A recent survey reveals that even venture capitalists are concerned there’s too much capital in the private markets.
For the third quarter of 2019, the The Silicon Valley Venture Capitalist Confidence Index – a quarterly undertaking that has been conducted by Mark Cannice of the University of San Francisco for the past 15 years – index registered 3.58 on a 5 point scale (5 indicates high confidence, 1 low).
To Cannice, the decrease in sentiment is partly due to concerns “on lofty valuations due to a continuing enormous supply of capital being made available to new ventures as more mega funds ($500M or more) are being established.”
Menlo Ventures Partner Venky Ganesan wrote that the private markets have been fueled “by the availability of cheap capital and the surge of new entrants to private investing.”
Cannice concluded his report by writing “With new sources and unprecedented amounts of capital being made available to new ventures and evolving expectations of public markets for venture-backed firms in terms of paths to profitability, it could be argued that the venture industry is itself in the midst of a transformation.”