Top Israeli venture capitalists expect an increase in the number of exits, but also a worsening economic climate in the next six months, according to the VC Indicator Survey for the second quarter of 2011 by Deloitte Brightman Almagor Zohar.
37% of the respondents predict that at least ten Israeli companies will make an exit in the next six months, 16% more companies than in the first quarter survey. 60% of the respondents believe that fewer than ten companies will make an exit.
The venture capitalists mark the Internet as the hottest sector. 80% of the respondents believe that most M&A deals will be in the Internet sector, 30% more than in the survey for the fourth quarter of 2010. 34% of respondents also mentioned medical devices and 32% mentioned software as interesting sectors.
Less attractive sectors for M&A deals, according to the venture capitalists, are semiconductors (mentioned by 5% of the respondents), and biotechnology (8%).
The venture capitalists perceive the Internet as the hottest sector not only for M&A deals, but also for investment. 85% of the respondents predict that investment in the sector will increase over the next six months, and none of them believe that investment will decline. However, 33% of the respondents believe that the company values of Linked In, Facebook, Zynga, Twitter, and Groupon are higher than their real values.
31% of the respondents say that most of their new investments will be made in seed-stage companies, 16% fewer than the number of respondents in the survey for the first quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on July 11, 2011
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