Equity markets data provider PitchBook joined with technology conference Web Summit to survey investor venture capital preferences as COVID-19 continues, as well as to learn their views on diversity in venture capital and the untapped opportunities to be found in tech. Just over 100 venture capital attendees at Web Summit’s November virtual conference took part in the survey, serving as a representation of the global investor community.
In terms of investment activity over half (52%) shared that they had made between 1-5 investments since the pandemic fully hit in March 2020, while 25.5% stated they had closed on 6-10 investments in the same timeframe. Over half saw little to no change from their activity prior to the pandemic, and just a mere 3.9% indicated that they have significantly pulled back on investing during this time. Almost all respondents said geopolitical events (e.g., U.S. Elections) has not impacted their investment strategy at all, while a tiny portion (2.8%) claimed it affected 75-100% of their strategy.
With the pandemic straining so many industries, respondents gave insight about how their portfolio companies have fared. Investors indicated that their portfolio companies pursuing government assistance such as PPP dropped from 34.4% in June to 17.2%. But just over 42% of respondents indicated that about 25% of their portfolio companies are still seeking government aid.
Notable is that about 25% of investors have no plans to retain capital associated with the impact of COVID-19, but just over 38% are retaining 25% of their capital and 32.4% are retaining about 50% of their capital.
In regard to areas of opportunity in the venture space 31.4% of investors said they’ve launched programs to address unrepresented and under-presented groups and 44% are actively exploring ways to increase representation.
Executive predigree as an investment factor dropped from 31% pre-pandemic to 15% but bounced back now in November 2020 to 38.2%. Other top investor factors such as disruption potential was second at 30.4%, while business model fell to tie with a pathway to profitability at 15.7% for each. AI and machine learning were listed by 36.3% of those surveyed to be at the top for having the most disruption potential, fairly unchanged. With the impact of COVID-19 in mind, investor interest gravitated to new technologies that includes digital health and healthtech, future of work, edtech, biotech, and contactless technology.
Overall, the PitchBook/Web Summit survey showed investors as having adapted to operating within the pandemic crisis, 81.4% stating that not having face-to-face access to entrepreneurs did not impact their firm in making investments.
Learn about the Diversity Term Sheet introduced to help under-represented groups in venture capital
