Polachi Survey Reveals More Than Half of Venture Capital Execs Consider the Industry to Be "Broken"

Results Validate Recent Calls for Right-Sizing in the VC Industry

FRAMINGHAM, Mass.--(BUSINESS WIRE)--Polachi Inc., a provider of Access Executive Search™ services to technology, clean technology, private equity and venture capital companies, today issued the results of an online survey which polled over 100 venture capital executives—70% of which were Partners or Managing Partners. Seeming to support recent reports that the VC industry needs to be right-sized, more than half (52.9%) of the executives indicated their industry was currently “broken.”

“Reduced funding from investors and depressed exit prices are changing venture capital”

The survey also found that despite increasing indicators from the Fed that the recession is lifting, nearly two-thirds (59.9%) of the respondents revealed they are less confident about the state of the VC industry today than they were six months ago.

“These survey results validate a cautious sentiment we have been observing for some time now in the VC industry,” said Charley Polachi, Partner at Polachi, Inc. “While we certainly acknowledge that somewhat of a reset is needed, we also believe venture firms play a critical role in the development of new technologies and start-ups, which are vital to the economy for growth.”

When asked to identify which functional trends they were most concerned about, nearly all (92.7%) of the executives indicated they were either “worried” or “most worried” about the uncertain return of exit markets. Also found to be of concern was syndicate risk, with 69% of the respondents expressing some degree of worry over the “ability of syndicates to hold together.”

“Reduced funding from investors and depressed exit prices are changing venture capital,” said Paul Margolis, Partner at Longworth Venture Partners. “As long as these trends continue, VCs will need to be more efficient with capital and find ways to get acceptable returns at lower exit prices.”

When asked about the hottest growth areas in the VC industry, Cleantech/Energy received the highest response (62.8%) followed by Consumer Internet/Web 2.0 (44.2%) and Internet Marketing (40.1%).

The survey also found executives to be split down the middle when it comes to which geographical region currently represents the area of hottest investment opportunities; 40.7% indicated the east coast and 43.7% indicated the west coast/Silicon Valley.

Developed and administered by Polachi, the survey was distributed this month and completed by a total of 139 senior executives at venture capital firms throughout the United States.

About Polachi, Inc.

Polachi, Inc. (www.polachi.com) provides Access Executive Search™ services to technology, clean technology, private equity and venture capital companies. The firm’s partners, all search industry veterans with decades of experience, understand that leading companies deserve access to the absolute best talent on the planet. While traditional executive search firms limit candidate access due to “off-limits” protocol, and newer search firms lack the breadth and depth of connections, Polachi’s Access Executive Search™ model, coupled with unmatched agility, delivers the most accelerated results. Polachi is a sponsor of the New England Clean Energy Council (NECEC) as well as a founding member of Access Search Partners™ (ASP), a partnership of five leading technology search firms that provides clients with specialist search services on a global scale. For more information about Polachi please call 508-650-9993 or visit www.polachi.com.