Fenwick & West's San Francisco Bay Area Venture Capital Survey Shows Continued Improvement in Valuations in Fourth Quarter of 2007

Up Rounds Exceed Down Rounds for 16th Consecutive Quarter

March 5, 2008 (Mountain View and San Francisco, CA) - Business Wire - Fenwick & West LLP, one of the nation's premier law firms providing comprehensive legal services to high technology and life science clients, today announced results of its Fourth Quarter 2007 San Francisco Bay Area Venture Capital Survey.

The survey analyzed the valuations and terms of venture financings for 103 technology and life science companies headquartered in the greater Silicon Valley/San Francisco Bay Area which reported raising capital in the fourth quarter of 2007.

"The results show continued improvement in venture valuations," said Barry Kramer, partner in the firm and co-author of the survey. "The Fenwick & West Venture Capital Barometer™ showed a 55% average price increase for companies receiving venture capital during the quarter compared with the share price of their previous financing round."

"However, the amount by which valuations increased was lower in the fourth quarter than in the prior quarters of 2007," he said. "For the prior three quarters of 2007, the average price increase for companies raising funds compared to their prior round was 75%."

Michael Patrick, survey co-author and also a partner in the firm, pointed out that up rounds exceeded down rounds for the 16th consecutive quarter.

"Up rounds exceeded down rounds 69% to 22%, with 9% flat," said Patrick. "For the prior three quarters, however, up rounds on average outpaced down rounds by a bit larger amount, 80% to 11%, with 9% flat."

An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company's prior financing round.

As reported by Dow Jones VentureSource, aggregate venture investment in the U.S. during the quarter was $7.3 billion.

"Although this amount was approximately 5% less than the amounts invested in the third and second quarters and essentially flat with the first quarter, 2007 saw the largest amount of venture investment since 2001," noted Kramer. "The total amount invested by venture capitalists in the U.S. in 2007 was $29.9 billion, up approximately 8% over 2006."

Complete survey results are posted on Fenwick & West's website at

About the Survey

The Fenwick & West Quarterly Venture Capital Survey, launched by law firm partners Barry J. Kramer and Michael J. Patrick in 2002, offers a unique view of the venture capital market in the Silicon Valley/San Francisco Bay Area by providing insight into the changes in venture capital valuations and terms. Focusing exclusively on trends in venture financing and valuations, the Fenwick & West Survey complements the economic data presented in the Dow Jones VentureSource Survey and the MoneyTree™ Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.

About Fenwick & West

Established in 1972, Fenwick & West LLP is one of the nation's premier law firms with extensive expertise in venture capital, public offerings and other corporate finance, joint ventures, M&A and strategic relationships, intellectual property, litigation and dispute resolution, taxation, antitrust and employment and labor law.


Barry J. Kramer
Fenwick & West LLP
Phone: 650.335.7278

Michael J. Patrick
Fenwick & West LLP
Phone: 650.335.7273

Richard Wood
Sand Hill Partners (for Fenwick & West LLP)
Phone: 650.631.0123