VCs hit hard by economy too

October 15, 2008 4:39:21 PM PDT
The Bay Area's venture capital business also appears to be headed for tough times.

VC investors are feeling the lowest level of confidence in five years, according to a survey by the University of San Francisco.

In September, the VC confidence index fell to 2.89, its lowest level since the survey began. A score of one means least confident, five is most confident.

Despite the anxiety, the professor behind the study says a market turndown can be the best time to start a new business.

"History sometimes shows that some of the striongest and most vibrant firms are born and grow in difficult economic times," Mark Cannice said. "They tend to be leaner and if they can survive harsher times, they tend to be more successful over the long run."

Only six venture capital-backed companies have gone public this year, the lowest number since 1977.


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