While there are concerns regarding the shortfall of funds that would go into the venture capital industry, venture capitalists still hold a rosy outlook for startup firms seeking to raise money this year, the news website of U-T San Diego reported. This was according to the message of the San Diego Venture Group in its 2014 Outlook conference where experts predict that the IPO market will remain robust. The forecast even extends to the capricious life sciences sector, a segment which is particularly important to San Diego, the report said.
The encouraging forecast came after the 7% increase of venture capital investing across the US last year which amounted to $29 billion, the report said.
However, financing for young firms in San Diego has fallen behind. Startups were able to raise $757 million, representing a 34% decrease from the year before and the lowest amount gathered in ten years, the report.
San Diego Venture Group President David Titus, who is also a Windward Ventures Partner, said that the drop can be blamed to lesser late-stage deals. These deals are usually much larger than fundraising for the early stages.
Titus said that last year, there were eight local life sciences firms that held their debuts, signifying that additional venture capital was not needed. These funds would have bolstered the total of San Diego. He added that young startups are still luring capital as evidenced by the steady money that flowed into early stage firms last year, the report said.
The report said venture capitalists believe that there will be a lot of money in store in 2014. They also forecast strong investor demand for IPOs of life sciences and technology firms.
Frazier Healthcare's Carol Gallagher was quoted as saying, "Around the IPO market, we are going to continue to see that being robust for life science, though I'm not sure we are going to see the volume - the number of companies - go out this year that we did last year." Frazier Healthcare supports biotech companies, the report said.
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