The impact of the Greek debt crisis on venture capital and private equity
qodeo’s recent research into London’s VC and PE resurgence and the related uptick in the UK’s entrepreneurial economy found that the supply of funds into the sector was boosted by investors seeking high returns (versus continued, historically low interest rates, which were also increasing leverage in PE), combined with the huge inflows, now from Asia and the Gulf (as well as the traditional US sources).
As #Greece implodes will this pull down neighbouring economies as they emerge from recession? Will interest rates rise? Will investors turn away from the perceived riskier alternative asset classes and seek safer havens? Will risk aversion and negativity truncate Europe’s emergence as the next tech center? Will there be reduced exit avenues?
It will be interesting to see how the crisis pans out. Will this be #Lehman’s mark 2, or a return to economic rationality?