Tuesday, October 28, 2008

WTIA: Lower Earnings, Valuations In Wings

The Washington Technology Industry Association (WTIA) is predicting lower near-term revenue growth and shrinking deal valuations for local companies, according to its latest Venture Capital Outlook Survey. The WTIA said that its survey for the latest quarter shows that local VC firms are concerned about the economy, finding that 76 percent of VCs see national business conditions as one of the top challenges facing their portfolio companies. Among other findings: revenue growth for companies are expected to be lower in Q4 by those VCs, deal valuations are expected to go down, and hiring is expected to slow down at their portfolio firms. Those results--released this morning--go to bolster the gloom and doom following the high tech industry as it begins to be impacted by the overall economy. To top off the gloominess, the WTIA said that its VCs do not expect any exits in their portfolio in Q4. The grim results are a rapid change from numbers from earlier quarters: just last quarter, the WTIA's survey showed that 57 percent of VCs expected hiring increases in the quarter; today, just 13 percent expect to increase hiring, with 75 percent expecting no growth in their hires.