DLA Piper Survey: 70 Percent of Tech Executives do not see current financial crisis as serious as Tech crash of 2000 — VCs disagree.

One of the most interesting findings of the DLA Piper Technology Leaders Survey was that nearly 70% of executives do not see the current crisis as being as serious as the Technology Bubble Burst of 2000.

However, 50% of the venture capital executives who completed the survey view the current crisis as worse, which is understandable given their focus on exit strategies for companies in their portfolios and the expectation that the greatest impact of the current crises will be on financings and exit opportunities.

According to Peter Astiz, Global Co-head of DLA Piper’s Technology Sector Practice, “the likely rationale among tech leaders is that although the economic slowdown resulting from the current crisis will have a negative impact on the sector, it’s more of a ‘collateral impact.’ In contrast, the 2000 bubble burst was centered in the technology sector.”



In terms of short-term operating implications, two-thirds of respondents reported that they have seen a decrease in revenue. However, the number of respondents that were reducing R&D expenses and sales and marketing expenses was 27% and 16%, respectively.

We believe this reflected confidence that the impact of the financial crisis was expected to be more temporary and that, notwithstanding lower expected revenues, most companies were still planning to invest for the future. As the crises have deepened and there has been substantial publicity about the need for venture funded companies to reduce expenses, we expect that the response to this question would be different if asked today.

Are these conclusions consistent with what you’re seeing and hearing in the marketplace? Please respond and let us know.