New Delhi: World’s leading venture capitalists are cautious of investing in foreign countries, including the world’s fastest developing economies — India and China — and prefer banking on homegrown businesses, a survey says.
A survey conducted by auditing firm Deloittes Venture Capital Services found that US-based VCs are essentially dabbling in global markets, with a majority of respondents indicating that less than 5% of their capital is invested overseas.
A similar trend was seen among non-US VCs. European respondents favour European investments (67%) while Asian firms favoured Asia (78%) over the United States, Deloittes’ National Managing Partner Mark Jensen said.
“VCs say that they prefer to play globally by investing in domestic companies with significant operations offshore versus directly investing in foreign entities,” according to the 2007 Global Venture Capital survey.
Interestingly, almost half (46%) of US-based VCs currently do not intend to pursue global expansion in the next five years, and instead said they would focus at home, it said.
The survey was sponsored by Deloitte and Touche LLP in co-operation with the National Venture Capital Association in the US and numerous other venture capital associations around the world.