The Deal
Sunday, November 22, 
1:19 am

Immeasurable Confidence

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800px-Flag_of_the_People's_Republic_of_China.svg.pngThe Entrepreneurship Program at the University of San Francisco has been tracking the much-hyped but toughtoquantify Chinese venture capital market with a China Venture Capitalist Confidence Index since the second quarter of 2005, and has measured jitters in the global economy driving the index down. Confidence in the second quarter registered 3.65 on the organization's 5-point scale, down from 3.86 in the prior quarter, based on expectations over the next 18 months.

Mark Cannice, a USF professor and creator of the index, said concerns over valuation and regulatory uncertainty are the principal concerns of those whose faith in Chinese venture opportunities is waning, but most participants in the study still have overall positive views on opportunities, and he notes that any dropoff in confidence has not been matched by slowing deal flow.

Cannice notes that venture funds from outside China accounted for about 75% of investment in the quarter, and nearly 90% of funds raised, and he said the high level of foreign capital funding suggests that the Chinese venture market is making strides in conforming to international investment standards. - Clifford Carlsen


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