Global investor confidence in the U.S. has increased significantly, thanks to favorable capital markets, abundant investment opportunities and a strong investor climate, according to the 2014 Global Venture Capital Confidence Survey from Deloitte and the National Venture Capital Association.
Investor confidence has also increased in Israel and Canada.
The survey was conducted in May and June among some 300 venture capital, private equity and growth equity investors in the Americas, Europe, Asia and Africa.
It looked specifically at investor confidence on the global venture capital environment, market factors shaping industries and investments in specific geographies and industry sectors, assigning confidence levels on a scale of 1 to 5 (most confidence).
“For the past three years, the U.S. has seen a significant increase in investor confidence, continuing the trend which began to take hold in 2012,” Jim Atwell, national managing partner of Deloitte & Touche’s emerging growth company practice, said in a statement.
“Improving capital market conditions lifted the pace of initial public offerings, fed by a strong lineup of new and innovative companies like we see on the Technology Fast 500 list, along with increased investor confidence both in the ability to fundraise as well as to achieve favorable returns on investment.”
According to the statement, venture capital fundraising has accelerated in recent quarters, with U.S. firms having raised $7.4 billion in new commitments from 78 funds during the second quarter of 2014.
This was the strongest quarter for the number of funds raised since the fourth quarter of 2007.
Venture capitalists invested $29.5 billion in 3,382 companies in 2013. Software was the leading sector, receiving 37.3% of total dollars followed by biotechnology with 15.4% of total investment.
Among first fundings, software led the way with 591 companies getting their initial venture capital rounds, some 46% of all first fundings.
In line with this, the survey found that global investors continued to invest and were most enthusiastic for less capital intensive IT-related sectors, particularly technology, mobile and cloud computing.
Less in favor were sectors requiring more capital intensive spends, including hardware and semiconductors.
U.S. respondents’ outlook on investing in U.S. opportunities scored an average of 4.17, up 41 basis points from 2013, according to the survey.
At the same time, U.S. confidence in global capital markets rose from 2.70 in 2013 to 2.99 in 2014.
Emerging markets continued to decline among global investors.