Deloitte VC Industry Survey Supports Merar’s Smart Choice of Geographical Focus (Part 1)

Doing business in emerging markets is no longer just an option. It is a must, given the lackluster expectations of western VC firms about growth in their home markets. Merar, with its emerging-market focus, is serving this wave of investor interest that will keep washing around the world in the coming decades.

The 2010 Global Venture Capital Survey of Deloitte and the National Venture Capital Association (NVCA) projects a lackluster performance for the VC industry in the West. The survey, which measures the opinions of over 500 venture capitalists worldwide, shows that 92% of US VC firms expect the number of venture firms in the States to fall in the next five years. Respondents in France (83%), Israel (80%), the UK (70%) and Canada also expect a similar outcome for their countries by 2015.

The main reasons for the lack of optimism among US venture capitalists is the weak IPO market  and difficult exits in recent years (88% of respondents), unfavourable tax  policies (59%) and the unstable US regulatory environment (53%). A total of 56% of US VCs expect that their limited partners will be less willing to invest in US venture capital funds in the future.

The same expectations about investing in their home country are shared by 89% of respondents in France, 61% in the UK, and 44% in Germany.