Venture-backed companies must go global: E&Y

With global investment increasing for the first time since 2000, the venture capital industry is undergoing a significant period of transition characterised by increasing globalisation, a focus on capital efficiency and the return of the Internet, a report by the leading professional services provider Ernst & Young has found.

“Today, the need to go global arrives much earlier in the life cycle of any venture-backed company. Going global from the outset allows companies to access top innovative talent wherever it is found, realize production efficiencies and tap the most promising markets,” Gil Forer, Global Director of Ernst and Young’s Venture Capital Advisory Group said.

“As competition grows, regions such as China, India and Eastern Europe are impossible to ignore. The growing consumer markets of the Far East — especially China — present increased opportunities. Indeed, a China strategy has become the top issue for every venture capital firm and corporate investor as the business case for investing in China continues to grow,” he continued.

2004 was a building year in a new venture investment cycle around the globe. The continuing IPO window for venture-backed companies, successful fundraising, and increased investments — especially in the early stage rounds — are the main indicators of this new cycle.