Venture firms expect revenue growth
The flow of venture capital - seed money for young and start-up companies - will continue to decrease in the Philadelphia area in 2009, according to a new survey. But venture professionals polled in early December expressed at least some confidence in the teeth of the recession.
The flow of venture capital - seed money for young and start-up companies - will continue to decrease in the Philadelphia area in 2009, according to a new survey of venture capitalists, entrepreneurs and their advisers.
No surprise there. In fact, the number of venture-backed companies going public is at a 31-year low, and venture investing in the philly region is expected to fall sharply this year from 2007's six-year high of $662 million.
However, unlike those of us in the fearful masses, the 311 area venture professionals polled in early December by the accounting firm KPMG L.L.P. expressed at least some confidence in the teeth of the recession.
About 70 percent of them say they expect steady or increasing revenue in 2009 from ventures already up and running - even though 80 percent also say they believe their companies' book value will decline at the same time.
"They continue to be optimists," said Brian Hughes, a leader of KPMG's Philadelphia venture capital practice.
The survey, Hughes insisted last week, reflects "some real good news," partly in that investors still see opportunity in certain industries - namely the life sciences, one of the region's mainstays, and in "green" businesses that Hughes characterized as "clean tech."
"The single sector that will see an increase in overall investing in 2008 is going to be clean tech," he predicted.
And, said Hughes, "Clearly, the people believe that, while it's going to be a tough year, at the end of 2009 and in 2010 we are going to be out of this thing - the thing, of course, being the recession.
Speaking of capital needs, the U.S. Small Business Administration has begun a series of meetings to tell local lenders about federal and state programs they can tap to provide capital to entrepreneurs and small businesses hurting for cash.
The next session, described by the agency as an "update on the Main Street credit crunch," is tomorrow at 10 a.m. in the SBA offices, 900 Market St., in Center City. Call 215-580-2726 for info.