The recent period has changed the perspectives of many Israeli venture capitalists. The Deloitte Brightman Almagor Zohar VC Indicator Survey for the fourth quarter of 2009 reports that 91% of Israeli venture capitalists believe that M&A deals "are back on track".
It is possible to argue what "back on track" actually means, but this is unquestionably a much more positive outlook than the venture capitalists had in the survey for the third quarter. In that survey, just 8% of respondents predicted that the M&A market would recover in the next quarter, and 69% said that it would not happen before the end of 2010.
In the fourth quarter survey, respondents were also more optimistic about company values. 42% of respondents said that the value of company exits would rise in the next six months, compared with 26% of respondents in the previous survey.
During the fourth quarter, there were few impressive exits by Israeli start-ups. The biggest sales were of CopperGate Communications Ltd., Guardium Inc., and Optonol Ltd.
These exits were apparently enough to change the mood of Israeli venture capitalists, who are also optimistic about IPOs. In the fourth quarter survey, 62% of respondents believe that there will be IPOs by venture capital-backed start-ups in the next six months, compared with 70% of respondents in the third quarter survey who predicted no IPOs before the second quarter of 2010.
Despite the rising optimism, in both the surveys for the third and fourth quarters, only a minority of Israeli venture capitalists said that they would make new investments in the next six months. 65% of respondents said that they would concentrate on their portfolio companies, and only 19% said that they would lead new investments.
Published by Globes [online], Israel business news - www.globes-online.com - on January 10, 2010
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