The poll, sponsored by Deloitte Touche Tohmatsu (DTT) and the European Private Equity and Venture Capital Association in Europe (EVCA), compared the views of investors from Europe, Asia and North America, and found that a flow of higher quality deals and lower additional risk keep European investments close to home.

The survey revealed that 51% of European venture capitalists' strategies clearly demonstrate a preference for having some kind of physical proximity to their portfolio, in order to work more effectively with management.

This proximity also assists the venture capitalists in determining the attitudes of the local cultures, which can be instrumental towards the success of their investment. Further, of the VCs that are investing abroad, 48% have developed strategic alliances with a foreign-based firm.

"European VCs predominantly focus on local investment, including those that can potentially provide global opportunities," explained Igal Brightman, global managing partner of DTT's Global Technology, Media & Telecommunications Industry Group. "They want the local contact with management, as familiarity with local culture maximizes the success of their investment."

The 51% of European VCs preferring physical proximity have one or two international investments, according to the survey results.

However, 24% have three to five foreign investments, 12% have six to ten foreign investments, and 10% have sixteen or more investments abroad in their portfolio.

The survey further revealed that 86% of European respondents said that at least some part of their portfolio has significant operations - manufacturing, research and development, engineering, or back office - located outside the country in which their companies are based.

These numbers are higher than those for surveyed VC investors in the United States, although nearly nine in ten of US respondents this year reported twice as many of their portfolio investments in domestic businesses with significant operations outside of the United States, as compared to last year's survey.

The primary reason European VCs look to expand their investments globally, when they do, is to take advantage of higher quality deal flow. Access to quality entrepreneurs and to foreign markets, such as China and India, (both 21%) also make the US an attractive target for expansion.

The study also revealed that VCs see intellectual property protection as one of the biggest challenges. China is, by far, the most frequently cited country in which VCs identify financial risk in this area. Among European VCs, 59% identify China as having IP laws that create additional financial risk. India was next with 16%.

"When it comes to other investors around the world looking at Europe and the risks involved in different regions on the continent, the number of VCs who identified problems were fairly low across the board," explained Georges Noel, EVCA director and head of the association's venture capital platform.

"For example, Central and Eastern Europe's greatest challenges tended to be in the areas of lack of quality deals that fit the investment profile, according to 13 percent of European and US investors, and both have difficulty achieving successful exits and lack of experienced local investors."

The UK and Ireland drew even fewer responses in the various risk areas, and investors looking at France, Italy, Monaco, Portugal, and Spain were not especially discouraged, regardless of the issue.

Altogether, this year's survey demonstrates that for VCs around the world who are looking at European countries as investment targets, it is more a question of the right fit than of any specific issue that would create additional risk.

Helmust Schühsler, EVCA chairman, concluded:

"Target industries are increasingly international, and in order to follow the opportunities we need to broaden our approach to deal making. European VCs are well equipped to handle the challenges of globalization due to the cross-border experience they gained from deal making within Europe. With various business cultures and languages found in Europe, European VCs have a lead in building such teams, well fit for the complex world around us, flat or not."