from general partners with assets under management ranging from less than 100 million dollar to greater than one billion dollar. The survey was conducted in the second quarter of 2007.
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Of the total number of respondents, 54 per cent were based in the Americas, 31 per cent in Europe, 13 per cent in Asia Pacific and 2 per cent in the Middle East.
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