Survey Report | December 2016

1st Annual Private Tech Investor Survey

Highlights From SharesPost’s 1st Annual Private Tech Investor Survey

We are pleased to announce the results of SharesPost’s first private tech investor sentiment survey. Over 600 accredited individual and institutional tech investors let us know their expectations for the new year. Survey participants represented a wide range of private and public market investment styles. Although such surveys admittedly have a degree of sampling bias, the results were surprisingly consistent. In short, investors of all types are predominantly bullish about the prospects for tech companies in 2017.

Key highlights include:

#1. Bullish prospects for Private Tech company valuations

49% of investors surveyed think private company valuations would increase in 2017 (vs. 28% of investors expect valuations to decrease). This clearly implies a bullish sentiment among investors towards private tech companies, particularly given the downward valuation correction we witnessed through much of 2016. We note that the bullbear gap for private tech companies is a bit narrower versus the corresponding gap for public market performance expectations. Slicing the survey data by investor category, we observed that high net worth investors were marginally more bullish about the private market’s upside in 2017 than institutional investors.

#2. There is a greater enthusiasm for Small/Mid-Cap Tech companies

We asked survey respondents their preference between Public Large Cap Tech, Private Large Cap Tech, Public Small/Mid-Cap Tech, Private Small/Mid-Cap Tech, and Early/Seed investments. 29% of the surveyed investors chose Private Small/Mid-Cap Tech followed by 25% of investors believe that Public Small/Mid-Cap Tech companies would provide best returns over the next 12 months. Interestingly, we observed a greater bias among institutional investors towards the Small/Mid-Cap asset classes. In other words, 38% of surveyed VC/PE investors prefer SMID private tech companies and 43% of public equity investors prefer SMID public tech companies.

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