Chinese Venture Capitalist Confidence Index Still High

Filed in archive VC and PE: education and training on September 28, 2005

The China Venture Capitalist Confidence Index for the second quarter of 2005, based on a July 2005 survey of 10 China and Hong Kong venture capitalists, came in at 3.55 on a 5 point scale (with 5 indicating high confidence and 1 indicating low confidence), and suggests a modest level of China based venture financings in entrepreneurial activity in the coming months, according to Mark Cannice, Associate Professor of entrepreneurship and the Founding Executive Director of the University of San Francisco Entrepreneurship Program and a Visiting Scholar of Entrepreneurship with the Hong Kong University of Science and Technology School of Business.

"I do see increasing interest by some of the Silicon Valley Venture Capitalists that I work with in establishing deeper and broader links with Chinese Venture-backed businesses. This interest sometimes takes the form of a potential source of high-quality lower cost technical talent for their Bay Area backed firms - but also as a hedge for future growth in China seed ventures. Of course, some firms have a more highly developed Asia focus while many are just now exploring the potential in China in more depth. Traditionally, most Venture firms invest primarily locally - so changing this mind set and the logistical hurdles to cross-pacific venture investing will take some more time. Still, the future looks promising for a maturing China VC industry and greater Silicon Valley involvement," claims Cannice in an e-mail interview with ChinaVentureNews.

Although his initial index reading is based on a relatively small sample of ten venture capitalists in the China region, Cannice expects that it does still shed some light on current and on-going issues in the China venture capital and high-growth venture environment. As more index readings are taken in the coming quarters, a trend of Chinese investor confidence should begin to emerge.

Venture capitalists who wish to participate in next quarter's Index survey or become involved with the Hong Kong UST or USF Entrepreneurship Program are asked to contact Professor Mark Cannice at Cannice@usfca.edu.