Bay Area venture investors were slightly more confident in the first quarter in the sector's near- to mid-term outlook than they were at the end of last year, according to a new report.
Local venture capitalists' confidence about the next six to 18 months rated a 3.4 on a 5-point scale in the just-completed period, according to the Silicon Valley Venture Capitalist Confidence Index, which is put together by the University of San Francisco School of Management Professor Mark Cannice. That was up from 3.25 in the fourth quarter and its most recent nadir of 3.0, set in the second quarter last year.
Investors' confidence plunged in 2022 amid rising interest rates, falling public stock prices, declining startup valuations and fears of a recession. For many, their faith has started to rebound as they've started to believe that the worst is over, Cannice said in the report. That uptick in confidence came in spite of the failure in the first quarter of Silicon Valley Bank, which provided critical financing to many startups.
"Despite the startling collapse of Silicon Valley Bank ... an event that a number of (investors) expect may have a long-term impact on the venture environment, confidence in the resilience of entrepreneurs endured," Cannice said in his report.
Among the things boosting investors' confidence: valuations of been reset, making it less expensive to invest in innovative startups; many startups are working on important new technologies; venture firms are sitting on loads of uninvested capital that they can still put into startups; and mass layoffs at the big tech companies is making hiring easier for startups.
"It's never been easier to hire top talent; focused founders can use this time to attract key talent that propels their visions forward," Victoria Treyger, a general partners at Menlo Park's Felicis Ventures, said in the report.
Even so, local investors' confidence remains below its average over the last 19 years of 3.65.
Here's more Bay Area startup and investor news at the beginning of the week:
Funding rounds
- PermitFlow Inc., Milpitas, $5.5 million, Seed: Initialized Capital led the round for this provider of an online service that helps general contractors prepare and submit construction permits.
- Olyns Inc., Campbell, $4 million, Series A: Vanedge Capital led the round for this developer of electronic bottle recycling kiosks that display ads.
- Vibe, San Francisco, $4 million, Seed: AIchemy Ventures, Aglaé Ventures and P Nation invested in this provider of software for creating non-fungible tokens, or NFTs.
- Optery Inc., Clayton, $2.7 million, Seed: Bayhouse Capital led the round for this provider of a service that helps people manage access to their personal data. Global Founders Capital, Goodwater Capital, Pioneer Fund, Soma Capital, Trac and Y Combinator also invested.
- Resilinc Corp., Milpitas, undisclosed, "strategic growth": Vista Equity Partners invested in this provider of a service that helps companies assess risks to their supply chains.
Funders in the news
- Ulu Ventures of Palo Alto is raising $250 million for its fourth fund, per an SEC filing.
The Business Journal's Troy Wolverton contributed to this report. If you have funding or venture capital news, please let us know at svbjnews@bizjournals.com.
