Most investors believe valuations of private tech companies will go up and investor sentiments in mid-2017 is higher than at the end of 2016, a report by SharesPost says. The good news for private technology companies is that investors still prefer their shares, expecting more tech unicorns to emerge during 2017. Tech investors are also willing to buy public small-cap stocks, neglecting public companies like Snap which recently saw their stock price drop as much as 33 percent below its March IPO price.
A growing number of investors are of opinion that trading private shares on the secondary market is lucrative at this time. Unsurprisingly, investors prefer tech industry sectors such as big data, security, virtual reality, augmented reality, and fin-tech.
The majority of of the surveyed investors (71 percent) prefer to invest in small companies. Those include private or public small-/mid-cap companies or early-stage companies. As a whole. 73 percent of the respondents prefer smaller tech companies. Institutional investors are more keen to put their money into small-/mid-cap asset classes as well.
Overall, 68 percent of investors are confident private company valuations will rise over the next 12 months. Only 15 percent think valuations of private companies will go down during the period.
Investors are evidently more willing to bet on private tech companies over the next 12 months after a good number of publicly traded tech companies failed to deliver to expectations in the past several months.