Venture capitalist confidence dips in Q1

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Silicon Valley venture capitalists' confidence declined slightly in the first quarter of 2015, according to the Silicon Valley Venture Capitalist Confidence Index.

From 3.93 last quarter, the overall confidence has slumped to 3.81 out of 5, which is still higher than the 11-year average of 3.72, according to the report released Tuesday.

The main reasons for the dip are increasing concerns about overvaluation in some venture-backed firms, along with the growth in alternative financing sources.

For perspective, Q1 2015 had the highest level of venture funding in 15 years.

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While there was still momentum among the software sector and expansion stage with the highest levels of venture capital investments in Q1 2015, the number of IPOs and M&As of venture-backed firms as well as the number of new venture funds dipped, according to the report.

Despite the low confidence, investment companies displayed continued confidence in the near-term entrepreneurial environment for most of the responding venture capitalists, according to the report.

The research, compiled by University of San Francisco professor Mark Cannice, surveys 33 venture capitalists in San Francisco Bay Area/Silicon Valley.

The Silicon Valley Venture Capitalist Confidence Index measures and reports the opinions of professional venture capitalists on their estimations of the high-growth venture entrepreneurial environment in the San Francisco Bay Area over the next six to 18 months.

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