Silicon Valley and Bay Area investors are less likely to back a startup than in the past, according to a new survey by Morgan Stanley Wealth Management
About 38 percent of investors in the region said they put money into a startup in the past. But only 23 percent said they are interested in doing that now.
Despite that sentiment, technology is the most interesting investment for locals who took the survey, with 78 percent saying that is where they would put their money. That compares to 68 percent who like biotech and 66 percent who like the pharmaceutical sector. Bay Area respondents were far more enthusiastic in all of those areas than those from the U.S. as a whole.
Bay Area residents were less inclined to invest in energy (55 percent), though, than investors from the rest of the country (67 percent).
Many reasons were given by investors for their reluctance to invest in a start-up. The biggest reason was the most obvious, fear of losing money, which 73 percent cited. About a third (34 percent) cited potential legal difficulties. Another reason cited was hurting personal or family relationships (17 percent) and fear of personal failure (16 percent).
More than half (58 percent) said they prefer to invest as part of a group rather than going solo (16 percent).
The biggest investment concerns cited by locals were increased foreign conflicts (90 percent), the U.S. economy (87 percent), government deficits (86 percent) and the financial well-being of the state of California (84 percent).
The survey involved 1,000 investors across the country and about 305 from the Bay Area were interviewed. They were all over 25 and had more than $100,000 in investable assets. About a third had more than $1 million they could invest.
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About 38 percent of investors in the region said they put money into a startup in the past. But only 23 percent said they are interested in doing that now.
Despite that sentiment, technology is the most interesting investment for locals who took the survey, with 78 percent saying that is where they would put their money. That compares to 68 percent who like biotech and 66 percent who like the pharmaceutical sector. Bay Area respondents were far more enthusiastic in all of those areas than those from the U.S. as a whole.
Bay Area residents were less inclined to invest in energy (55 percent), though, than investors from the rest of the country (67 percent).
Many reasons were given by investors for their reluctance to invest in a start-up. The biggest reason was the most obvious, fear of losing money, which 73 percent cited. About a third (34 percent) cited potential legal difficulties. Another reason cited was hurting personal or family relationships (17 percent) and fear of personal failure (16 percent).
More than half (58 percent) said they prefer to invest as part of a group rather than going solo (16 percent).
The biggest investment concerns cited by locals were increased foreign conflicts (90 percent), the U.S. economy (87 percent), government deficits (86 percent) and the financial well-being of the state of California (84 percent).
The survey involved 1,000 investors across the country and about 305 from the Bay Area were interviewed. They were all over 25 and had more than $100,000 in investable assets. About a third had more than $1 million they could invest.
Click here to subscribe to TechFlash Silicon Valley, the daily email newsletter about startups, venture and angel investors.
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