45% of Israeli venture capitalists believe that the confrontation with Turkey is liable to adversely affect the ability of venture capital funds to raise money, according to the Deloitte Brightman Almagor Zohar VC Indicator Survey for the third quarter of 2010. The survey is conducted among Israel venture capital fund managers and partners.
Deloitte Brightman partner and the Technology, Media & Telecommunication Industry Leader Tal Chen said, "Past experience indicate that specific tensions in the political sphere usually have no long-term dramatic effect on the high-tech economy. However, the effect of geopolitical processes on the economy is getting stronger, and it cannot be ruled out that it will be possible to see a deterioration in repercussions on the Israeli economic sphere in general and on high tech in particular."
90% of respondents believe that the boycott of Israeli goods by countries such as Sweden, Norway, and Turkey is liable to affect revenue of companies in which venture capital funds are invested. 43% of respondents expect the economy to improve, compared with 58% of respondents in the previous quarter.
The respondents believe that the difficulties and challenges affecting European markets are liable to affect venture capital funds' ability to raise money. 20% of respondents believe that the effect will be substantial. 77% of the venture capitalists believe that it will be more difficult to raise capital, most of which comes from foreign equity funds, than previously.
None of the respondents in the present survey believe that it will become easier to raise capital.
Medical devices continued to be the hottest field. 59% of respondents expect the number of deals in the sector to increase over the next six months. 57% of respondents expect the number of deals in biotechnology to increase over the next six months, and 43% expect an increase in the number of deals in cleantech.
Telecommunications and semiconductors are perceived as less attractive, with just 10% of respondents expecting an increase in deals in telecommunications and 11% expecting an increase in deals in semiconductors.
Published by Globes [online], Israel business news - www.globes-online.com - on July 5, 2010
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